U.S. International Trade Commission

Address all communications to

Secretary to the Commission

United States International Trade Commission

Washington, DC 20436

COMMISSIONERS

Jennifer A. Hillman

Deanna Tanner Okun

Robert A. Rogowsky

Director of Operations

Robert B. Koopman

Director of Economics

Charlotte R. Lane

Daniel R. Pearson, Chairman

Stephen Koplan

Shara L. Aranoff, Vice Chairman
U.S. International Trade Commission

Washington, DC 20436

Publication 3875 August 2006

www.usitc.gov

The Year in Trade 2005

Operation of the Trade Agreements Program

57th Report
This report was principally prepared by:

Country and Regional Analysis Division

James Stamps, Project Leader

Alexander Hammer, Deputy Project Leader

Nannette Christ, Justino De La Cruz, William Greene, Joanne Guth, Magdolna Kornis,

Selamawit Legesse, Walker Pollard, Zhi Wang, and Edward C. Wilson

Office of the General Counsel

William Gearhart and Robin Turner

Office of Tariff Affairs and Trade Agreements

David Beck, Naomi Freeman, Donnette Rimmer, and Dan Shepherdson

Office of Investigations

Barbara Bryan and Mary Messer

Office of Unfair Import Investigations

Jeffrey Whieldon

Office of Industries

Kimberlie Freund, Brad Gehrke, Jackie W. Jones, and Laurie Koran

Office of Information Technology Services

Barbara V. Bobbitt

Supporting assistance was provided by:

Cecelia N. Allen
iii

PREFACE

This report is the 57th in a series of annual reports submitted to the U.S. Congress under

section 163(c) of the Trade Act of 1974 (19 U.S.C. 2213(c) and its predecessor legislation.

Section 163(c) of the Trade Act of 1974 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.”

This report is one of the principal means by which the U.S. International Trade Commission

provides Congress with factual information on trade policy and its administration for

calendar year 2005. 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.

v

ABSTRACT

This annual report to Congress provides factual information on U.S. trade policy and its

administration for calendar year 2005. Chapter 1 provides an overview of the U.S. economy

in 2005 and describes major trends in U.S. trade during the year. Chapter 2 summarizes

activities relating to the administration of U.S. trade laws and regulations, including import

relief laws, laws against unfair trade practices, and other import administration laws and

programs. Chapter 3 focuses on the activities of the World Trade Organization, the

Organization for Economic Cooperation and Development, and the Asia-Pacific Economic

Cooperation forum. Chapter 4 provides an overview of activities with respect to U.S. free

trade agreements (FTAs) and FTA negotiations during 2005. Chapter 5 addresses selected

trade-related activities between the United States and selected major trading partners—the

European Union, Canada, China, Mexico, Japan, Taiwan, Korea, India, and Russia.

vii

TABLE OF CONTENTS

Page

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Abstract ........................................................................ v

Abbreviations and Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv

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

Scope and approach of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1

Overview of the U.S. economy in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1

Exchange rate trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3

Balance of payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-4

U.S. trade in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-5

U.S. merchandise trade by product category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-5

Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-6

Imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-7

U.S. merchandise trade with leading partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-8

Chapter 2. Administration of U.S. Trade Laws and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . 2-1

Import relief laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1

Safeguard actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1

Adjustment assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-2

Trade adjustment assistance for workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-2

Trade adjustment assistance for farmers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-4

Trade adjustment assistance for firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-4

Laws against unfair trade practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5

Section 301 investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5

Active cases in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5

Special 301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-7

Antidumping investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-9

Countervailing duty investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-10

Reviews of outstanding antidumping and countervailing duty orders/suspension

agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-11

Section 337 investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-11

Other import administration laws and programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-13

U.S. preferential trade programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-13

Generalized System of Preferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-13

African Growth and Opportunity Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-15

Andean Trade Preference Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-17

Caribbean Basin Economic Recovery Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-19

Textile and apparel imports under AGOA, ATPDEA, and CBTPA . . . . . . . . . . . . . . . . . 2-20
viii

TABLE OF CONTENTS–Continued

Page

Chapter 2. Administration of U.S. Trade Laws and Regulations–Continued

Textile and apparel developments in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-21

U.S. textile and apparel imports in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-21

U.S.-China textile agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-24

Qualifying industrial zones program for Israel, Egypt, and Jordan . . . . . . . . . . . . . . . . . . 2-26

Chapter 3. Selected Trade Developments in the WTO, OECD, and APEC . . . . . . . . . . . . . . . . . 3-1

World Trade Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1

Doha trade negotiations and 2005 Hong Kong ministerial . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1

2005 “first approximation” efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-2

WTO sixth ministerial conference at Hong Kong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-2

Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-3

Nonagricultural market access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-5

Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-6

Trade rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-7

Intellectual property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-8

Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-8

Trade facilitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-9

Dispute settlement negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-9

Special and differential treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-9

Regular activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-11

Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-11

Dispute settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-11

Organization for Economic Cooperation and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-14

Trade committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-14

Antibribery convention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-15

Steel subsidy negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-16

Counterfeiting and piracy project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-17

Asia-Pacific Economic Cooperation (APEC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-17

The mid-term stocktake . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-18

The Busan roadmap to Bogor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-19

Anti-counterfeiting and piracy initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-19

Chapter 4. U.S. Free Trade Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1

FTAs in force during 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1

FTA negotiations during 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1

U.S.-Oman Free Trade Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-3

U.S.-Peru Trade Promotion Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-4

U.S.-Colombia Trade Promotion Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-5

Textile and Apparel provisions of agreements with Oman, Peru, and Colombia . . . . . . . . . . 4-6

U.S.-Oman FTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-6

U.S.-Peru TPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-7

U.S.-Colombia TPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-7

Free Trade Area of the Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-8
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TABLE OF CONTENTS–Continued

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Chapter 4. U.S. Free Trade Agreements–Continued

North American Free Trade Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-9

Free Trade Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-9

Commission for Labor Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-11

Commission for Environmental Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-12

Dispute settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-14

Chapter 11 dispute settlement developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-15

Chapter 19 dispute panel reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-15

Chapter 5. U.S. Relations with Major Trading Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-1

European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-1

Aircraft sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-2

Foreign sales corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-4

Canada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-5

Softwood lumber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-6

WTO antidumping determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-6

WTO countervailing duty determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-7

WTO threat of material injury determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8

NAFTA antidumping determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-9

NAFTA countervailing duty determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-10

NAFTA threat of material injury determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-11

Grains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-12

WTO dispute over Canadian Wheat Board and treatment of imported grain . . . . . . . . . . 5-12

Canadian complaint regarding imports of unprocessed U.S. grain corn . . . . . . . . . . . . . . 5-12

NAFTA panel review of U.S. determinations concerning hard red spring wheat . . . . . . . 5-13

China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-14

U.S. assessment of China’s WTO compliance in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-14

Intellectual property rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-14

Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-16

Trading rights and distribution services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-17

Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-17

Industrial policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-18

Transparency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-18

Global trade imbalances and China’s exchange rate regime . . . . . . . . . . . . . . . . . . . . . . . . . . 5-19

Mexico. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-20

Mexican antidumping duties on U.S. long-grain white rice . . . . . . . . . . . . . . . . . . . . . . . . . . 5-20

U.S. antidumping duties on Mexican cement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-21

Mexican taxes on certain beverages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-22

Japan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-23

Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-24

Liberalization of Japanese import restrictions on U.S. beef . . . . . . . . . . . . . . . . . . . . . . . . 5-24

Liberalization of U.S. import restrictions on Japanese beef . . . . . . . . . . . . . . . . . . . . . . . . 5-25

Deregulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-25
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TABLE OF CONTENTS–Continued

Page

Chapter 5. U.S. Relations with Major Trading Partners—Continued

Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-26

Intellectual property rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-27

Agriculture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-27

Beef. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-28

Rice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-28

Pharmaceuticals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-29

Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-29

Intellectual property rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-30

Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-31

U.S.-Korea FTA negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-31

India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-32

Trade dialogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-32

Intellectual property rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-32

Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-33

Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-33

Poultry, pork, and beef import restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-34

Intellectual property rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-35

Figures

1-1. U.S. merchandise trade with the world, 2003–05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-6

1-2. Leading U.S. export markets, by share, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-8

1-3. Leading U.S. import sources, by share, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-9

Tables

1-1. Summary of U.S. trade agreement activities, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-2

1-2. U.S. trade with major trading partners and with the world, 2005 . . . . . . . . . . . . . . . . . . . . . . . 1-8

2-1. Petitions certified and denied under the trade adjustment assistance program and

estimated number of workers affected, FY 2004 and FY 2005 . . . . . . . . . . . . . . . . . . . . . . 2-3

2-2. Benefits and services provided under the trade adjustment assistance program, FY 2004 and

FY 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3

2-3. Results of petitions filed under the trade adjustment assistance program for farmers, 

FY 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-4

2-4. Active section 301 cases in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-6

2-5. Antidumping duty orders that became effective during 2005 . . . . . . . . . . . . . . . . . . . . . . . . . 2-10

2-6. U.S. imports for consumption from GSP beneficiaries and the world, 2005 . . . . . . . . . . . . . . 2-15

2-7. U.S. imports for consumption from AGOA countries, 2003–05 . . . . . . . . . . . . . . . . . . . . . . . 2-17

2-8. U.S. imports for consumption from ATPA countries, 2003–05 . . . . . . . . . . . . . . . . . . . . . . . . 2-18

2-9. U.S. imports for consumption from CBERA countries, 2003–05 . . . . . . . . . . . . . . . . . . . . . . 2-19

2-10. U.S. imports of textiles and apparel in 2005 by quantity, percentage change in imports

2004–05, and share of total U.S. imports of textiles and apparel, for major U.S.

suppliers, selected regional groups, and the world . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-22

2-11. U.S. imports of selected apparel products, by quota and safeguard levels, 2004-05 . . . . . . . . 2-25

3-1. Hong Kong ministerial declaration, contents and annexes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-4
xi

TABLE OF CONTENTS–Continued

Page

Tables–Continued

3-2. WTO membership in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-12

3-3. WTO observers in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-13

3-4. WTO dispute-settlement cases initiated in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-13

4-1. U.S. merchandise trade with FTA partners, 2003–05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-2

4-2. Status of U.S. FTA negotiations during 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-3

4-3. U.S. merchandise trade with NAFTA partners, 2003–05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-10

4-4. Active files through 2005, under article 14 of the North American Agreement on 

Environmental Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-13

4-5. Citizen submissions on enforcement under article 15 of the North American Agreement 

on Environmental Cooperation, submissions active during 2005 . . . . . . . . . . . . . . . . . . . . 4-13

4-6. NAFTA chapter 19 binational panels, active reviews in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . 4-16

Appendix tables

A-1. U.S. merchandise trade with world, by SITC codes (revision 3), 2003–05 . . . . . . . . . . . . . . . A-3

A-2. Leading exports to the world, by Schedule B subheading, 2003–05 . . . . . . . . . . . . . . . . . . . . A-4

A-3. Leading U.S. imports from the world, by HTS subheading, 2003–05 . . . . . . . . . . . . . . . . . . . A-5

A-4. Antidumping cases active in 2005, by USITC investigation number . . . . . . . . . . . . . . . . . . . . A-6

A-5. Antidumping duty orders in effect as of December 31, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . A-7

A-6. Countervailing duty cases active in 2005, by USITC investigation number . . . . . . . . . . . . . . A-13

A-7. Countervailing duty orders in effect as of December 31, 2005 . . . . . . . . . . . . . . . . . . . . . . . . A-14

A-8 Changed circumstances investigations completed in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-16

A-9. Reviews of existing antidumping and countervailing duty orders and suspension agreements 

completed in 2005, by date of completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-17

A-10. Section 337 investigations and related proceedings completed by the U.S. International

Trade Commission during 2005 and those pending on December 31, 2005 . . . . . . . . . . . . A-19

A-11. Outstanding Section 337 exclusion orders as of December 31, 2005 . . . . . . . . . . . . . . . . . . . A-23

A-12. U.S. imports for consumption of leading GSP duty-free imports, 2005 . . . . . . . . . . . . . . . . . A-27

A-13. U.S. imports for consumption and imports eligible for GSP treatment, by import categories

under the Harmonized Tariff Schedule, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28

A-14. U.S. imports for consumption under AGOA provisions, by source, 2003–05 . . . . . . . . . . . . . A-29

A-15. U.S. imports for consumption of leading imports under AGOA, 2003–05 . . . . . . . . . . . . . . . A-30

A-16. U.S. imports for consumption under ATPA provisions, by source, 2003–05 . . . . . . . . . . . . . A-31

A-17. U.S. imports for consumption of leading imports under ATPA, 2003–05 . . . . . . . . . . . . . . . . A-32

A-18. U.S. imports for consumption under CBERA provisions, by source, 2003–05 . . . . . . . . . . . . A-33

A-19. U.S. imports for consumption of leading imports under CBERA, 2003–05 . . . . . . . . . . . . . . A-34

A-20. WTO dispute-settlement cases to which the United States was a party, developments

in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-35

A-21. NAFTA dispute settlement cases to which the United States was a party, developments

in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-37

A-22. U.S. merchandise trade with European Union, by SITC codes (revision 3), 2003–05 . . . . . . A-39

A-23. Leading U.S. exports to the European Union, by Schedule B subheading, 2003–05 . . . . . . . . A-40

A-24. Leading U.S. imports from the European Union, by HTS subheading, 2003–05 . . . . . . . . . . A-41

A-25. U.S. merchandise trade with Canada, by SITC codes (revision 3), 2003–05 . . . . . . . . . . . . . . A-42
xii

TABLE OF CONTENTS–Continued

Page

Appendix tables–Continued

A-26. Leading U.S. exports to Canada, by Schedule B subheading, 2003–05 . . . . . . . . . . . . . . . . . . A-43

A-27. Leading imports from Canada, by HTS subheading, 2003–05 . . . . . . . . . . . . . . . . . . . . . . . . . A-44

A-28. U.S. merchandise trade with China, by SITC codes (revision 3), 2003–05 . . . . . . . . . . . . . . . A-45

A-29. Leading U.S. exports to China, by Schedule B subheading, 2003–05 . . . . . . . . . . . . . . . . . . . A-46

A-30. Leading U.S. imports from China, by HTS subheading, 2003–05 . . . . . . . . . . . . . . . . . . . . . . A-47

A-31. U.S. merchandise trade with Mexico, by SITC codes (revision 3), 2003–05 . . . . . . . . . . . . . A-48

A-32. Leading U.S. exports to Mexico, by Schedule B subheading, 2003–05 . . . . . . . . . . . . . . . . . A-49

A-33. Leading U.S. imports from Mexico, by HTS subheading, 2003–05 . . . . . . . . . . . . . . . . . . . . A-50

A-34. U.S. merchandise trade with Japan, by SITC codes (revision 3), 2003–05 . . . . . . . . . . . . . . . A-51

A-35. Leading U.S. exports to Japan, by Schedule B subheading, 2003–05 . . . . . . . . . . . . . . . . . . . A-52

A-36. Leading U.S. imports from Japan, by HTS subheading, 2003–05 . . . . . . . . . . . . . . . . . . . . . . A-53

A-37. U.S. merchandise trade with Taiwan, by SITC codes (revision 3), 2003–05 . . . . . . . . . . . . . . A-54

A-38. Leading U.S. exports to Taiwan, by Schedule B subheading, 2003–05 . . . . . . . . . . . . . . . . . . A-55

A-39. Leading U.S. imports from Taiwan, by HTS subheading, 2003–05 . . . . . . . . . . . . . . . . . . . . A-56

A-40. U.S. merchandise trade with Korea, by SITC codes (revision 3), 2003–05 . . . . . . . . . . . . . . . A-57

A-41. Leading U.S. exports to Korea, by Schedule B subheading, 2003–05 . . . . . . . . . . . . . . . . . . . A-58

A-42. Leading U.S. imports from Korea, by HTS subheading, 2003–05 . . . . . . . . . . . . . . . . . . . . . . A-59

A-43. U.S. merchandise trade with India, by SITC codes (revision 3), 2003–05 . . . . . . . . . . . . . . . A-60

A-44. Leading U.S. exports to India, by Schedule B subheading, 2003–05 . . . . . . . . . . . . . . . . . . . A-61

A-45. Leading U.S. imports from India, by HTS subheading, 2003–05 . . . . . . . . . . . . . . . . . . . . . . A-62

A-46. U.S. merchandise trade with Russia, by SITC codes (revision 3), 2003–05 . . . . . . . . . . . . . . A-63

A-47. Leading U.S. exports to Russia, by Schedule B subheading, 2003–05 . . . . . . . . . . . . . . . . . . A-64

A-48. Leading U.S. imports from Russia, by HTS subheading, 2003–05 . . . . . . . . . . . . . . . . . . . . . A-65
xiii

List of Frequently Used Abbreviations and

Acronyms

AD Antidumping

AGOA African Growth and Opportunity Act

APEC Asia-Pacific Economic Cooperation

ATPA Andean Trade Preference Act

ATPDEA Andean Trade Promotion and Drug Eradication Act 

BSE Bovine Spongiform Encephalopathy

CBERA Caribbean Basin Economic Recovery Act

CBTPA Caribbean Basin Trade Partnership Act

CVD Countervailing Duty

DDA Doha Development Agenda

DSB WTO Dispute Settlement Body

DSU WTO Dispute Settlement Understanding

EU European Union

FAS Foreign Agricultural Service, U.S. Department of Agriculture

FSC Foreign Sales Corporation

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

HFCS High Fructose Corn Syrup

HTS Harmonized Tariff Schedule of the United States

IMF International Monetary Fund

IPR Intellectual Property Rights

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

LTFV Less Than Fair Value

NAFTA North American Free Trade Agreement

NTR Normal Trade Relations

OECD Organization for Economic Cooperation and Development

SITC Standard Industrial Trade Classification

SSA Sub-Saharan Africa

TAA Trade Adjustment Assistance

TPA Trade Promotion Agreement

TPL Tariff Preference Level

TRIPs Trade-Related Aspects of Intellectual Property Rights 

TRQ Tariff Rate Quota

USITC United States International Trade Commission

USTR United States Trade Representative

WTO World Trade Organization

xv

EXECUTIVE SUMMARY

U.S. trade agreements activities during 2005 included the administration of U.S. trade laws

and regulations; U.S. participation in the World Trade Organization (WTO), the

Organization for Economic Cooperation and Development (OECD), and the Asia-Pacific

Economic Cooperation (APEC) forum; U.S. negotiation of and participation in free trade

agreements (FTAs); and bilateral developments with major trading partners. Highlights of

key U.S. trade agreements activities in 2005, including some that are described in more detail

in this report, are presented in table 1-1. A summary of the major information contained in

each chapter of the report follows.

Administration of U.S. Trade Laws and Regulations

The following lists the principal developments in U.S. trade programs that occurred during

2005:

• The U.S. International Trade Commission (USITC) conducted two investigations

under safeguard provisions during 2005. One investigation was under the China

safeguard provision in section 421 of the Trade Act of 1974 and concerned imports

of circular welded non-alloy steel pipe. The USITC found that increased imports of

the subject product from China were causing market disruption in the United States

and recommended import relief to the President; however, the President determined

that import relief was not in the nation’s economic interest and, therefore, did not

provide relief. The second investigation was under section 204(d) of the Trade Act

of 1974 with respect to the effectiveness of recently terminated global safeguard

measures on steel imports. In that investigation, USITC reported to the President and

the Congress on the effectiveness of the recently terminated global safeguard

measures on imports of certain steel products in facilitating positive adjustment to

import competition by domestic steel industries. No safeguard petitions were

pending before the USITC at the end of 2005.

• The U.S. Department of Labor received a total of 2,635 petitions for trade

adjustment assistance (TAA) for workers in FY 2005, a decrease from 2,991 cases

in FY 2004. There were 117,360 workers certified for TAA benefits and services in

FY 2005, a decrease from 149,300 workers certified in FY 2004. The U.S.

Department of Agriculture received a total of 29 petitions for TAA for farmers

(including ranchers, fish farmers, and fishermen) in FY 2005, and certified 14

petitions as eligible for benefits and assistance covering 3,686 farmers during the

year. The Economic Development Administration of the U.S. Department of

Commerce certified 171 petitions as eligible for TAA for firms in FY 2005, and

approved 132 trade adjustment projects during the year.

• Two active cases under section 301 were administered by the United States Trade

Representative (USTR). One concerned the European Union (EU) meat hormone

directive and the second concerned intellectual property rights (IPR) protection in

Ukraine. In the separate “special 301” review, USTR devoted special attention to the

need for significantly improved enforcement against piracy and counterfeiting. In

its review, USTR identified 52 countries that failed to provide adequate and

effective IPR protection. USTR reported that the level of infringement remained
xvi

very high despite efforts to improve IPR protection in China, and consequently

elevated China to the priority watch list.

• The Commission instituted 12 new antidumping investigations during 2005 and

completed 29 investigations. Antidumping duties were imposed on products from

13 countries as a result of affirmative determinations in 17 of the completed

investigations.

• The Commission instituted two new countervailing duty investigations during 2005

and completed three investigations. No countervailing duties were imposed in those

completed investigations.

• The Commission’s section 337 caseload continued to be dominated by

investigations involving complex technologies, particularly in the computer and

telecommunications fields. During 2005, there were 58 active section 337

investigations and ancillary proceedings, 32 of which were instituted in 2005. The

Commission completed a total of 31 investigations and ancillary proceedings under

section 337 in 2005, including two enforcement proceedings and one combined

enforcement and advisory opinion proceeding. Ten exclusion orders and 12 ceaseand-desist orders were issued during 2005.

Preferential Trade Programs

The U.S. Generalized System of Preferences (GSP) program affords duty-free access to the

U.S. market for certain products that are imported into the United States from designated

developing countries and areas. The program also affords duty-free treatment for certain

products when imported only from countries designated as least-developed beneficiary

developing countries (LDBDCs). The GSP program is currently authorized through

December 31, 2006. Serbia and Montenegro were added to the list of designated GSP

beneficiaries during 2005. On December 29, 2005, USTR initiated a review to consider the

designation of Liberia as an LDBDC. India was the leading supplier under GSP in 2005,

followed by Angola, Brazil, Thailand, and Indonesia. Total U.S. duty-free imports under

GSP totaled $26.7 billion in 2005.

The African Growth and Opportunity Act (AGOA) provides unilateral preferential trade

benefits to eligible sub-Saharan African (SSA) countries pursuing political and economic

reforms. AGOA expands GSP benefits by providing duty-free access to the U.S. market to

more than 1,800 additional qualifying tariff line-item products from eligible SSA countries,

and exempts beneficiaries from GSP competitive-need limits. AGOA also provides duty-free

treatment for eligible apparel articles made in qualifying SSA countries. The AGOA program

is currently authorized through 2015. A total of 37 SSA countries were designated for

benefits under AGOA as of January 1, 2005, and 24 SSA countries were eligible for AGOA

textile and apparel benefits. U.S. duty-free imports under AGOA, including GSP, were

valued at $38.1 billion in 2005. U.S. duty-free imports under AGOA, excluding GSP, were

valued at $32.7 billion in 2005.

The Andean Trade Preference Act (ATPA), as amended by the Andean Trade Promotion and

Drug Eradication Act, provides duty-free access to the U.S. market for eligible imports from

Bolivia, Colombia, Ecuador, and Peru. The program was enacted to promote broad-based

economic development and viable economic alternatives to coca cultivation and cocaine
xvii

production. ATPA is currently authorized through December 31, 2006. U.S. imports under

ATPA preferences in 2005 were valued at $11.5 billion.

In 2005, articles from 24 countries and territories in the Caribbean Basin and Central

America entered the United States free of duty or at reduced duties under the Caribbean

Basin Economic Recovery Act (CBERA) and the expanded provisions of preferential tariff

treatment afforded under the Caribbean Basin Trade Partnership Act (CBTPA). CBERA was

enacted to promote export-led economic growth and economic diversification in the

Caribbean Basin region. CBTPA extended North American Free Trade Agreement

(NAFTA)-equivalent treatment to many products previously excluded from CBERA. U.S.

imports under CBERA preferences totaled $12.3 billion in 2005.

Textile and Apparel Developments

The United States eliminated quotas on textile and apparel imports from 39 WTO countries

effective January 1, 2005, as required under the WTO Agreement on Textiles and Clothing.

The United States continued to maintain quotas on imports from three non-WTO

nations—Belarus, Ukraine, and Vietnam. Shipments from China increased significantly

during 2005 as a result of quota elimination, with U.S. textile and apparel imports from

China rising by 43.8 percent from 2004 to approximately $22.4 billion in 2005. Shipments

also increased from India, Pakistan, and Bangladesh—all low-cost suppliers also previously

constrained by quotas—but grew from a much smaller base.

Between May and August 2005, the United States took 10 safeguard actions against certain

apparel imports from China pursuant to the textile safeguard provision in China’s WTO

accession agreement. On November 8, 2005, the United States and China signed a

memorandum of understanding that established quotas on U.S. imports of selected textile

and apparel products from China beginning on January 1, 2006, and extending through

December 2008.

Selected Trade Developments in the WTO, OECD, and APEC

during 2005

The WTO Doha Round multilateral trade negotiations focused on setting specific terms and

structures for individual negotiating groups in advance of the WTO Sixth Ministerial

Conference that was held in Hong Kong, China, in December 2005. According to the WTO,

11 dispute-settlement cases were brought during 2005. The United States was a complainant

in one case (concerning measures by Turkey affecting rice imports) and was a respondent

in two cases. The United States held consultations in two dispute-settlement cases. In

January 2005, Mexico requested consultations, the initial stage of WTO dispute settlement,

with the United States over U.S. antidumping determinations regarding stainless steel. In

November 2005, Ecuador requested consultations with the United States over a U.S.

antidumping determination regarding shrimp.

The OECD Trade Committee met twice during 2005. Members discussed a number of topics,

many directed at supporting the WTO Doha Round multilateral trade negotiations. Topics

discussed included competition policy; trade and the environment; trade facilitation;
1

 The agreement entered into force for El Salvador on Mar. 1, 2006, and it entered into force for

Honduras and Nicaragua on Apr. 1, 2006. 2

 The United States launched bilateral FTA negotiations with Korea and Malaysia on Feb. 2, 2006 and

Mar. 8, 2006, respectively. 3

 The 25 members of the EU are: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia,

Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands,

Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.

xviii

agricultural trade; measures against bribery of public officials; export credits; trade in

services; regulatory reform; IPR protection in developing countries; and steel sector

negotiations.

At the November 2005 annual APEC ministerial meeting in Busan, the Republic of Korea

(Korea), member countries completed their mid-term review of the progress made with

respect to efforts to establish a free and open trade and investment area in the Asia-Pacific

region; drafted a framework for implementing the outstanding reform initiatives identified

in the mid-term review; and adopted the Anti-Counterfeiting and Piracy Initiative. The

APEC leaders also issued a separate statement calling for a successful conclusion to the

WTO’s 2005 Doha Development Agenda.

U.S. Free Trade Agreements

The United States was a party to six FTAs in effect as of December 31, 2005—the U.S.-

Australia FTA, which entered into force on January 1, 2005; the U.S.-Chile FTA (2004); the

U.S.-Singapore FTA (2004); the U.S.-Jordan FTA (2001); NAFTA (1994); and the U.S.-

Israel FTA (1985). The U.S.-Morocco FTA entered into force on January 1, 2006.

The United States launched bilateral FTA negotiations with Oman and the United Arab

Emirates (UAE) during 2005. The United States concluded FTA negotiations with Oman and

trade promotion agreements (TPAs) with Peru during 2005, and with Colombia in early

2006. The United States signed a multiparty FTA with Central America (Costa Rica, El

Salvador, Guatemala, Honduras, and Nicaragua) and the Dominican Republic in 2004; the

United States and El Salvador implemented the FTA first, on March 1, 2005.1

 At year-end

2005, the United States was engaged in bilateral trade negotiations with Colombia, Ecuador,

Panama, Thailand, and the UAE.2

 Multilateral negotiations begun in 1998 for the Free Trade

Area of the Americas agreement among the countries of the Western Hemisphere remained

stalled in 2005.

U.S. Relations With Major Trading Partners

European Union

The EU3 is the second largest two-way (exports plus imports) U.S. trading partner behind

the combined NAFTA market of Canada and Mexico. Major U.S.-EU trade-related

developments during 2005 included efforts by the United States and the EU to reach an

agreement on terms to negotiate a new agreement addressing aircraft sector subsidies, and

an EU challenge at the WTO to recently enacted U.S. legislation concerning tax treatment

of foreign sales corporations.
xix

Canada

Canada is the largest single U.S. trading partner. U.S.-Canada trade relations are governed

in large part by NAFTA and underlying WTO obligations. Major U.S.-Canada trade-related

issues in 2005 included a number of trade disputes that were the subject of several WTO and

NAFTA dispute settlement proceedings. Several cases related to U.S. countervailing duty

and antidumping duty orders on imports of Canadian softwood lumber, and U.S. and

Canadian measures affecting trade in grain products.

China

China ranked as the second largest single U.S. trading partner in 2005 (based on two-way

trade), trailing Canada and surpassing Mexico for the first time. China’s compliance with its

WTO commitments remained a major focus of U.S.-China trade relations in 2005. Notable

areas of U.S. concern were China’s policies on IPR enforcement, agriculture, trading rights,

services, industrial policy, and legal transparency. Also during 2005, U.S. and Chinese

officials held bilateral discussions to address global trade imbalances and China’s exchange

rate policy.

Mexico

In 2005, Mexico was the third largest U.S. trading partner (based on two-way trade) after

Canada and China. U.S.-Mexico trade relations are governed in large part by NAFTA and

underlying WTO obligations. Major U.S.-Mexico trade-related developments during 2005

included a number of trade disputes that were the subject of WTO and NAFTA dispute

settlement proceedings, including Mexican antidumping duties on U.S. long-grain white rice,

U.S. antidumping duties on Mexican cement, and Mexican taxes on beverages that contain

high-fructose corn syrup.

Japan

The United States and Japan continued bilateral discussions under the U.S.-Japan Economic

Partnership for Growth, which serves as the primary forum for trade and economic dialogue

between the two countries. In 2005, discussions under this framework focused on reopening

the beef markets of both countries to bilateral trade, as well as on deregulation within Japan’s

economy.

Taiwan

U.S. trade relations with Taiwan during 2005 continued to focus on improving IPR

protection in Taiwan, enhancing market access for U.S. rice and beef, and addressing

concerns raised by the U.S. pharmaceutical industry regarding Taiwan’s reimbursement

policies on domestic pharmaceutical products.

Korea

The United States and Korea continue to meet regularly to discuss bilateral trade issues.

Topics of discussions during 2005 included IPR protection in Korea, the resumption of

market access for U.S. beef in Korea, and plans to begin negotiations for a U.S.-Korea FTA.
xx

India

The United States and India continued work to improve their long-term bilateral trade

relationship in 2005 through the establishment of the United States-India Trade Policy

Forum. Discussions under the forum focused on IPR protection in India, bilateral market

access for agricultural products, and U.S. concerns about market access for services in India.

Russia

The United States accords Russia conditional normal trade relations (NTR) tariff treatment

based on a 1992 bilateral trade agreement. Congress considered legislation to grant Russia

permanent NTR status in recent years, but such legislation was not introduced in 2005.

Major bilateral trade-related concerns for the United States during 2005 included market

access for U.S. poultry, pork, and beef, and IPR protection.
1

 This is the 57th in a series of annual reports submitted to the U.S. Congress under section 163(c) of

the Trade Act of 1974 (19 U.S.C. 2213(c)) and its predecessor legislation. 2

 U.S. Department of Commerce, Bureau of Economic Analysis, Gross Domestic Product: Fourth

Quarter 2005 (Final), news release, BEA-06-11. 3

 Ibid.

4

 Includes 30 countries: Austria, Australia, Belgium, Canada, Czech Republic, Denmark, Finland,

France, Germany, Greece, Hungary, Iceland, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New

Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom,

and the United States. OECD, Main Economic Indicators, March 2006, p. 287. 5

 Includes Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the

Netherlands, Portugal, and Spain. OECD, Main Economic Indicators, March 2006, p. 287.

CHAPTER 1

Introduction

Scope and Approach of the Report

This report provides factual information on U.S. trade policy and its administration for

calendar year 2005.1

 The report is based on primary source materials on U.S. trade policies

and administrative matters, including U.S. Government Federal Register notices,

publications and press releases by the U.S. International Trade Commission (USITC or the

Commission) and other U.S. Government agencies, and U.S. Department of State telegrams.

Other primary sources of information include publications of international institutions

including the World Trade Organization (WTO), the International Monetary Fund (IMF),

the Organization for Economic Cooperation and Development (OECD), and official

publications of foreign governments. Newspaper articles, professional journals, and trade

publications are used to provide supplemental factual information when primary source

information is unavailable. Statistical information consists of trade and economic data

compiled by the Commission primarily from the U.S. Census Bureau as well as the United

Nations and the IMF.

Table 1-1 summarizes U.S. trade agreement activities and significant international trade

developments in 2005.

Overview of the U.S. Economy in 2005

The United States continued its fourth year of economic expansion in 2005. Real U.S. gross

domestic product (GDP) grew by 3.5 percent in 2005, compared with 4.2 percent growth in

2004.2

 Consumer spending, business investment in equipment and software, and exports

remained leading components of U.S. GDP growth in 2005, although growth slowed during

the fourth quarter of the year in response to reduced consumer spending, lower exports, and

increased imports.3

The U.S. economy recorded higher growth than that of most other industrialized countries

and areas during 2005, including Canada (2.9 percent), Mexico (3.0 percent), the OECD

(average 2.7 percent),4

 and the euro area (average 1.3 percent).5 However, U.S. economic

growth in 2005 was below the world average GDP growth rate of 4.8 percent, and
1-2

Table 1–1 Summary of U.S. trade agreement activities, 2005 

Date Event 

January 

1 The United States ends textile and apparel import quotas under the WTO Agreement on Textiles and Clothing

for goods entering on and after January 1, 2005, terminating textile quota and visa arrangements for trading

partners that are WTO members and that have such country-of-origin arrangements with the United States.

Textile visa and quota requirements continue for non-WTO trading partners.

1 The United States implements the American Jobs Creation Act of 2004 (Jobs Act) to comply with a WTO ruling

on the U.S. foreign sales corporation/extraterritorial income tax regime. Following this, the European Union (EU)

lifts sanctions on selected U.S. products.

1 The U.S.-Australia FTA enters into force.

17 The United States and Vietnam sign a textile agreement that increases the cap on U.S. textile imports from

Vietnam to approximately $1.7 billion per year.

February 

17 The WTO establishes a dispute-settlement panel to examine the EU contention that U.S. retaliatory measures

are no longer warranted, once offending EU measures banning growth-promoting hormones in meat imports

were removed in response to being ruled inconsistent with WTO rules.

March

12 The United States begins bilateral FTA negotiations with Oman and with the United Arab Emirates (UAE).

15 A WTO dispute-settlement panel finds the EU’s regulation on trademark protection and geographical indications

for agricultural products and foodstuffs to be inconsistent with WTO rules. 

15 The United States and the UAE sign a trade and investment framework agreement. 

19 The United States and Qatar sign a trade and investment framework agreement. 

23 The United States and Colombia begin FTA negotiations. 

26 The United States and Panama begin FTA negotiations. 

April

16 Taiwan lifts its ban on imports of U.S. beef and beef products that was imposed in December 2003.

20 USTR receives a petition requesting that it initiate an investigation with respect to China’s currency valuation

policy of maintaining a fixed exchange rate vis-à-vis the U.S. dollar.

May

27 USTR determines not to initiate an investigation with respect to China’s currency valuation policy.

29 USTR places China on the “priority watch list” of countries with IPR-related problems, following its “special 301"

out-of-cycle review of China’s IPR practices.

June

15 The United States and Russia sign an agreement providing increased access for U.S. poultry, beef, and pork

in the Russian market. 

21 The United States and Mozambique sign a trade and investment framework agreement. 

24 The U.S. Department of Agriculture announces that a cow in the United States that had conflicting BSE test

results in 2004 was confirmed as BSE positive.

25 Taiwan reimposes restrictions on imports of U.S. beef and beef products.

July

1 President Bush launches the African Global Competitiveness Initiative to promote foreign trade by entrepreneurs

in sub-Saharan Africa.

11 The United States and Iraq sign a trade and investment framework agreement.

20 The WTO establishes two dispute-settlement panels to examine aircraft subsidies in the United States and in

the EU.

21 China announces a change in its currency valuation system from a strict peg to the U.S. dollar to a more flexible

peg to a broader basket of currencies.

August

2 President Bush signs legislation implementing the U.S.-Dominican Republic-Central America FTA.

September

9 The United States and Saudi Arabia announce the completion of bilateral market access negotiations on issues

related to Saudi Arabia’s WTO accession.

14 The United States and EU reach an agreement on wine-making practices and labeling standards. 
6

 Unless otherwise indicated, GDP growth data are from IMF, World Economic Outlook, (Washington,

DC: IMF, April 2006), table 1.1, p. 2. 7

 Hurricane Katrina made landfall in Louisiana on Aug. 29, 2005, and Hurricane Rita made landfall

near the Texas-Louisiana border on Sept. 24, 2005. 8

 The spot price of West Texas intermediate crude oil rose from about $43 per barrel in early 2005 to

a peak of about $70 per barrel in late August, at the time of Hurricane Katrina; the spot price declined below $60

per barrel by late November 2005. U.S. Federal Reserve Board, Economic and Financial Developments in 2005

and Early 2006, February 2006. 9

 U.S. Federal Reserve Board, Economic and Financial Developments in 2005 and Early 2006. 10 A weighted average of the foreign exchange values of the U.S. dollar against the currencies of a large

group of major U.S. trading partners. The trade weights, which change over time, are derived from U.S. export

shares and from U.S. and foreign import shares. The trade-weighted dollar represents the foreign currency price

of the U.S. dollar or the export value of the U.S. dollar. When the index increases, the value of the dollar

increases (appreciates), making it easier for Americans to afford imports, but making U.S. exports more

expensive abroad. 11 IMF, World Economic Outlook, April 2006, p. 5. 12 U.S. Federal Reserve Board, Economic and Financial Developments in 2005 and Early 2006.

1-3

Table 1–1 Summary of U.S. trade agreement activities, 2005—Continued

Date Event 

October

3 The United States and Oman complete FTA negotiations. 

7 A WTO dispute-settlement panel rules in favor of U.S. claims against a 20 percent Mexican tax on beverages

that use non-sugar sweeteners.

November

5 At the Fourth Summit of the Americas in Mar del Plata, Argentina, the United States and other countries call

for negotiations for the Free Trade Area of the Americas to resume. Other countries state that the necessary

conditions for an agreement are not yet in place. 

8 The United States and China sign a memorandum of understanding that establishes quotas on U.S. imports

of selected textile and apparel products from China through the year 2008.

12 The inaugural session of the U.S.-India Trade Policy Forum in New Delhi includes discussions on tariff and

nontariff trade barriers, subsidies, and resumption of U.S. imports of mangoes from India.

16 At the Asia-Pacific Economic Cooperation ministerial meeting in Busan, Korea, ministers propose an

implementation plan to reach the 1994 “Bogor Goals” of free and open trade and investment in the region.

30 The United States and the EU reach agreement on EU trade concessions to compensate the United States for

tariff increases resulting from enlargement of the EU to include 10 new member states. 

December

7 The United States and Peru complete negotiations for a trade preference agreement.

11 The United States and Japan reach an agreement to reopen Japan’s market to most U.S. beef and beef

products following two years of bilateral negotiations.

13 Japan lifts a ban on imports of U.S. beef and beef products that it imposed in December 2003.

significantly lower than the estimated 9.9 percent GDP growth recorded by China, one of

the world’s fastest growing economies.6

The U.S. economy proved particularly resilient during 2005 in light of the economic impacts

of Hurricanes Katrina and Rita,7

 which damaged and temporarily disrupted U.S. oil and gas

refineries, pipeline operations, and port activities in Louisiana and eastern Texas in late

summer and early fall.8

 The hurricanes also hampered some U.S. exports late in the year.9

Exchange Rate Trends

The nominal trade-weighted exchange value of the dollar10 appreciated by 2.5 percent during

2005,11 although the index remained below its 2003 and 2004 averages.12 The dollar

appreciated by about 15 percent against the euro and the Japanese yen during 2005, and
13 Ibid.

14 For a more detailed discussion of global imbalances, see IMF, World Economic Outlook, April 2006,

box 1.4, p. 28. See also U.S. Department of the Treasury, “Remarks of Under Secretary of the Treasury Timothy

D. Adams before the U.S.-China Business Council,” Sept. 15, 2005. 15 Those changes included revaluing the yuan (also known as the renminbi) by 2.1 percent versus the

dollar and shifting from a policy of pegging the yuan to the dollar to a policy linking the yuan to a basket of

currencies. IMF, World Economic Outlook, September 2005, p. 34. 16 U.S. Federal Reserve Board, Economic and Financial Developments in 2005 and Early 2006. 17 U.S. Department of Commerce, Bureau of Economic Analysis, “U.S. International Transactions,”

news release, Mar. 14, 2006. 18 Income receipts (including income receipts on U.S.-owned assets abroad and compensation of U.S.

employees broad) less income payments (including income payments on foreign-owned assets in the United

States and compensation of employees). 19 Ibid.

20 Much of the capital account surplus represented net financial inflows (net acquisitions by foreign

residents of assets in the United States less net acquisitions by U.S. residents of assets abroad). U.S. Department

of Commerce, Bureau of Economic Analysis, “U.S. International Transactions,” news release, Mar. 14, 2006.

By definition, a country’s current account and capital account balances must offset one another. The main

components of the capital account are capital transfers, foreign direct investment, portfolio investment, banking

and other flows, statistical discrepancies, and official reserve assets.

1-4

depreciated by about 4 percent against the Canadian dollar and 6 percent against the Mexican

peso.13

Throughout the year, U.S. and foreign policymakers expressed concern about imbalances in

the global economy caused, in part, by insufficient exchange rate flexibility in some Asian

countries that prevents adjustments in global supply and demand.14 On July 21, 2005, China

announced changes to its exchange rate policy to facilitate exchange rate flexibility,15 leading

the dollar to depreciate by about 0.5 percent against the yuan during the second half of the

year.16

Balance of Payments

The U.S. current account deficit—the combined balances on trade in goods and services,

income, and net unilateral current transfers—increased to $804.9 billion in 2005 from $668.1

billion in 2004. As a share of U.S. GDP, the current account deficit rose to 6.4 percent in

2005 from 5.7 percent in 2004.17

The increase in the deficit on goods, from $665.4 billion in 2004 to $781.6 billion in 2005,

accounted for most of the increase in the current account deficit. Other factors contributing

to the increase in the U.S. current account deficit were a decrease in the surplus on income,18

from $30.4 billion in 2004 to $1.6 billion in 2005, and a small increase in net outflows

(payments) for unilateral current transfers from $80.9 billion in 2004 to $82.9 billion in

2005.

In contrast, the services trade surplus increased from $47.8 billion in 2004 to $58.0 billion

in 2005. Services exports increased from $343.9 billion to $379.6 billion over the period,

with the largest increases in “other” private services (such as business, professional, and

technical services, insurance services, and financial services) and in travel. Services imports

increased from $296.1 billion in 2004 to $321.6 billion in 2005, with the largest increases

in “other” private services and in “other” transportation (such as freight and port services).19

The U.S. current account deficit was financed by a capital account surplus valued at $801.0

billion in 2005.20
21 The Census basis data for goods (used elsewhere in this report) are compiled from the documents

collected by the U.S. Customs Service and reflect the movement of goods between foreign countries and the 50

states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and U.S. foreign trade zones. Goods on

a Census basis are adjusted by the U.S. Department of Commerce, Bureau of Economic Analysis (BEA) to goods

on a BOP basis to bring the data in line with the concepts and definitions used to prepare the international and

national accounts. These adjustments are done to supplement coverage of the Census basis data, to eliminate

duplication of transactions recorded elsewhere in the international accounts, and to value transactions according

to a standard definition. For a more detailed discussion of the differences between BOP basis and Census basis

data, see U.S. Department of Commerce, BEA, “Information on Goods and Services.” BOP trade data in this

section of the report may not match data in other sections or in the report appendix because of adjustments made

to the data by the sources cited. 22 U.S. Department of Commerce, U.S. Census Bureau, “U.S. International Trade in Goods and

Services,” news release, January 2005. 23 U.S. Department of Commerce, U.S. Census Bureau, “U.S. International Trade in Goods and

Services,” exhibit 9, January 2006 and January 2005. 24 See the discussion of Census/BOP basis data in footnote 20 above. 25 Merchandise trade data in this section do not match the seasonally adjusted BOP basis data presented

above because of adjustments made to the data described in footnote 20.

1-5

U.S. Trade in 2005

U.S. exports of goods and services, on a seasonally adjusted U.S. balance-of-payments

(BOP) basis,21 were valued at $1,272.2 billion in 2005, and imports of goods and services

were valued at $1,995.8 billion in 2005. The U.S. foreign trade deficit (goods and services)

totaled $723.6 billion in 2005.22 The annual U.S. foreign trade deficit has reached new record

high levels in each year since 2001.

With the United States recording a $58.0 billion surplus on trade in services during 2005,

the widening of the U.S. foreign trade deficit was entirely the result of further expansion of

the deficit on trade in goods. The U.S. goods deficit reached a record high of $781.6 billion

in 2005, compared to $665.4 billion in 2004. Two significant factors contributing to the

increase in the overall 2005 U.S. merchandise trade deficit were (1) the nearly 40 percent rise

in U.S. spending on petroleum imports during the year, causing a $65.3 billion increase in

the U.S. trade deficit on petroleum products as the petroleum products deficit increased from

$163.8 billion in 2004 to $229.1 billion in 2005, and (2) a $46.2 billion increase in the U.S.

bilateral trade deficit with China, further discussed below.23

U.S. Merchandise Trade by Product Category

Figure 1-1 shows U.S. merchandise trade with the world during 2003–05 on a U.S. Census

basis.24 U.S. merchandise exports increased from $651.4 billion in 2003 to $804.0 billion in

2005, and U.S. merchandise imports grew from $1,250.1 billion to $1,662.4 billion during

the same period.25
1-6

Exports

Machinery and transport equipment ranked as the single largest U.S. export category (by

Standard Industrial Trade Classification, or SITC, code) in 2005 (table A-1). U.S. machinery

and transport equipment exports were valued at $367.5 billion in 2005, accounted for 45.7

percent of total U.S. exports in the year, and grew by 9.9 percent from $334.5 billion in

2004. Exports of mineral fuels and lubricants were valued at $26.2 billion in 2005 and grew

by 41.7 percent from $18.5 billion in 2004—the export largest growth of any SITC category

in 2005. Two SITC categories registered annual declines in exports during 2005. U.S.

Figure 1-1 U.S. merchandise trade with the world, 2003-05

-1,000

-500

0

500

1,000

1,500

2,000

2003 2004 2005

Billion dollars

Exports

Imports

Trade balance

Source: U.S. Department of Commerce.
26 U.S. preferential trade programs and imports under those programs are discussed in more detail in

chapter 2 of this report. 27 U.S. textile and apparel imports are discussed in chapter 2 of this report.

1-7

exports of animal/vegetable oils and fats and exports of beverages and tobacco declined in

2005 by 9.6 percent and 7.0 percent, respectively, from 2004.

Imports

U.S. merchandise imports from the world totaled $1,662.4 billion in 2005. All major

categories of U.S. imports increased in 2005 over 2004 (table A-1). Machinery and transport

equipment ranked as the single largest U.S. import category by SITC code in 2005, as in

recent years. U.S. imports of machinery and transport equipment were valued at $649.3

billion in 2005, up 9.3 percent over imports of $594.0 billion in 2004, and accounted for 39.1

percent of total U.S. imports in 2005. Mineral fuels and lubricants ranked as the second

largest U.S. import category by value, with imports valued at $271.2 billion, and the second

largest import category by share, accounting for 16.3 percent of total imports. Imports of

mineral fuels and lubricants increased by 39.1 percent over imports of $194.0 billion in

2004. Petroleum imports rose after Hurricanes Katrina and Rita forced the temporary

shutdowns or reduced operations of U.S. refineries and pipelines and caused a sharp increase

in fuel prices.

U.S. imports under the four preferential trade programs with developing countries combined

were $341.0 billion, accounting for 20.5 percent of total U.S. imports during 2005.26 Duty

free imports entered under the Generalized System of Preferences (GSP) program totaled

$26.7 billion; duty free imports under the African Growth and Opportunity Act (AGOA)

totaled $32.7. billion (excluding GSP imports); duty free imports entered under the Andean

Trade Preference Act totaled $11.5 billion; and imports entered duty free or at reduced duties

under the Caribbean Basin Economic Recovery Act totaled $12.3 billion. U.S. imports under

AGOA reflected the impact of increased U.S. petroleum imports by value during 2005, as

the four leading suppliers of imports under AGOA were oil-exporting countries—Nigeria,

Angola, Gabon, and Chad. Petroleum-related products accounted for more than 94.3 percent

of total AGOA imports by value in 2005, up from 89.3 percent of total AGOA imports in

2004.

With the removal of quotas on imports of textile and apparel products as of January 1, 2005,

U.S. textile and apparel imports in 2005 grew by 8.3 percent over the 2004 level to

approximately $89.2 billion. China was the principal beneficiary of the quota removal, as

U.S. textile and apparel imports from China increased by 43.8 percent to approximately

$22.4 billion in 2005. The rate of growth in China’s shipments likely would have been even

higher had it not been for a series of safeguard actions imposed by the United States on

selected Chinese textile and apparel articles during 2005.27
28 Statistics in figure 1-2 may not match with those in appendix tables A-22 through A-48 because of

adjustments made to the data.

1-8

U.S. Merchandise Trade with Leading Partners

Table 1-2 shows U.S. trade with selected major trading partners and the world for 2005.

Leading U.S. exports to and imports from these partners are presented in tables A-22 through

A-48.28 NAFTA partners Canada and Mexico, combined, remain the largest U.S. global trade

market for exports and imports, followed by the EU-25 single market. Figures 1-2 and 1-3

show leading U.S. export and import markets by share.

Table 1–2 U.S. trade with major trading partners and with the world, 2005

Major trading partners Exports Imports Trade balance

 )))))))))))))))))))))Billion dollars)))))))))))))))))

EU-25 167.4 307.0 -139.6

Canada 183.2 287.5 -104.3

China 38.9 242.6 -203.7

Mexico 101.7 169.2 -67.5

Japan 51.5 137.8 -86.3

Taiwan 20.5 34.6 -14.1

Korea 26.2 43.1 -16.9

India 7.0 18.7 -11.7

Russia 3.6 15.3 -11.7

World 804.0 1,662.4 -858.4

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

Figure 1-2 Leading U.S. export markets, by share, 2005

Canada

23%

EU-25

China 21%

5%

Taiw an

3%

Other

26%

Mexico

13%

Japan

6%

Korea

3%

Source: U.S. Department of Commerce. 
29 Developments with respect to U.S. textile and apparel imports from China, including safeguard

actions undertaken by the United States, are discussed in chapter 2 of this report. U.S. bilateral trade relations

with China are discussed in chapter 5 of this report.

1-9

In 2005, China displaced Mexico as the second-largest individual two-way trading partner

of the United States after Canada. U.S. imports from China grew by 23.7 percent in 2005,

compared to the 9.2 percent growth in U.S. imports from Mexico. The U.S. trade deficit with

China rose from $163.5 billion in 2004 to $203.7 billion in 2005, or by $40.2 billion. China

alone accounted for 23.7 percent of the total U.S. deficit. This large and widening bilateral

trade deficit was a subject of concern for U.S. policymakers in U.S.-China trade relations

during 2005.29

Despite overall appreciation of the dollar during the year, as discussed above, total U.S.

exports expanded by 10.6 percent during 2005. U.S. export growth was aided by strong

economic growth in several major U.S. trading partners and their increased demand for U.S.

goods. U.S. exports to the EU-25, Canada, China, and Mexico increased by 7.5 percent, 12.3

percent, 19.2 percent, and 9.3 percent, respectively. The overall trade effects on the United

States of Hurricanes Katrina and Rita appeared to be minimal. Disruptions in U.S. beef

exports during the year are discussed in the box below on bovine spongiform encephalopathy

(BSE).

Figure 1-3 Leading U.S. import sources, by share, 2005

Canada

18%

EU-25

19%

M exico

Japan 10%

8%

China

15%

Korea

3%

Other

25%

Taiwan

2%

Source: U.S. Department of Commerce.
30 The United States was a party to six FTAs in effect as of Dec. 31, 2005—the U.S.-Australia FTA,

which entered into force on Jan. 1, 2005; the U.S.-Chile FTA (2004); the U.S.-Singapore FTA (2004); the U.S.-

Jordan FTA (2001); NAFTA (1994); and the U.S.-Israel FTA (1985). 31 U.S. trade with FTA partners is discussed in more detail in chapter 4 of this report.

1-10

U.S. exports of goods to FTA partners30 were valued at $330.0 billion in 2005, accounting

for 41.0 percent of total U.S. exports. U.S. imports of goods from FTA partners were valued

at $504.1 billion, or 30.3 percent of U.S. imports from the world. The overall U.S.

merchandise trade balance with FTA partners in 2005 was a deficit of $174.1 billion.

NAFTA partners Canada and Mexico accounted for most of that trade.31

Impact of Bovine Spongiform Encephalopathy (BSE) on U.S. Beef Exports

Several U.S. trading partners banned imports of U.S. beef and beef products in December 2003 after a cow of Canadian origin,

found in a U.S. herd, was determined to be infected with BSE. Before BSE was detected in the United States, 133 countries

imported U.S. beef and beef products; of these, 72 instituted bans after December 2003. The 17 largest markets accounted for

98 percent of total U.S. beef exports of $3.6 billion in 2003. Six of the 17 largest markets that remained mostly closed to

shipments of U.S. beef and beef product exports in 2005 (China, Hong Kong, Japan, Korea, Russia, and Singapore) accounted

for 65 percent of U.S. beef exports in 2003. Consequently, the value of total 2005 exports was only 31 percent of 2003 exports.

For the countries that reopened their markets to U.S. beef and beef product exports, 2005 exports represented 84 percent of their

pre-BSE levels.

The two largest markets open to U.S. beef and beef product exports in 2005, Canada (U.S. beef and beef product exports valued

at $644 million) and Mexico ($209 million), accounted for 76 percent of total U.S. beef and beef product exports of slightly more

than $1 billion during 2005. U.S. beef exports to Mexico were 95 percent of their pre-BSE levels, while exports to Canada were

63 percent of pre-BSE levels. The Taiwanese market reopened to U.S. beef and beef product exports from April to June 2005;

Taiwan imported more than $41 million of U.S. beef and beef products in just those three months, representing nearly 55 percent

of pre-BSE trade (Taiwan opened its market to U.S. beef in April 2005, but closed the market in June 2005 following the

announcement of a second BSE case in the United States; Taiwan reopened its market to certain U.S. beef in January 2006).

Furthermore, U.S. beef exports to four countries have increased since 2003—Egypt (150 percent of pre-BSE level), Bahamas

(125 percent), Bermuda (120 percent), and Indonesia (112 percent)—accounting for $85 million in U.S. beef and beef product

exports in 2005 and representing nearly 8 percent of the total.

BSE developments with respect to U.S. beef exports to China, Japan, Korea, and Taiwan during 2005 are discussed in chapter

5 of this report.

Sources: Phil Seng, “Recovering International Beef Markets,” Prospering in Rural America, USDA Agricultural Outlook Forum

2006, Arlington, VA, Feb. 16–17, 2006, and USDA, “Taiwan Reopens Market to U.S. Beef,” news release No. 0023.06, Jan.

25, 2006.

Note.—This information is based on U.S. exports classified under the following HTS subheadings: 0201.10, 0201.20, 0201.30,

0202.10, 0202.20, 0202.30, 0206.10, 0206.21, 0206.22, 0206.29, 0210.20, and 1602.50. Data obtained from USITC Dataweb.
1

 19 U.S.C. 2451.

2

 19 U.S.C. 2254(d).

3

 USITC, Circular Welded Non-alloy Steel Pipe from China, investigation No. TA-421-6, USITC

publication No. 3807, Oct. 2005. 4

 Presidential Determination No. 2006-7 of Dec. 30, 2005, 71 FR 871, Jan. 5, 2006. 5

 The President proclaimed the safeguard action in March 2002. In December 2003, he terminated the

tariff and tariff rate quota measures that were part of that action, and continued in place an import licensing

system that monitored imports of certain steel products. See Proclamation 7529 of Mar. 5, 2002, 67 FR 10553,

Mar. 7, 2002; and Proclamation 7741 of Dec. 4, 2003, 68 FR 68483, Dec. 8, 2003. The licensing system, which

was administered by the U.S. Department of Commerce, terminated on Mar. 21, 2005. It was replaced by a new

program, also administered by Commerce, under different authority.

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CHAPTER 2

Administration of U.S. Trade Laws and

Regulations

This chapter surveys activities related to the administration of U.S. trade laws during 2005.

It covers the following: the import relief laws; the unfair trade laws; certain special tariff

provisions, including the U.S. Generalized System of Preferences (GSP), the African Growth

and Opportunity Act (AGOA), the Andean Trade Preference Act (ATPA), the Andean Trade

Promotion and Drug Eradication Act (ATPDEA), the Caribbean Basin Economic Recovery

Act (CBERA), and the Caribbean Basin Trade Partnership Act (CBTPA); and programs

affecting textile and apparel imports.

Import Relief Laws

Safeguard Actions

This section covers only safeguard actions under provisions administered by the USITC.

Safeguard actions under provisions administered by other agencies, such as the China textile

safeguard actions by the U.S. Department of Commerce, are described later in this chapter.

The USITC conducted two investigations under safeguard provisions during 2005, one under

the China safeguard provision in section 421 of the Trade Act of 1974,1

 and the second under

section 204(d) of the Trade Act of 19742

 with respect to the effectiveness of the recently

terminated global safeguard measures on steel imports. In the China safeguard investigation,

which concerned imports of circular welded non-alloy steel pipe from China, the USITC

made an affirmative determination and recommended import relief to the President.3

However, the President determined that import relief was not in the national economic

interest and did not provide relief.4

 In the second investigation, the USITC reported to the

President and the Congress on the effectiveness of recently terminated global safeguard

measures on imports of certain steel products in facilitating positive adjustment to import

competition by the domestic steel industries.5

 In its report, the USITC summarized trade and

other information relating to imports and the condition of certain domestic steel industries
6

 USITC, Steel: Evaluation of the Effectiveness of Import Relief, investigation No. TA-204-12, USITC

publication No. 3797, Sep. 2005. 7

 President, “Memorandum for the United States Trade Representative,” news release, Mar. 3, 2004. 8

 The President signed the Trade Adjustment Assistance Reform Act of 2002 (TAA Reform Act) into

law on Aug. 6, 2002. The TAA Reform Act reauthorized the TAA program through fiscal year 2007, and

amended and added provisions to the TAA program. 9

 Petitions may be filed by a group of three or more workers, by a company official, by One-Stop

operators or partners (including state employment security agencies and dislocated worker units), or by a union

or other duly authorized representative of such workers. The workers on whose behalf a petition is filed must

be, or have been, employed at the firm or subdivision identified in the petition. A completed petition describes

a group of workers working at a specific location, for a specific company, producing a specific product or group

of products. If the group of workers described in the petition is certified, the certification will cover all workers

in the group, whether or not their names are on the petition. U.S. Department of Labor, “Trade Adjustment

Assistance (TAA) and Alternative Trade Adjustment Assistance (ATAA) Application Process,”

http://www.doleta.gov/tradeact/petitions.cfm. 10 U.S. Department of Labor, “Number of TAA Petitions Received, Certifications Issued, and Denials

Issued by State, 2005,” prepared Apr. 24, 2006, http://www.doleta.gov/tradeact/states2005.cfm. 11 Ibid., and U.S. Department of Labor, “Number of TAA Petitions Received, Certifications Issued,

and Denials Issued by State, 2004,” prepared April 24, 2006, http://www.doleta.gov/tradeact/states2004.cfm.

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since March 2002, when the safeguard measures were imposed, including the adjustment

efforts undertaken since that time by the industries.6

There were no safeguard petitions pending before the USITC at the end of 2005.

Adjustment Assistance

The Trade Adjustment Assistance (TAA) program, set forth in section 221 of the Trade Act

of 1974, authorizes the U.S. Secretary of Commerce and the U.S. Secretary of Labor to

provide adjustment assistance to firms and workers from the 50 states, the District of

Columbia, Puerto Rico, and the U.S. Virgin Islands who are adversely affected by increased

imports.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. Such

assistance takes the form of monetary benefits for direct trade readjustment allowances and

reemployment services that include allocations for job search, relocation, transportation

subsidies, and training. TAA for farmers is administered by the U.S. Department of

Agriculture (USDA), and provides technical assistance and cash benefits to eligible

producers of raw commodities. TAA for firms consists primarily of a matching funds

program sponsored by the U.S. Department of Commerce to help U.S. manufacturers

experiencing sales and employment declines as a result of import competition.8

Trade Adjustment Assistance for Workers

The U.S. Department of Labor received 2,635 TAA petitions9 during FY 2005 (October 1,

2004 through September 30, 2005).10 The FY 2005 figure represents a decrease from the

2,991 TAA petitions received in FY 2004 (table 2-1).11

Table 2-1 shows the results of TAA petition determinations during FY 2004 and FY 2005.

In FY 2005, a total of 1,551 petitions were certified as eligible for benefits and services, and

751 petitions were denied, a decrease from 1,808 petitions certified and 945 petitions denied
12 The number of petitions certified for benefits and services and petitions denied will not add up to

the total number of petitions received because the numbers do not reflect petitions that were terminated prior to

a determination and petitions in which a determination was made in the following fiscal year. 13 For workers to be certified as eligible to apply for TAA, the Secretary of Labor must determine that

workers in a firm have become, or are threatened to become, totally or partially separated; that the firm’s sales

or production has decreased absolutely; and that increases in like or directly competitive imported products

contributed importantly to the total or partial separation and to the decline in the firm’s sales or production.

Workers certified for TAA are provided with a certification of eligibility and may apply for TAA benefits at the

nearest office of the State Employment Security Agency. For further information, see U.S. Department of Labor,

Employment and Training Administration, “Trade Adjustment Assistance (TAA) and Alternative Adjustment

Assistance (ATAA) Application Process,” http://www.doleta.gov/tradeact/petitions.cfm#2. 14 Data supplied by U.S. Department of Labor, Employment and Training Administration, May 4, 2006.

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Table 2–1 Petitions certified and denied under the trade adjustment assistance program and estimated number of

workers affected, FY 2004 and FY 2005

Item

Number of TAA petitionsa Estimated number of workers coveredb

FY 2004 FY 2005 FY 2004 FY 2005

Petitions certified for benefits and services 1,808 1,551 149,300 117,360

Petitions denied 945 751 56,805 38,179

 Total petitions received 2,991 2,635

Source: U.S. Department of Labor, Employment and Training Administration, Division of Trade Adjustment

Assistance.

a

The number of petitions certified for benefits and services and petitions denied will not add up to the total number

of petitions received because the numbers do not reflect petitions that were terminated prior to a determination and

petitions in which a determination was made in the following fiscal year. b

The estimated number of workers covered by a certification is not an exact figure. It is an estimate developed at

the time the certification is issued. A certification covers all members of the affected worker group laid off during the

approximately three-year period covered by the certification. Over the course of time, additional workers may be laid

off, workers who were laid off may be recalled, or planned layoffs may not occur.

in FY 2004.12 A total of 117,360 workers were certified for TAA benefits and services in FY

2005.13 This was a decline from the 149,300 workers certified in FY 2004.

Table 2-2 presents data on benefits and services provided under the TAA program. There

were 55,407 new TAA recipients in FY 2005, compared to 84,048 new recipients in FY

2004. The Department of Labor awarded $1.1 billion to provide benefits and services to

eligible workers under the TAA program in FY 2005, a decrease from $1.3 billion in FY

2004. State allocations totaled $915 million in FY 2005.14

Table 2–2 Benefits and services provided under the trade adjustment assistance program, FY 2004 and FY 2005

Item

Estimated number of participants

FY 2004 FY 2005

---------------Trade readjustment allowance benefits---------------

Number of new recipients 84,048 55,407

 Total Federal allocations (billion dollars) 1.3 1.1

 Total State allocations (million dollars) 826 915

----------Training, job search, and relocation services-----------

Number entering training 53,265 38,195

Number receiving a job search allowance 478 296

Number receiving a relocation allowance 839 456

Source: U.S. Department of Labor, Employment and Training Administration, Division of Trade Adjustment

Assistance.
15 Among the criteria for assistance and benefits, “[p]roducer prices during the most recent marketing

year must be less than or equal to 80 percent of the national average price during the previous 5 marketing years.

In addition, FAS must make a determination that increases in imports of like or competitive products ‘contributed

importantly’ to the decline in prices.” USDA, “Trade Adjustment Assistance for Farmers,”

http://www.fas.usda.gov/itp/taa/taaindex.htm; and USDA, “Trade Adjustment Assistance for Farmers: Trade Act

of 2002: FAQ’s,” http://www.fas.usda.gov/itp/taa/taafaq.htm. 16 A qualified fisherman means a person whose catch competes in the marketplace with like or directly

competitive aquaculture products. 17 USDA, “Trade Adjustment Assistance for Farmers.”

18 Cash benefits are paid only to producers who certify that, among other things, their net income from

farming, aquaculture or fishing has declined. Technical assistance is available to all producers. USDA, “Trade

Adjustment Assistance for Farmers.” Statistics supplied by USDA, May 4, 2006. 19 The TAA for firms program works “with a variety of manufacturers and for some, imports represent

only a minor challenge. For others, they pose a serious threat. Regardless of the degree of impact, a firm may

be eligible if it experienced sales and employment declines at least partially due to imports over the last two

years.” U.S. Department of Commerce, Economic Development Administration, “Trade Adjustment Assistance

for Firms: FAQs,” http://www.taacenters.org/faqs.html.

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Trade Adjustment Assistance for Farmers

The Trade Act of 2002 established the Trade Adjustment Assistance for Farmers (TAA for

Farmers) program administered by USDA. Under the program, USDA provides technical

assistance and cash benefits to eligible producers of raw agricultural commodities when the

administrator of the Foreign Agricultural Service (FAS) determines that increased imports

have been an important factor contributing to a specific price decline over five preceding

marketing years.15 The TAA Reform Act authorizes an appropriation of not more than $90

million for each fiscal year, 2003 through 2007, to carry out the program. The program

covers farmers, ranchers, fish farmers, and fishermen,16 but it does not cover the forest

products industry.17

Table 2-3 shows that of the 29 petitions filed for TAA for Farmers in FY 2005, 14 petitions

were certified covering 3,686 farmers, ranchers, fish farmers, and fishermen.

Table 2–3 Results of petitions filed under the trade adjustment assistance program for farmers, FY 2005

Number of petitions

Number of farmers, ranchers, fish

farmers, and fishermen

Petitions certified 14 3,686

Petitions denied 15 76

 Total petitions 29 3,762

Source: U.S. Department of Agriculture.

According to USDA, benefits totaling an estimated value of $15.1 million (cash and

technical assistance) were provided to recipients under the program in FY 2005. Cash

benefits paid under the program totaled approximately $13.3 million in FY 2005.18

Trade Adjustment Assistance for Firms

The TAA for firms program is a matching funds program sponsored by the U.S. Department

of Commerce for U.S. manufacturers facing import competition.19 Federal assistance

awarded under the program pays for up to one-half of the costs of consultants, engineers,

designers, or industry experts for projects to improve a manufacturer’s competitiveness in

areas such as manufacturing, engineering, marketing, information technology, and quality
20 U.S. Department of Commerce, Economic Development Administration, “Trade Adjustment

Assistance for Firms: Program Benefits,” http://www.taacenters.org/benefits.html. 21 Data provided by U.S. Department of Commerce, EDA, Apr. 18, 2006. 22 Sections 301–309 of the Trade Act of 1974, as amended (19 U.S.C. 2411–2419).

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control. The TAA for firms program participates in projects valued up to $150,000, with a

maximum TAA share of $75,000.20

In FY 2005, the Economic Development Administration (EDA) of the U.S. Department of

Commerce awarded a total of $12.0 million in TAA program funds to its national network

of 11 Trade Adjustment Assistance Centers (TAACs). TAACs, typically sponsored by

universities or nonprofit organizations, are the primary point of contact for firms during the

certification and adjustment proposal processes under the TAA program. EDA certified 171

petitions as eligible for TAA for firms, and approved 132 adjustment projects during FY

2005.21

Laws Against Unfair Trade Practices

Section 301 Investigations

Sections 301-310 of the Trade Act of 1974 (the Trade Act) are the principal U.S. statutes for

addressing foreign unfair practices affecting U.S. exports of goods or services.22 Section 301

may be used to enforce U.S. rights under bilateral and multilateral trade agreements and also

may be used to respond to unreasonable, unjustifiable, or discriminatory foreign government

practices that burden or restrict U.S. commerce. Interested persons may petition USTR to

investigate foreign government policies or practices, or USTR may initiate an investigation.

If the investigation involves a trade agreement and consultations do not result in a settlement,

section 303 of the Trade Act requires USTR to use the dispute settlement procedures that are

available under the subject agreement. If the matter is not resolved by the conclusion of the

investigation, section 304 of the Trade Act requires USTR to determine whether the practices

in question deny U.S. rights under a trade agreement; whether they are unjustifiable,

unreasonable, or discriminatory; and whether they burden or restrict U.S. commerce. If the

practices are determined to violate a trade agreement or to be unjustifiable, USTR must take

action. If the practices are determined to be unreasonable or discriminatory, and to burden

or restrict U.S. commerce, 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.

Active Cases in 2005

In 2005, the active cases under section 301 concerned the EU’s meat hormone directive and

Ukraine’s IPR protection (table 2-4). In the meat hormone case, the United States

successfully challenged at the WTO an EU law that banned imports of meat from animals

that had been treated with certain hormones. The EU law effectively banned imports of U.S.

beef and beef products. The WTO panel and the Appellate Body found that the ban violated

the EU’s WTO obligations because the EU law was not based on objective scientific 
23 See USTR, 2006 Trade Policy Agenda and 2005 Annual Report, March 2006, p. 225. In January

2005, the EU claimed that new legislation brought its legal regime into compliance with the recommendations

and rulings of the Dispute Settlement Body and with its obligations under the WTO Agreement on the

Application of Sanitary and Phytosanitary Measures. Accordingly, the EU initiated dispute settlement

proceedings and, in February 2005, a panel was established to consider whether the retaliatory duties should be

lifted. 24 The GSP program is discussed in more detail below.

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Table 2–4 Active section 301 cases in 2005

Docket No. Summary and actions occurring during course of investigation

301-62a European Union and the Meat Hormone Directive

In 1997, the WTO found that the EU’s ban on meat produced from animals treated with growth

hormones was inconsistent with its WTO obligations. In 1999, when the EU had not implemented the

WTO recommendations, the United States requested and received authorization from the WTO to

retaliate against imports from the EU. The increased duties remained in effect during 2005. Bilateral

consultations were held during 2005, yet the issue remained unresolved at year-end.

301-121 Ukraine and the Protection of Intellectual Property Rights

In 2001, USTR identified Ukraine as a priority foreign country under the special 301 provisions of the

section 301 law due to its denial of adequate and effective protection of IPR. In a parallel proceeding,

USTR suspended Ukraine’s eligibility for GSP benefits because of inadequate and ineffective IPR

protection. When ongoing bilateral consultations did not result in an agreement that satisfactorily

addressed the optical media piracy situation in Ukraine, USTR issued a preliminary retaliation list

under section 301. In December 2001, USTR announced that the United States would impose

prohibitive duties on certain imports from Ukraine. The suspension of GSP benefits and the additional

duties remained in effect until 2005. In 2005, Ukraine strengthened its licensing regime and

enforcement capabilities, and USTR terminated the retaliatory duties. In January 2006, USTR

reinstated Ukraine’s GSP benefits in recognition of its continuing progress in addressing U.S. concerns

regarding IPR protection.

Source: Compiled by the U.S. International Trade Commission.

evidence. The EU did not comply with the ruling, so the United States sought and received

WTO authorization to withdraw concessions on a commensurate amount of trade.

Accordingly, in July 1999, the United States imposed additional 100 percent ad valorem

duties on about $117 million in imports from the EU. The additional duties have remained

in effect since that time, and the bilateral trade dispute remains unresolved.23

After identifying Ukraine as a priority foreign country under the “special 301” provisions

of the section 301 law in 2001 due to its denial of adequate and effective IPR protection,

USTR initiated a special 301 investigation. Specifically, Ukraine was found to have failed

to address a significant level of optical media piracy that caused substantial damage to U.S.

rights-holders and disrupted markets throughout the region, and also was found to have

failed to fulfill commitments made in the June 2000 U.S.-Ukraine Joint Action Plan to

Combat Optical Media Piracy in Ukraine. In a parallel proceeding, USTR suspended

Ukraine’s eligibility for the GSP program24 due to inadequate and ineffective protection of

IPR. When bilateral consultations failed to result in an agreement that satisfactorily

addressed optical media piracy, USTR issued a preliminary retaliation list under section 301.

In December 2001, USTR announced that the United States would impose 100 percent ad

valorem duties on $75 million in imports from Ukraine. Bilateral consultations continued,

but the suspension of GSP benefits and the additional duties remained in effect at the

beginning of 2005.

In August 2005, Ukraine amended its Laser-Readable Disc Law to strengthen its licensing

regime and enforcement capabilities and thereby address the illegal production and trade of

optical media products. In response to these amendments, USTR terminated the retaliatory
25 USTR, “USTR Lifts Tariff Sanctions Against Ukraine, Announces Out-of-Cycle Review,” press

release, Aug. 31, 2005. 26 USTR, “USTR Reinstates Generalized System of Preferences Benefits for Ukraine,” press release,

Jan. 23, 2006. 27 China’s currency valuation policies are discussed in more detail in the section on China in chapter

5 of this report. 28 USTR, “Statement from USTR Spokesperson Richard Mills Regarding a Section 301 Petition on

China’s Currency Regime,” Washington, D.C., May 27, 2005. 29 Section 182 of the Trade Act of 1974 (19 U.S.C. 2242).

30 Section 182(d)(4) of the Trade Act of 1974 (19 U.S.C. 2242 (d)(4)).

31 Ibid.

32 Section 182(b)(1) of the Trade Act of 1974 (19 U.S.C. 2242 (b)(1)).

2-7

duties, but the GSP suspension remained in place.25 In January 2006, in recognition of

Ukraine’s continuing efforts to improve IPR protection and enforcement, USTR reinstated

Ukraine’s GSP benefits.26

During 2005, USTR received one petition seeking the initiation of a new investigation under

section 301. The petition alleged that China’s policies and practices regarding the valuation

of its currency deny and violate international legal rights of the United States, are

unjustifiable, and burden or restrict U.S. commerce.27 USTR determined not to initiate an

investigation with respect to the petition because the United States is involved in ongoing

bilateral efforts to address the currency valuation issues raised in the petition, and because

the initiation of an investigation would not be effective in addressing the policies and

practices covered in the petition.28

Special 301

The special 301 provisions of the Trade Act of 1974, as amended, require USTR to identify

foreign countries that deny adequate and effective protection of IPR or fair and equitable

market access for U.S. persons who rely on IPR protection.29 Special 301 was amended in

the 1994 Uruguay Round Agreements Act to clarify that a country can be found to deny

adequate and effective IPR protection even if it is in compliance with its obligations under

the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS

Agreement).30 It was also amended to direct USTR to take into account a country’s prior

status under special 301, the history of U.S. efforts to achieve stronger intellectual property

protection, and the country’s response to such efforts.31

Once the foreign countries that deny adequate and effective IPR protection are identified,

USTR is required to decide which, if any, should be designated a priority foreign country,

which is one that (1) has the most onerous and egregious acts, policies, and practices that

have the greatest adverse impact (actual or potential) on the relevant U.S. products; and (2)

is not engaged in good faith negotiations or making significant progress in negotiations to

address these problems.32 In addition to identifying priority foreign countries as required by

statute, USTR also uses the special 301 report to identify “priority watch list” and “watch

list” countries or economies. Trading partners listed as priority watch countries do not

provide an adequate level of IPR protection or enforcement, or market access for persons

relying on intellectual property protection. Trading partners on the watch list merit bilateral

attention to address IPR problems. Certain other countries with serious IPR-related problems

are subject to another part of the statute, section 306 monitoring, because of previous
33 USTR, 2006 Special 301 Report, April 2006. 34 USTR, 2005 Special 301 Report, April 2005. 35 Ibid.

36 Ibid. In its 2006 report. USTR reported that the United States lowered Ukraine from the priority

foreign country list to the priority watch list and reinstated Ukraine’s GSP benefits. USTR, 2006 Special 301

Report, April 2006. 37 USTR, 2005 Special Report, April 2005. 38 USTR, China Out-of-Cycle Review Results, April 2005, p.1. 39 Ibid. Additional information is provided in the section on China in chapter 5 of this report.

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bilateral agreements reached with the United States to address specific problems raised in

earlier reports.33

In the 2005 special 301 report, USTR devoted special attention to the need for significantly

improved enforcement against piracy and counterfeiting. Losses to the U.S. industry as a

result of piracy and counterfeiting are estimated at $200–$250 billion a year.34 The report

included an overview of the Administration’s Strategy Targeting Organized Piracy (STOP!)

initiative and discussed increasing concerns regarding the transshipment of counterfeit and

pirated products through countries with inadequate border enforcement and the use of free

trade zones, both to transship and to manufacture counterfeit and pirated products. In

addition, the USTR report continued to focus on Internet piracy and full implementation of

the World Intellectual Property Organization (WIPO) Internet Treaties, implementation of

the TRIPS Agreement by both developing countries and new WTO members, protection of

confidential test data for pharmaceuticals, and ensuring that ministries of foreign

governments use only authorized software.35

The 2005 special 301 annual review examined in detail the adequacy and effectiveness of

IPR protection in 90 countries. Of those 90 countries, 52 were designated in the categories

of priority foreign country, section 306 monitoring, priority watch list, or watch list. Ukraine

was designated a priority foreign country, and the $75 million in sanctions, first imposed on

Ukrainian products on January 23, 2002, remained in place for 2005.36 Although Paraguay

made significant and commendable efforts to improve IPR protection, it remained subject

to Section 306 monitoring in 2005. Thirteen countries were designated on the priority watch

list, and 35 countries were designated on the watch list. The report stipulated that Indonesia,

the Philippines, Russia, Canada, and Poland would have out-of-cycle reviews during 2005.37

Particular attention was paid to China in the 2005 special 301 report. In its 2004 Special 301

report, USTR announced that it would conduct an OCR in early 2005 to evaluate China’s

implementation of its commitments made at the 15th annual meeting of the Joint

Commission on Commerce and Trade in April 2004. While USTR acknowledged that there

have been increased efforts to improve IPR protection in China, it concluded that the level

of infringement remained very high.38 As a result, China was elevated to priority watch list

and the United States will be exploring its options within the WTO to bring China into

compliance with its WTO TRIPS obligations, particularly those requiring transparency and

a criminal IPR enforcement system with deterrent effect. USTR is to maintain section 306

monitoring of China’s implementation of its 1992 and 1995 bilateral agreements with the

United States (including additional commitments made in 1996).39
40 19 U.S.C. 1673 et seq.

41 19 U.S.C. 1677b; 19 CFR part 353, subpart D.

42 Upon the filing of a petition, the Commission has 45 days to determine whether there is a reasonable

indication that an industry in the United States 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 of the

merchandise subject to the investigation. This is known as the preliminary phase of the investigation. If the

Commission makes an affirmative determination, Commerce continues its investigation and makes preliminary

and final determinations concerning whether the imported merchandise is being, or is likely to be, sold at LTFV.

If Commerce reaches a final affirmative dumping determination, the Commission has 45 days to make its final

injury determination. If the Commission’s reasonable indication or preliminary phase determination is negative,

both the Commission and Commerce terminate further investigation. 43 Data reported here and in the following two sections (“Countervailing Duty Investigations” and

“Reviews of Outstanding Antidumping and Countervailing Duty Orders/Suspension Agreements”) reflect the

total number of investigations. In other Commission reports these data are grouped by product because the same

investigative team and all of the parties participate in a single grouped proceeding, and the Commission generally

produces one report and issues one opinion containing its separate determinations for each investigation. 44 An antidumping 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 eliminate completely the injurious effect of exports of the subject

(continued...)

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Antidumping Investigations

The U.S. antidumping law is contained in Title VII of the Tariff Act of 1930, as amended.40

The antidumping law provides relief in the form of special additional duties that are intended

to offset margins of dumping. Antidumping duty orders are imposed when (1) the U.S.

Department of Commerce (Commerce), the administering authority, has determined that

imports are being, or are likely to be, sold at less than fair value (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 such imports. 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 U.S. 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.41 The antidumping duty is calculated to

equal the difference between the U.S. price and the foreign-market value. The duty specified

in an antidumping order reflects the dumping margin found by Commerce during its period

of investigation. This rate of duty will be applied to subsequent subject imports from the

specified producers/exporters in the subject country if Commerce does not receive a request

for annual reviews.

Commerce and the Commission each conduct preliminary and final antidumping

investigations in making their separate determinations.42 The Commission instituted 12 new

antidumping investigations and completed 29 investigations during 2005.43 Antidumping

duty orders were imposed in 2005 on products from 13 countries as a result of affirmative

determinations in 17 of those completed investigations. The antidumping duty orders

imposed in 2005 are listed in table 2-5 (in alphabetical order by country). 

Details on all antidumping investigations active at the Commission during 2005 are

presented in table A-4. A list of all antidumping duty orders, including suspension

agreements,44 in effect as of the end of the year is presented in table A-5.
44 (...continued)

merchandise to the United States. A suspended investigation is reinstituted if LTFV sales recur. See 19 U.S.C.

1673c. 45 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. See 19 U.S.C. 1677(5) and 1677-1(a). 46 A countervailing duty investigation may be suspended if the government of 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. In extraordinary circumstances, an investigation may be suspended if the government

of the subsidizing country or exporters agree to revise the subsidy to eliminate completely the injurious effect

of exports of the subject merchandise to the United States. A suspended investigation is reinstituted if

subsidization recurs. See 19 U.S.C. 1671c.

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Table 2–5 Antidumping duty orders that became effective during 2005

Country Product

Range of duty

(in percent)

Brazil Frozen or canned warm-water shrimp and prawns 4.97–67.80

China Wooden bedroom furniture 0.83–198.08

China Crepe paper 266.83

China Frozen or canned warm-water shrimp and prawns 0.07–112.81

China Tissue paper 112.64

China Magnesium 49.66–141.49

China Chlorinated isocyanurates 75.78-285.63

Ecuador Frozen or canned warm-water shrimp and prawns 1.97–4.42

Finland Carboxymethylcellulose 6.65

India Frozen or canned warm-water shrimp and prawns 4.94–15.36

Japan Superalloy degassed chromium 129.32

Mexico Carboxymethylcellulose 12.61

Netherlands Carboxymethylcellulose 13.39–14.88

Russia Magnesium 18.65–21.71

Spain Chlorinated isocyanurates 24.83

Sweden Carboxymethylcellulose 25.29

Thailand Frozen or canned warm-water shrimp and prawns 5.29–6.82

Vietnam Frozen or canned warm-water shrimp and prawns 4.30–25.76

Source: Compiled by USITC from Federal Register notices.

Countervailing Duty Investigations

The U.S. countervailing duty law is also set forth in title VII of the Tariff Act of 1930, as

amended. It provides for the levying of special additional duties to offset foreign subsidies

on products imported into the United States.45 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.

The Commission instituted two new countervailing duty investigations and completed three

investigations during 2005 (see table A-6). No countervailing duty orders were imposed as

a result of those completed investigations. Details on all countervailing duty investigations

active at the Commission during 2005 are presented in table A-6, and a list of all

countervailing duty orders, including suspension agreements,46 in effect at the end of the year

is presented in table A-7.
47 19 U.S.C. 1675c.

48 Thirteen of these reviews were subsequently terminated and the outstanding orders revoked because

a domestic industry did not request that they be continued. The 11 revoked antidumping duty orders were on

cotton shop towels from Bangladesh and China; creatine monohydrate from China; electroluminescent flat panel

displays from Japan; malleable cast iron pipe fittings from Japan and Korea; mechanical transfer presses from

Japan; sodium thiosulfate from China, Germany, and the United Kingdom; and steel rails from Canada. The two

revoked countervailing duty orders were on cotton shop towels from Pakistan and steel rails from Canada. 49 For detailed information on reviews instituted, as well as Commission action in all reviews, see the

Commission’s web site section entitled “Five-year (Sunset) Reviews,” at http://info.usitc.gov/oinv/sunset.NSF. 50 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 these other unfair acts are misappropriation

(continued...)

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Reviews of Outstanding Antidumping and Countervailing Duty

Orders/Suspension Agreements

Section 751 of the Tariff Act of 1930 requires Commerce, if requested, to conduct annual

reviews of outstanding antidumping and countervailing duty orders to determine the amount

of any 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. On the basis of either of these

reviews, Commerce may revoke an antidumping or countervailing duty order in whole or in

part or terminate or resume a suspended investigation. Two changed circumstances

investigations were completed by the Commission during 2005, both of which resulted in

the antidumping duty orders being continued. Table A-8 shows the completed changed

circumstances investigations in 2005.

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

and suspension agreements 5 years after their publication to determine whether revocation

of an order or suspension agreement would be likely to lead to continuation or recurrence

of dumping or a countervailable subsidy and material injury.47 During 2005, Commerce and

the Commission instituted 128 sunset reviews of existing antidumping and countervailing

duty orders48 and the Commission completed 73 reviews, resulting in 61 antidumping and

countervailing duty orders and suspension agreements being continued for five additional

years. Table A-9 shows completed reviews of antidumping and countervailing duty orders

and suspension agreements in 2005.49

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.50
50 (...continued)

of trade secrets, common law trademark infringement, trade dress infringement, 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, not under section 337. 51 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.

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If the Commission determines that a violation exists, it can issue an order to exclude the

subject imports from entry into the United States, or order the violating parties to cease and

desist from engaging in the unlawful practices.51 The President may disapprove a

Commission order within 60 days of its issuance for “policy reasons.”

During 2005, there were 58 active section 337 investigations and ancillary proceedings, 32

of which were instituted in 2005. Of these 32, there were 29 new section 337 investigations

and three new ancillary proceedings relating to previously concluded investigations. Further,

all 29 new section 337 institutions in 2005 included allegations of patent infringement. Six

investigations were terminated on the basis of settlement agreements and/or consent orders,

and nine investigations were terminated based on the withdrawal of the complaints. The

Commission completed a total of 31 investigations and ancillary proceedings under section

337 in 2005, including two enforcement proceedings and one combined enforcement and

advisory opinion proceeding. Ten exclusion orders and 12 cease-and-desist orders were

issued during 2005. Several investigations were terminated by the Commission without

determining whether section 337 had been violated. Generally, these terminations were based

on settlement agreements, consent orders, or withdrawal of complaints. 

As in recent years, the section 337 caseload was highlighted by investigations involving

complex technologies, particularly in the computer and telecommunications fields.

Significant among these were investigations involving flash memory circuits, digital image

storage and retrieval devices, digital processors, electric robots, network controllers,

communication systems for optical networks, and hand-held mobile computing devices.

Several other investigations involved sophisticated technologies relating to items such as

viruses for use in vaccines for treating smallpox, medical devices that locate internal human

organs for purposes of treatment or surgery, rubber antidegradants used in the manufacture

of vehicle tires, color television receivers and color display monitors, and point-of-sale

terminals. Other section 337 investigations active during the year concerned ink cartridges

for inkjet printers, axle bearing assemblies for motor vehicles, laminated floor panels,

masking tape for use in automobile re-painting, and automotive fuel caps.

At the close of 2005, there were 27 section 337 investigations and related proceedings

pending at the Commission. Commission activities involving section 337 actions in 2005 are

presented in table A-10. As of December 31, 2005, a total of 61 outstanding exclusion orders

based on violations of section 337 were in effect, of which 31 involve unexpired patents.

Table A-11 lists the investigations in which these exclusion orders were issued.
52 The U.S. GSP program has periodically expired and been retroactively renewed. The program is

scheduled to expire Dec. 31, 2006. 53 AGOA is discussed in more detail below.

54 19 U.S.C. 2462(b).

55 19 U.S.C. 2463.

56 70 FR 9431. 57 70 FR 17499.

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Other Import Administration Laws and Programs

U.S. Preferential Trade Programs

Generalized System of Preferences

The U.S. GSP program authorizes the President to grant duty-free access to the U.S. market

for designated articles that are produced in and imported from designated developing

countries and territories. The program is authorized by Title V of the Trade Act of 1974, as

amended (19 U.S.C. 2461 et seq.).52 It has been expanded to allow duty-free treatment for

certain other products when made in and imported only from countries designated as leastdeveloped beneficiary developing countries (LDBDCs). Further, Public Law 106-200,

enacted May 18, 2000, in Title I (AGOA) amended Title V to authorize the President to

provide duty-free treatment for certain articles when imported from countries designated as

beneficiary sub-Saharan African (SSA) countries.53

Under the program, the President designates countries as “beneficiary developing countries.”

The President cannot designate certain developed countries named in the statute and also

may not designate countries that, inter alia, afford preferential treatment to the products of

a developed country, other than the United States, that has, or is likely to have, a significant

adverse effect on U. S. commerce. The President cannot designate countries that do not

afford adequate protection to IPR or afford internationally recognized worker rights to their

workers.54 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 categories of articles (for example, footwear, textiles, and apparel) are

designated by statute as “import-sensitive” and thus are not eligible for duty-free treatment

under the GSP program.55 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 (unless otherwise specified in a Federal Register notice), USTR 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. The following

were key developments during the 2005 GSP review process:

• On February 25, 2005, USTR announced the product petitions that were

accepted for the 2004 GSP Annual Review and that the country practices

petitions accepted for review would be announced at a later date.56

• On April 6, 2005, USTR announced an addendum to the 2004 GSP Annual

Review of the addition of several self-initiated competitive need limit (CNL)

waivers requests.57
58 70 FR 24460 59 The modifications provided for the following: (1) termination of IPR violation suspension of GSP

treatment for India for 783 tariff lines, primarily in the chemicals and related products chapters; (2) designation

of Serbia and Montenegro as a GSP beneficiary; (3) restoration of GSP treatment for certain articles previously

removed from GSP treatment for Pakistan as a result of workers rights; (4) according of the members of the

South Asian Association for Regional Cooperation treatment as one country for purposes of GSP qualification;

(5) proclamation of 22 HTS lines that exceeded CNLs for various countries and would no longer qualify for GSP

treatment; (6) creation of tariff breakouts for certain textile and carpet products to allow products not woven on

power looms to qualify for GSP treatment; (7) designation of 7 HTS lines for which CNL waivers were granted;

(8) designation of 2 products which had previously only qualified for GSP treatment from LDBDCs to enter from

all beneficiaries (two HTS lines for dates); (9) redesignation of 10 products for which imports had decreased,

to be eligible for GSP from particular countries; (10) granting of 74 products de minimis waivers from CNLs for

certain countries; and (11) other tariff changes that affect AGOA, NAFTA, and other tariff provisions. President,

“Proclamation 7912—To Modify Duty-Free Treatment Under the Generalized System of Preferences and Certain

Rules of Origin under the North American Free Trade Agreement, and for Other Purposes,” 70 FR 37959, June

28, 2005. 60 70 FR 39843. 61 70 FR 15970. 62 70 FR 48623. 63 70 FR 54435. 64 70 FR 77237.

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• On May 9, 2005, USTR announced the initiation of the 2005 GSP Annual

Review.58

• On June 29, 2005, the President proclaimed certain modifications to the GSP

implementing decisions made in regard to the 2004 GSP Annual Review.59

These modifications were further clarified by USTR in a Federal Register

notice on July 11, 2005.60

Several other actions were taken by USTR under the GSP in 2005:

• On March 29, 2005, USTR published full-year import statistics notifying the

public of imported GSP items that exceeded CNLs, as well as inviting public

comment on possible waivers of CNL for products whose imports could be

considered de minimis, and comments on products subject to CNLs that were

eligible for redesignation as GSP qualifying as a result of decreased imports.61

• On August 18, 2005,62 USTR announced the acceptance of petitions to modify

the list of eligible products as part of the 2005 Annual Review.

• On September 14, 2005, USTR announced a review of country practices of GSP

beneficiaries.63

• On December 29, 2005, USTR announced initiation of a review to consider

designation of Liberia as an LDBDC under GSP.64

Duty-free imports entered under the GSP program totaled $26.7 billion in 2005, accounting

for 9.6 percent of total U.S. imports from GSP beneficiary countries and 1.6 percent of total

U.S. imports (table 2-6). India was the leading GSP beneficiary in 2005, followed by

Angola, Brazil, Thailand, and Indonesia. Table A-12 shows the top 20 GSP products or

product categories in 2005, and table A-13 shows the overall sectoral distribution of GSP

benefits.
65 In addition to providing preferential access to the U.S. market for eligible SSA products, AGOA also

includes a number of trade-facilitating provisions to, among other things, support trade liberalization in SSA

countries, encourage U.S.-SSA bilateral investment agreements, address the needs for trade capacity-building

by encouraging certain SSA infrastructure products, encourage the expansion of the agriculture sector in SSA

countries, and increase coordination between U.S. and SSA customs services. For further information, see USTR,

2005 Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and

Implementation of the African Growth and Opportunity Act, May 2005, p. 11, and USITC, Export Opportunity

and Barriers in African Growth and Opportunity Act-Eligible Countries, USITC publication 3785, October 2005. 66 The U.S. GSP program is described above.

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Table 2–6 U.S. imports for consumption from GSP beneficiaries and the world, 2005

(Million dollars)

Item

All GSP

beneficiaries World

Total U.S. importsa 270,183 1,653,353

 Non-GSP eligible imports 226,966 914,025

 GSP eligible imports 43,217 739,328

 GSP non-LDBDC eligibleb 31,686 338,581

 GSP LDBDC eligiblec 11,530 400,747

 Total GSP duty free imports 26,746

 Non-LDBDC GSP duty free 20,856

 GSP-LDBDC duty free 5,891

 Total of GSP eligible products not benefitting from GSP duty-free treatment 16,472 712,583

 GSP program exclusions 5,538 5,538

 All other 10,934 707,045

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

Note: Customs-value basis; excludes imports from the U.S. Virgin Islands. Because of rounding, figures may not add

to the totals shown.

a Includes imports from all beneficiary countries for the articles that are designated as eligible articles under GSP. b Non-LDBDC eligible products are those for which a rate of duty of "Free" appears in the Special Rate column of

the U.S. HTS followed by the symbols "A" or "A*" in parentheses. The symbol "A" indicates that all beneficiary

countries are eligible for duty-free treatment with respect to all articles provided for in the designated provisions, and

the symbol "A*" indicates that certain beneficiary countries, specified in general note 4(d) of the HTS, are not eligible

for duty-free treatment with respect to any article provided for in the designated provision. c LDBDC-eligible products are those for which a rate of duty of "Free" appears in the Special Rate column of the

HTS followed by the symbol "A+" in parenthesis. The symbol "A+" indicates that all LDBDCs, and only LDBDCs, are

eligible for duty-free treatment with respect to all articles provided for in the designated provisions. 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 receive duty-free

treatment under GSP for a number of reasons: the imports fail to claim GSP benefits affirmatively; the goods are from

a GSP beneficiary that lost GSP benefits on that product for exceeding the CNLs; the GSP beneficiary country may

claim duty-free treatment under some other program or provision of the HTS; or the good fails to meet the rule of

origin or direct shipment requirement of the GSP statute.

African Growth and Opportunity Act

In 2005, articles entering the United States free of duty under AGOA were valued at $32.7

billion. AGOA was enacted in 2000 to provide unilateral preferential trade benefits to

eligible SSA countries pursuing political and economic reform.65 AGOA expands GSP

benefits66 by providing duty-free market access to more than 1,800 additional qualifying

tariff line-item products from eligible SSA countries, and exempts beneficiaries from GSP

CNLs. AGOA also provides duty-free treatment for eligible apparel articles made in
67 AGOA was originally scheduled to be in effect until Sept. 30, 2008. Section 3108 of the Trade Act

of 2002 amended the original 2000 AGOA provisions and expanded preferential access for apparel imports from

SSA beneficiaries (these modifications collectively are referred to as AGOA II). The AGOA Acceleration Act

of 2004 (AGOA III) enhanced many of the original AGOA trade benefits, and generally extended AGOA

provisions until 2015. In this report, the term AGOA refers to the original AGOA, AGOA II, and AGOA III, as

a group. For further information, see USTR, 2005 Comprehensive Report on U.S. Trade and Investment Policy

Toward Sub-Saharan Africa and Implementation of the African Growth and Opportunity Act, May 2005. 68 Those following countries are listed in General Note 16 of the HTS as designated AGOA

beneficiaries: Angola, Benin, Botswana, Burkina Faso, Cameroon, Cape Verde, Chad, Republic of Congo,

Democratic Republic of Congo, Djibouti, Ethiopia, Gabon, The Gambia, Ghana, Guinea, Guinea-Bissau, Kenya,

Lesotho, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda,

São Tomé and Principe, Senegal, Seychelles, Sierra Leone, South Africa, Swaziland, Tanzania, Uganda, and

Zambia. See USITC, Harmonized Tariff Schedule of the United States, 2006 (rev. 2), p. 166. 69 The following 24 countries are listed in U.S. Note 7 of the HTS as eligible to receive AGOA apparel

benefits during 2005: Benin, Botswana, Cameroon, Cape Verde, Ethiopia, Ghana, Kenya, Lesotho, Madagascar,

Malawi, Mali, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa,

Swaziland, Tanzania, Uganda, and Zambia. See USITC, Harmonized Tariff Schedule of the United States, 2006

(rev. 2), sect. xxii, p. 98-II-3. 70 Section 107 of AGOA lists a total of 48 countries, or their successor political entities, as potentially

beneficiaries. 71 Section 104(a) of AGOA. See also USTR, 2005 Comprehensive Report on U.S. Trade and

Investment Policy Toward Sub-Saharan Africa and Implementation of the African Growth and Opportunity Act,

May 2005, p. 13.

72 The White House,”Proclamation by the President: To Take Certain Actions Under the African

Growth and Opportunity Act, 2005,” press release, Dec. 22, 2005. 73 The White House, “2005 African Growth and Opportunity Act Forum,”

http://www.state.gov/p/af/rls/rm/2005/49816.htm (accessed July 25, 2005).

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qualifying SSA countries (discussed in more detail below). AGOA is scheduled to be in

effect until 2015.67

A total of 37 SSA countries were designated for AGOA benefits as of January 1, 2005,68 and

24 SSA countries were eligible for AGOA textile and apparel benefits.69 Each year, the

President must consider whether SSA countries70 are, or remain, eligible for AGOA benefits

based on specific criteria. Those criteria include whether the country is making continued

progress toward establishing a market-based economy, enforcing the rule of law and political

pluralism, and promoting free trade and economic policies that will reduce poverty and

protect workers’ rights. Additionally, a country must not engage in violations of

internationally recognized human rights, support acts of international terrorism, or engage

in activities that undermine U.S. national security or foreign policy interests.71 The President

designated Burundi as AGOA eligible, and removed Mauritania from the list of eligible

countries, effective January 1, 2006.72

Section 105 of the original AGOA legislation requires the President to establish the U.S.-

SSA Trade and Economic Cooperation Forum. AGOA also requires USTR and the

Secretaries of State, Commerce, and the Treasury to host meetings with senior-level officials

from governments of countries that are eligible for AGOA benefits to discuss their trade,

investment, and development relationships. The President is also required, if possible, to

attend the forum every other year. The forum aims to establish an institutionalized economic

dialogue with SSA similar to those that the United States maintains with other regions of the

world, such as in the Asia-Pacific Economic Cooperation forum and the Summit of the

Americas. The fourth AGOA forum was held in July 2005 in Dakar, Senegal.73 On a

videotaped message shown at the forum’s opening ceremony, President Bush launched the

African Global Competitiveness Initiative to assist SSA entrepreneurs in business and
74 Florizelle Liser, “AGOA: A Five Year Assessment,” Oct. 12, 2005, www.house.gov (accessed Oct.

21, 2005).75 Imports from Nigeria, the leading supplier of petroleum under AGOA, increased only marginally

from 417.0 million barrels in 2004 to 418.8 million barrels in 2005; imports from Angola increased from 115.7

million barrels in 2004 to 169.9 million barrels in 2005; imports from Chad increased from 24.6 million barrels

in 2004 to 35.1 million barrels in 2005; and imports from Gabon declined from 52.1 million barrels in 2004 to

46.5 million barrels in 2005. Energy Information Administration, U.S. Department of Energy, “U.S. Imports by

Country of Origin,” http://tonto.eia.doe.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_a.htm

(accessed Apr. 23, 2006). 76 For a more detailed description of ATPA, including country and product eligibility, see USITC, The

Impact of the Andean Trade Preference Act, Eleventh Report 2004, USITC publication 3803, September 2005. 77 Public Law 107-210, Title XXXI.

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foreign trade activities, and committed $200 million to fund trade capacity building to

improve SSA global competitiveness.74

Total U.S. imports from AGOA countries were valued at $47.0 billion in 2005, more than

double the $20.2 billion in 2003 (table 2-7). Duty-free U.S. imports under AGOA, including

GSP, were valued at $38.1 billion in 2005 and accounted for 81.1 percent of all imports from

AGOA countries. U.S. imports under AGOA exclusive of GSP were valued at $32.7 billion

in 2005, almost triple the value of imports in 2003, and accounted for 69.7 percent of all

imports from AGOA countries.

Table 2–7 U.S. imports for consumption from AGOA countries, 2003–05

Item 2003 2004 2005

Total imports from AGOA countries (1,000 dollars) 20,229,905 34,406,599 47,002,789

 Total duty free under AGOA, including GSP (1,000 dollars) 14,105,065 26,558,922 38,146,396

 Duty-free under AGOA, excluding GSP (1,000 dollars) 13,189,410 21,986,472 32,743,077

 AGOA duty free as a percentage of total 65.2 63.9 69.7

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

The leading suppliers of duty free imports under AGOA in 2005 were Nigeria (68.6 percent

of total AGOA imports), Angola (12.9 percent), Gabon (7.6 percent), and Chad (3.1 percent).

These four petroleum-exporting countries accounted for more than 92.2 percent of total

imports by value under AGOA (table A-14). Of the 25 leading imports under AGOA by 8-

digit HTS (table A-15), imports of petroleum-related products increased to $30.9 billion in

2005, up 57.6 percent by value from 2004. Petroleum-related products accounted for more

than 94.3 percent of total AGOA imports by value in 2005, up from 89.3 percent of total

AGOA imports in 2004.75 Imports of apparel products decreased from $1.4 billion in 2004

to $1.2 billion in 2005, accounting for 3.8 percent of total AGOA imports by value in 2005,

down from 6.5 percent of total AGOA imports in 2004.

Andean Trade Preference Act

In 2005, articles from Bolivia, Colombia, Ecuador, and Peru entering the United States free

of duty under ATPA were valued at $11.5 billion (table 2-8). ATPA was enacted in 1991 to

promote broad-based economic development and viable economic alternatives to coca

cultivation and cocaine production by offering Andean products broader access to the U.S.

market.76 ATPA expired on December 4, 2001, but was renewed retroactively on August 6,

2002, under the Andean Trade Promotion and Drug Eradication Act (ATPDEA), part of the

Trade Act of 2002.77 ATPA, as amended by ATPDEA, is scheduled to expire on December

31, 2006.
78 President, “Proclamation 7616—To Implement the Andean Trade Promotion and Drug Eradication

Act,” 67 FR 67283–67291, Oct. 31, 2002.

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Table 2–8 U.S. imports for consumption from ATPA countries, 2003–05 

Item 2003 2004 2005

Total imports from ATPA countries (1,000 dollars) 11,639,464 15,489,766 20,060,117

 Total under ATPA provisions (1,000 dollars) 5,836,032 8,359,258 11,463,949

 Imports under ATPDEA (1,000 dollars) 4,211,384 6,522,889 9,303,218

 Total under ATPA, excluding ATPDEA (1,000 dollars) 1,624,648 1,836,369 2,160,731

 Total under ATPA as a percentage of total 50.1 54.0 57.1

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

The four ATPA beneficiaries are not automatically eligible for ATPDEA preferences.

ATPDEA authorizes the President to designate any ATPA beneficiary as eligible for

ATPDEA benefits provided the President determines the country has satisfied certain

requirements, including protection of IPR and internationally recognized workers rights. The

President designated all four ATPA beneficiaries as ATPDEA beneficiaries on October 31,

2002.78

A wide range of products are eligible for duty-free entry under ATPA. ATPDEA amended

ATPA to provide duty-free treatment for certain products previously excluded from ATPA,

including certain textiles and apparel (discussed in more detail below), footwear, petroleum

and petroleum derivatives, watches and watch parts assembled from parts originating in

countries not eligible for normal trade relations (NTR) rates of duty, and certain tuna

packaged in foil or other flexible airtight packages (not cans). In addition, certain products

previously eligible for reduced-duty treatment are now eligible for duty-free entry under

ATPA, including certain handbags, luggage, flat goods (such as wallets, change purses, and

eyeglass cases), work gloves, and leather wearing apparel. Products that continue to be

excluded from ATPA preferential treatment include textile and apparel articles not otherwise

eligible for preferential treatment under ATPDEA, and certain agricultural products.

Provisions related to textiles and apparel are discussed in more detail later in this chapter.

With the exception of tuna in foil or flexible airtight packages, ATPDEA did not grant new

benefits to agricultural products. Thus, canned tuna, rum and tafia, and above-quota imports

of certain agricultural products subject to tariff rate quotas (primarily sugar, beef, and dairy

products) continue to be excluded from the program.

Total (dutiable and duty-free) U.S. imports from Bolivia, Colombia, Ecuador, and Peru were

valued at $20.1 billion in 2005, an increase of 29.5 percent from $15.5 billion in 2004 (table

2-8). U.S. imports entered under ATPA preferences in 2005 were valued at $11.5 billion and

accounted for 57.1 percent of all imports from ATPA countries. U.S. imports under

ATPDEA were valued at $9.3 billion and accounted for 81.1 percent of imports under ATPA

in 2005. U.S. imports under the original ATPA (ATPA excluding ATPDEA) accounted for

the remaining 18.9 percent, valued at $2.2 billion.

In 2005, U.S. imports under ATPA increased from each of the four beneficiary countries

(table A-16). Colombia remained the largest source of U.S. imports under ATPA in 2005.

Ecuador remained the second-leading supplier of ATPA imports; imports from Ecuador

increased by 59.1 percent in value during 2005 as a result of increased U.S. imports of crude

petroleum, petroleum derivatives, roses, and cut flowers. Petroleum products accounted for

69 percent of U.S. imports under ATPA in 2005 and represented four of the top 25 U.S.

imports under the program. Apparel was the next-largest category of imports under ATPA,

accounting for 13 percent of such imports and seven of the 25 leading imports under ATPA.
79 The 24 countries designated for CBERA benefits are listed in table A-14.

80 See 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. 81 For a more detailed description of the original CBERA, including country and product eligibility,

see USITC, Caribbean Basin Economic Recovery Act: Impact on the United States, Fourteenth Report, 1998,

USITC publication 3234, Sept. 1999. 82 President, “Address before the Permanent Council of the Organization of American States,” Weekly

Compilation of Presidential Documents, Mar. 1, 1982, pp. 217–223. 83 CBTPA was enacted on May 18, 2000 (see Public Law 106-200). 

84 For CBTPA provisions related to textiles and apparel, see “Textile and Apparel-Related Legislation”

in this report. 85 Only watches assembled from parts originating in countries that are not eligible for NTR tariff

treatment were ineligible for duty-free treatment under CBERA. 

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Other leading imports under ATPA in 2005 included copper cathodes, fresh cut flowers,

asparagus, and gold jewelry (table A-17).

Caribbean Basin Economic Recovery Act

In 2005, articles from 24 countries and territories in the Caribbean Basin and Central

America entering the United States free of duty or at reduced duties under CBERA were

valued at $12.3 billion (table 2-9).79 CBERA has been operative since January 1, 1984. The

act, as amended, has no statutory expiration date.80 CBERA is the trade-related component

of the Caribbean Basin Initiative (CBI).81 CBI was launched in 1982 principally to promote

export-led economic growth and economic diversification in the Caribbean Basin region.82

Table 2–9 U.S. imports for consumption from CBERA countries, 2003–05 

Item 2003 2004 2005 

Total imports from CBERA countries (1,000 dollars) 24,499,559 27,555,492 31,814,307 

 Total under CBERA provisions, including CBTPA (1,000 dollars) 10,429,629 10,936,621 12,336,372 

 Total under CBTPA (1,000 dollars) 7,462,064 7,908,041 8,773,023 

 Total under CBERA, excluding CBTPA (1,000 dollars) 2,967,564 3,028,580 3,563,349 

 Total under CBERA/CBTPA as a percentage of total 42.6 39.7 38.8 

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

The United States-Caribbean Basin Trade Partnership Act (CBTPA)83 expanded the coverage

of preferential tariff treatment for several articles previously excluded under the original

CBERA. Notably, the list of newly qualifying articles included certain apparel (discussed

in more detail below), the assembly of which is an important Caribbean Basin industry.84

CBTPA also extended NAFTA-equivalent treatment (that is, rates of duty equivalent to those

accorded to Mexican goods under the same rules of origin applicable under NAFTA) to a

number of other products previously excluded from CBERA, including certain tuna,

petroleum products, certain footwear, and some watches and watch parts.85

On August 2, 2005, President Bush signed implementing legislation for the multiparty free

trade agreement (FTA) with Central America (Costa Rica, El Salvador, Guatemala,

Honduras, and Nicaragua) and the Dominican Republic (CAFTA-DR). When the FTA enters

into force for any of the parties and the United States, that country must cease to be a
86 See USITC, The Impact of the Caribbean Basin Economic Recovery Act: Seventeenth Report

2003–2004, USITC publication 3804, Sept. 2005.

87 Public Law 106-200, Title I, 114 Stat. 251, as amended by the Trade Act of 2002, section 3108,

Trade Benefits Under the African Growth and Opportunity Act (a)(1)(2)(3). 88 Public Law 107-210, Title XXXI, ATPDEA, section 3103 (b)(3)(A)(B)(I).

89 Public Law 106-200, Title II, CBTPA, as amended by section 3107 of Public Law 107-210. 90 U.S. HTS heading 9819.11.09.

91 LDBCs for 2005 were: Angola, Benin, Burkina Faso, Cape Verde, Chad, Congo (DROC), Djibouti,

Ethiopia, Gambia, Guinea, Guinea-Bissau, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger,

Rwanda, São Tomé and Principe, Sierra Leone, Tanzania, Uganda, and Zambia. See the discussion of AGOA

above. The special rule for LDBCs is to extend until September 2007. 92 These data are official statistics of the U.S. Department of Commerce, and are available on the

OTEXA web site at http://otexa.ita.doc.gov. 

2-20

designated beneficiary country under CBERA and CBTPA as well as GSP.86 In 2005, the

CAFTA-DR countries supplied 72.1 percent of U.S. imports under CBERA. In the same

year, Trinidad and Tobago, Haiti, and Jamaica supplied 92.6 percent of U.S. imports under

CBERA from non-CAFTA-DR countries.

Table 2-9 shows U.S. imports under CBERA from 2003 to 2005. After U.S. imports entering

under CBERA provisions increased by only 4.9 percent in 2004, such imports increased by

12.8 percent in 2005. U.S. imports under CBERA (including CBTPA) provisions amounted

to $10.4 billion in 2003, $10.9 billion in 2004, and $12.3 billion in 2005. Notably, during

this three-year period, imports under CBERA (including CBTPA) accounted for a declining

share of all U.S. imports from CBERA countries: 42.6 percent in 2003, 39.7 percent in 2004,

and 38.8 percent in 2005. 

Table A-18 shows U.S. imports entered under CBERA provisions from each of the CBERA

countries from 2003 to 2005. Trinidad and Tobago became the leading supplier of U.S.

imports under CBERA in 2005, displacing the Dominican Republic. Table A-19 shows the

leading 25 U.S. imports entered under CBERA provisions from 2003 to 2005. Apparel

products and mineral fuels continued to dominate the list in 2005. Twelve of the leading

products were knitted and non-knitted apparel; five were mineral fuels; and the remaining

eight were products that had already qualified for benefits under the original CBERA before

the implementation of CBTPA—methanol, cigars, pineapples, articles of jewelry,

undenatured ethyl alcohol, raw sugar, polystyrene, and cantaloupes.

Textile and Apparel Imports under AGOA, ATPDEA, and CBTPA

The United States grants unlimited duty-free treatment to imports of textiles and apparel

made from U.S. yarns and fabrics in eligible beneficiary countries under AGOA,87

ATPDEA,88 and CBTPA.89 These programs also extend duty-free entry to apparel made in

the beneficiary countries from “regional fabrics,”90 subject to a ceiling, or “cap,” on the

quantity of such apparel that can enter free of duty under each program. In addition, AGOA

permits apparel made in lesser developed beneficiary countries (LDBCs)91 from fabrics made

in countries other than the United States or those in SSA to enter free of duty under the

AGOA regional fabric cap (the “third-country fabric” provision). Although Mauritius is not

an LDBC, it was granted access to this LDBC “third-country fabric” provision for 2005,

which expired on December 31, 2004. In 2005, U.S. imports of textiles and apparel eligible

for duty-free entry totaled approximately $9.7 billion under CBTPA, $1.4 billion under

AGOA, and $1.3 billion under ATPDEA.92
93 The ATC came into effect with the WTO Uruguay Round Agreements in 1995 and superseded the

Multifiber Arrangement, an arrangement negotiated under the auspices of the General Agreement on Tariffs and

Trade (GATT 1947) that governed world trade in textiles and apparel and permitted importing countries to

establish quotas on such goods outside normal GATT rules from 1974–94. The ATC obligated the United States,

the EU, and Canada to phase out their import quotas on textiles and apparel from WTO member countries and

“integrate” their trade in such goods into the GATT in four stages over 10 years ending Jan. 1, 2005. Since then,

WTO member countries have had quota-free access to the textile and apparel markets of the major importing

countries, which may not establish any new quotas on such goods except as provided under regular GATT rules. 94 In May 2006, the United States and Vietnam reached in principle a bilateral market access agreement

that aims to help clear the way for Vietnam’s WTO accession. For further information, see USTR, “Vietnam’s

Accession to the WTO,” fact sheet, May 15, 2006. 95 The non-WTO countries are subject to quotas imposed by the President under section 204 of the

Agricultural Act of 1956 (7 U.S.C. 1854), which authorizes the President to enter into agreements with foreign

governments to limit the export of textiles and apparel to the United States, and the importation of such goods

into the United States, and to issue regulations to carry out such agreements. 96 The data in this section were compiled by USITC from official statistics of the U.S. Department of

Commerce, OTEXA. Most of the data included in this section are available on the OTEXA website,

http://otexa.ita.doc.gov. The percentage figures included in this section are based on unrounded SMEs. 97 No other country achieved the same level of growth as China in its exports to the U.S. market, either

in absolute terms or in terms of market share.

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Textile and apparel developments in 2005 are discussed more broadly in the following

section.

Textile and Apparel Developments in 2005

On January 1, 2005, the United States eliminated quotas on U.S. imports of textiles and

apparel from 39 WTO countries, as required under the WTO Agreement on Textiles and

Clothing (ATC).93 The United States continues to maintain import quotas on three non-WTO

nations—Belarus, Ukraine, and Vietnam94—which will be eligible for quota liberalization

upon accession to the WTO.95 Together, the three countries accounted for 3 percent ($3

billion) of total U.S. imports of textiles and apparel in 2005. U.S. imports from China

increased rapidly in the post-quota market of 2005, initially leading to the establishment of

safeguards (quotas) on selected Chinese textile and apparel articles, as provided for under

China’s WTO Protocol of Accession, and subsequently to the negotiation of a three-year

agreement to limit U.S. imports of specific textile and apparel products from China (as

discussed later in this chapter).

U.S. Textile and Apparel Imports in 200596

U.S. imports of textiles and apparel in 2005 grew by 8.3 percent in quantity terms over the

2004 level to reach 50.8 billion square meter equivalent (SMEs) (valued at $89.2 billion).

The 8.3-percent increase in 2005 was smaller than the annual average increase (14 percent)

for the preceding three-year period (2001-04). Although trade did not increase as rapidly as

in prior years, shifts occurred among the many textile and apparel suppliers. The removal of

quotas opened up the U.S. market for other suppliers previously constrained by quota. U.S.

importers were able to consolidate their sourcing among fewer manufacturers, particularly

those that could best meet their needs in terms of such factors as cost, quality, service, and

lead time, without regard to quota availability.

The principal beneficiary of the phase-out of quotas and resulting trade shift was China,97

which was subject to binding quotas for textile and apparel articles still covered by the ATC

in 2004. U.S. textile and apparel imports from China rose by 43.8 percent to 16.8 billion
2-22

SMEs ($22.4 billion) in 2005 (table 2-10). The rate of growth in China’s shipments likely

would have been even higher had it not been for a series of safeguard actions imposed by the

United States on selected Chinese textile and apparel articles during 2005 (as discussed

Table 2–10 U.S. imports of textiles and apparel in 2005 by quantity, percentage change in imports 2004–05, and

share of total U.S. imports of textiles and apparel, for major U.S. suppliers, selected regional groups, and the world

Country or region U.S. imports 2005

Change in imports

2004–05

Share of total U.S. textile and

apparel imports

2004 2005

Million SMEsa ------------------------------Percent------------------------------

World 50,839 8.3

China 16,763 43.8 24.8 33.0

Mexico 3,883 - 5.3 8.7 7.6

Pakistan 3,291 10.8 6.3 6.5

Canada 3,009 -8.0 7.0 5.9

India 2,335 22.0 4.1 4.6

Korea 2,028 -11.9 4.9 4.0

Indonesia 1,354 6.2 2.7 2.7

Bangladesh 1,314 18.5 2.4 2.6

Honduras 1,262 4.4 2.6 2.5

Taiwan 1,083 -16.8 2.8 2.1

Thailand 1,052 -5.6 2.4 2.1

Vietnam 950 5.0 1.9 1.9

El Salvador 897 0.2 1.9 1.8

Southeast Asian countriesb 5,140 0.1 11.0 10.1

Caribbean countriesb 4,169 0.03 8.9 8.2

Sub-Saharan African countriesd 390 -15.6 1.0 0.8

Andean countriese 278 -5.0 0.6 0.5

Source: U.S. Department of Commerce, Office of Textiles and Apparel, Major Shippers Report, available at

http://www.otexa.ita.doc.gov.

a Square meter equivalents.

b Southeast Asian countries include ASEAN members Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar,

Philippines, Thailand, Singapore, and Vietnam. c Caribbean countries include CBI participants Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, British

Virgin Islands, Costa Rica, Dominica, Dominican Republic, El Salvador, Grenada, Guatemala, Guyana, Haiti,

Honduras, Jamaica, Montserrat, Netherlands Antilles, Nicaragua, Panama, St. Kitts and Nevis, St. Lucia, St. Vincent

and the Grenadines, Trinidad and Tobago. d Sub-Saharan African countries included are Angola; Benin; Botswana; Burkina Faso; Burundi; Cameroon; Cape

Verde; Chad; Republic of Congo; Democratic Republic of Congo; Djibouti; Ethiopia; Gabon; The Gambia; Ghana;

Guinea; Guinea-Bissau; Kenya; Lesotho; Madagascar; Malawi; Mali; Mauritius; Mozambique; Namibia; Niger;

Nigeria; Rwanda; Sao Tome and Principe; Senegal; Seychelles; Sierra Leone; South Africa; Swaziland; Tanzania;

Uganda; Zambia. e Andean countries are Bolivia, Colombia, Ecuador, and Peru.

later in this chapter). Even with these actions in place, China expanded its share of total U.S.

textile and apparel imports by quantity to 33.0 percent (16.8 million SMEs) in 2005, from

24.8 percent (11.7 million SMEs) in 2004, and from 6.7 percent (2.2 million SMEs) in 2001.

The removal of U.S. import quotas opened up the domestic market for other textile and

apparel exporting countries previously constrained by quota, particularly India, Pakistan, and

Bangladesh, which rank among the principal low-cost sourcing alternatives to China.

However, the gain in U.S. market share by these South Asian countries in 2005 was small

in relation to that achieved by China. U.S. imports of textiles and apparel from India,

Pakistan, and Bangladesh together increased 15.8 percent to 6.9 billion SMEs ($10.0 billion),
98 Emerging Textiles, “Losing Out to Asia in Critical Apparel Categories, Mexico Failing to Take

Advantage of China Restrictions,” http://www.emergingtextiles.com, (accessed Feb. 9, 2006). 99 CBI is the collective term for the CBERA and CBTPA trade preference programs. 100 CBTPA is discussed in more detail above. 101 ATPDEA is discussed in more detail above. 102 AGOA is discussed in more detail above. 103 The U.S.-Vietnam Bilateral Textile Agreement has been extended until Dec. 31, 2006. See

“Extension of U.S.-Vietnam Bilateral Textile Agreement,” U.S. Department of Commerce, ITA, OTEXA,

Textile and Apparel Agreements, http://web.ita.doc.gov/otexa/otexagre.nsf. 104 Embassy of the United States, Hanoi-Vietnam, “Trade Relations, Vietnam-U.S. Textile Agreement

Summary.” 105 Eight of the quotas on apparel from Vietnam were filled by 80 percent or more (binding) in 2005.

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but their combined share of the U.S. market increased by just one percentage point. U.S.

imports of textiles and apparel from Southeast Asian countries showed mixed results in

2005, with those from Indonesia, Cambodia, and Vietnam together increasing by 6.7 percent

to 3.0 billion SMEs ($7.7 billion), and those from Thailand, the Philippines, Malaysia, and

Singapore declining by 7.8 percent to 2.1 billion SMEs ($4.9 billion).

U.S. imports of textiles and apparel from NAFTA partners Canada and Mexico fell by 6.5

percent to 6.9 billion SMEs ($10.1 billion). Mexico reportedly is not cost competitive in the

U.S. apparel market with China or other low-cost Asian suppliers, despite its preferential

access and proximity to the U.S. market.98 U.S. imports of textiles and apparel from other

countries in the Western Hemisphere that benefit from U.S. trade preferences showed either

negligible growth (CBI99 countries) or a decline (Andean countries) in 2005. Imports from

the Caribbean Basin countries rose by less than 0.05 percent to 4.2 billion SMEs ($9.7

billion), of which 71.1 percent, or 3.0 billion SMEs ($6.6 billion), entered duty-free under

CBTPA.100 U.S. imports from the Andean countries fell 5.0 percent by quantity to 278.5

million SMEs, but rose 7.8 percent by value to $1.5 billion. Of these imports, 217.2 million

SMEs ($1.3 billion) entered under ATPDEA,101 and consisted mostly of apparel made from

regional fabrics (184.4 million SMEs valued at $1.1 billion).

U.S. imports from SSA countries fell by 15.6 percent to 390.4 million SMEs ($1.5 billion),

of which 93.8 percent, or 365.2 million SMEs ($1.4 billion), entered duty free under

AGOA.102 Approximately 83.6 percent of U.S. apparel imports from SSA countries (or 325.5

million SMEs ($1.2 billion)) consisted of apparel articles that were made in LDBCs under

the “third-country fabric” provision (described above). 

Vietnam’s accession to the WTO was pending during 2005 and it remained one of three

countries still subject to U.S. import quotas on textiles and apparel. U.S. imports from

Vietnam slowed somewhat following the implementation of the U.S.-Vietnam bilateral

textile agreement on July 17, 2003,103 which established quotas for the first time on 25

product categories.104 Vietnam’s shipments of textiles and apparel to the United States

increased from 905 million SMEs ($2.7 billion) in 2004 to 950 million SMEs ($2.9 billion)

in 2005. Approximately 54 percent of the volume of these imports from Vietnam entered the

United States under quota in 2005.105
106 “Memorandum of Understanding Between the Governments of the United States of America and

the People’s Republic of China Concerning Trade in Textile and Apparel Products,” Nov. 8, 2005,

http://www.ustr.gov/assets/World_Regions/North_Asia/China/asset_upload_file91_8344.pdf. 107 Under the textile safeguard provision in China’s accession agreement to the WTO, the United States

and other WTO countries may impose temporary quotas on imports of Chinese textiles and apparel under certain

conditions. The textile safeguard provision in China’s WTO accession agreement permits a WTO country,

following consultations, to impose quotas on imports of textiles and apparel from China if it finds that imports

of textiles and apparel from China are, owing to market disruption, threatening to impede the orderly

development of trade in these goods. The safeguard provision requires China to hold its shipments to a level no

greater than 7.5 percent (6 percent for wool goods) above the amount entered in the first 12 months of the most

recent 14 months preceding the request for consultations. The safeguards cannot remain in effect beyond one

year, without reapplication, unless both countries agree. Information on the China textile safeguard is from the

WTO, Ministerial Conference, Doha, Qatar, Report of the Working Party on the Accession of China,

WTOMIN(01)3, Nov. 10, 2001, para. 242, pp. 46–47. 108 Based on data of the U.S. Department of Commerce, Office of Textiles and Apparel. For further

information on China textile safeguard actions filed with CITA, see “Requests for China Textile Safeguard

Action Filed with the Committee for the Implementation of Textile Agreements (CITA).” 109 Including two petitions filed in 2004, for which decisions had been delayed by CITA, pending

negotiation of a comprehensive agreement. 110 Based on data of the U.S. Department of Commerce, OTEXA. 111 The electronic visa information system (ELVIS) that was used under the ATC to prevent shipments

of textile goods over the quota limits was discontinued for WTO members on January 1, 2005. Hence, export

shipments from China under the safeguards were allowed entry into the United States on a first-come basis,

resulting in numerous overshipments. For example, cotton knit shirts entered the United States at an average rate

of 120,545 dozen per day during the 42 days it took to fill the quota allocated for 223 days. 112 “Core products” are defined as cotton and manmade-fiber knit shirts, woven shirts, trousers,

brassieres, and underwear. 113 Ten of the 21 limits had been subject to safeguards in 2005, seven of the limits had been under

consideration for implementation by CITA in 2005, and four others which were neither under consideration nor

implemented in 2005.

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U.S.-China Textile Agreement

On November 8, 2005, the United States and China signed a memorandum of understanding

(MOU)106 that established levels, or quotas, on U.S. imports of selected textile and apparel

products from China beginning on January 1, 2006, and extending through December 2008,

at which time the right of the United States to invoke safeguards107 expires under China’s

WTO membership accession agreement. The MOU supersedes the safeguard actions

undertaken by the United States earlier in 2005 in response to rising imports from China.

Between May and August 2005, the United States took 10 safeguard actions under the textile

safeguard provision in China’s WTO accession agreement on basic apparel items such as

shirts, blouses, trousers, and underwear, which had been highly constrained under the ATC

and which accounted for approximately 34 percent of total volume of U.S. textile and

apparel imports from China in 2005.108 The United States also considered requests from

interested parties for safeguards on other Chinese textile and apparel products. In total, these

requests for safeguards,109 in addition to the existing safeguards in place, accounted for 74

percent of the volume of U.S. imports of textiles and apparel from China in 2005.110 Eight

of the 10 safeguard actions taken during 2005 resulted in embargoes, preventing any further

imports of these products through December 31, 2005, when the safeguards expired. U.S.

importers that had placed orders prior to the safeguard actions were unable to receive

embargoed goods until after this date.111

The MOU with China established 21 quotas covering 34 categories of textile and apparel

products, including certain “core products”112 that had been subject to the above-referenced

safeguard limits in 2005.113 These 34 product categories accounted for nearly 40 percent of
114 Estimated by USITC staff based on data of the U.S. Department of Commerce, OTEXA. 115 USTR, “Benefits from Establishing Quotas on Certain Chinese Apparel Exports to the United

States,” fact sheet, Nov. 8, 2005; and National Council of Textile Organizations, “NCTO Applauds New 3-Year

Bilateral with China,” Nov. 8, 2005. 116 Renewal petitions for these 10 safeguards were filed with CITA during 2005. 117 Through an ELVIS transmission, an exporting country would in essence guarantee that a shipment

had been allocated quota. The United States, in turn, would not allow imports of goods subject to quota from a

country without an ELVIS transmission. ELVIS was discontinued for WTO members on Jan. 1, 2005. 

2-25

the volume of U.S. imports of textiles and apparel from China in 2005.114 According to U.S.

government and industry officials, the 2006 agreed levels for the core products are more

restrictive than the limits that could have been imposed under the China textile safeguard

provision for 2006.115 The 10 safeguard actions would have expired at the end of 2005,

allowing imports to enter free of restraint at the beginning of 2006, until new safeguard

measures were taken pursuant to new applications.116 Nevertheless, the 2006 quota levels for

most core products are substantially higher than the 2005 annualized safeguard levels and

the 2004 quota levels under the ATC (table 2-11).

Table 2–11 U.S. imports of selected apparel products, by quota and safeguard levels, 2004–05

(Million dozens)

Cotton and

manmade fiber

men’s and boy’s

shirts, non-knit Cotton trousers

Cotton and

manmade fiber

underwear

Manmade

fiber knit shirts

Manmade fiber

trousers

2004 quota level 

 with ATCa 2.3 2.4 5.3 2.7 3.0

2005 annualized

 safeguard level 3.7 7.1 8.3 4.7 4.4

2005 MOU agreed

 levelb 6.7 19.7 18.9 8.1 8.0

Source: Compiled by USITC staff based on data from U.S. Customs and Border Protection’s Textile Status Reports,

http://www.customs.gov/xp/cgov/import/textiles_and_quotas/textile_status_report/.

a

WTO Agreement on Textiles and Clothing (ATC). On Jan. 1, 2005, the United States eliminated quotas on U.S.

imports of textiles and apparel from 39 WTO countries, as required under the ATC. b

On Nov. 8, 2005, the United States and China signed a MOU that established levels, or quotas, on U.S. imports of

selected textile and apparel products from China beginning in Jan. 1, 2006, and extending through December 2008.

In addition, the MOU provided higher annual growth rates (12.5 to 16 percent in 2007, and

15 to 17 percent in 2008) than were allowed under the safeguard provision (7.5 percent). The

MOU also reestablished an electronic visa information system (ELVIS) that will create a

more predictable trading environment than would otherwise exist in the absence of the visa

system under the safeguards in 2005.117 As part of the agreement, the United States also

agreed to act with restraint in future applications of the WTO accession safeguard provision,

and not to request further consultations for safeguards on the products covered under the

agreement.
118 See General Note 3(a)(v) of the HTS. In addition, except as noted, information in this section is from

USTR, “United States, Egypt and Israel to Launch Historic Trade Partnership,” press release, Dec. 10, 2004,

“Fostering Trade in the Middle East: An Israel - Egypt Trade Partnership,” fact sheet, Dec. 14, 2004; and “USTR

Rob Portman Announces Additional Efforts to Support Trade and Development in the Middle East,” fact sheet,

Oct. 31, 2005. For more background on the QIZ agreement with Egypt and Jordan, see USITC, The Year in

Trade 2004, pp. 2-35 to 2-36.

119 This Congressional authority was part of the 1985 United States-Israel Free Trade Area

Implementation Act, amended. Public Law 99-47, approved June 11, 1985, 19 U.S.C. 2112, as amended by

Public Law 104-234, approved Oct. 2, 1996. Presidential Proclamation 6955 of Nov. 13, 1996,” “To Provide

Duty-Free Treatment of Products of the West Bank and the Gaza Strip and Qualifying Industrial Zones,” Federal

Register, Nov. 18, 1996 (61 F.R. 58759). 120 The U.S.-Jordan FTA entered into force in 2001. 121 USTR, “USTR Rob Portman Announces Additional Efforts to Support Trade and Development in

the Middle East,” fact sheet, Oct. 31, 2005. 

2-26

Qualifying Industrial Zones Program for Israel, Egypt, and Jordan118

Under the United States-Israel Free Trade Area Implementation Act, as amended, Congress

authorized the President to proclaim duty-free treatment for articles made in “qualifying

industrial zones” (QIZs) in Jordan and Egypt, provided that the products contain inputs from

Israel.119 This program was designed to foster economic cooperation, closer ties, and peaceful

relations between Israel and its QIZ partners Jordan and Egypt.

Under the U.S. law, Israel, Egypt, and Jordan may establish QIZs, which must include

portions of Israel and Jordan or Israel and Egypt, although the geographical areas do not

have to be contiguous. In general, for a QIZ article to enter the United States free of duty,

the article must be produced in and imported directly from the QIZ, and the value added in

the QIZ must be no less than 35 percent of the total value of the article. The 35 percent

minimum content requirement can include costs incurred in Israel, Egypt, or the United

States for QIZs in Egypt, and can include costs incurred in Israel, Jordan, or the United

States for QIZs in Jordan. Separate agreements between Israel and its QIZ partners require

that the QIZ articles contain minimum Israeli content; specifically, Israeli content must

account for at least 11.7 percent of the value of the article made in the Egyptian QIZs and

at least 8 percent for an article made in the Jordanian QIZs.

Since the implementation of the program in 1996, USTR has designated 13 QIZs in

Jordan.120 USTR designated three in Egypt in December 2004 (the Greater Cairo QIZ, the

Alexandria QIZ, and the Suez Canal Zone QIZ). The three QIZs in Egypt became

operational in 2005, and a fourth Egyptian QIZ (the Central Delta QIZ) was designated for

approval by USTR in October 2005, along with approval for expansion of two of the existing

Egyptian QIZs (the Greater Cairo QIZ and Suez Canal Zone QIZ).121

After the substantial increase in QIZ imports from Jordan from $563 million in 2003 to $926

million in 2004, these imports leveled off in 2005 to $944 million. U.S. imports of textiles

and apparel under the U.S.-Jordan FTA increased to $127 million in 2005 from $109,000 in

2004. Virtually all of the imports entering under the U.S.-Jordan FTA and from Jordan’s QIZ

in 2005 continued to consist of apparel. U.S. textile and apparel imports from Egypt totaled

$614 million in 2005, up from $564 million in 2004 and from $533 million in 2003. Imports

from Egypt’s QIZs totaled $252 million in 2005, with most of these imports consisting of

apparel.
1

 On May 15, 2006, the chairman of the Trade Negotiating Committee (TNC) reported that participants

had been unable to reach agreement on negotiating modalities by the end of April 2006—the time frame set at

the Hong Kong ministerial—for agriculture and nonagricultural market access. Nonetheless, he stated that

negotiations would continue. WTO, “Lamy Urges Negotiators to Find ‘Second Wind’ in Trade Talks,” press

release, May 15, 2006. 2

 Negotiations launched under several mandates from the Uruguay Round Agreements can be found

in WTO, TNC, Final Act Embodying the results of the Uruguay Round of Multilateral Trade Negotiations,

Marrakesh, Apr. 15, 1994. Negotiations launched under the DDA can be found in WTO, “Ministerial

Conference—Fourth Session—Doha, 9–14 November 2001—Ministerial Declaration—Adopted on 14

November 2001,” WT/MIN(01)/DEC/1, Nov. 20, 2001. 3

 Also called the “July 2004 Package” despite its adoption on Aug. 1, 2004. WTO, “Doha Work

Programme—Decision Adopted by the General Council on 1 August 2004,” WT/L/579, Aug. 2, 2004. 4

 For further detail, see USITC, “Chapter 3—Selected Trade Developments in the WTO, OECD, and

APEC,” The Year in Trade 2004—Operation of the Trade Agreements Program, 56th report, July 2005, USITC

(continued...)

3-1

CHAPTER 3

Selected Trade Developments in the WTO,

OECD, and APEC

World Trade Organization

Doha Trade Negotiations and 2005 Hong Kong Ministerial

The Doha Round multilateral trade negotiations continued in 2005. Negotiations centered

on setting specific terms and structures (“negotiating modalities”) for individual negotiating

groups in time for the WTO Sixth Ministerial Conference, which was held December 13–18,

2005, in Hong Kong, China. The aim of the Hong Kong ministerial was to prepare for final

negotiations to conclude the Round by year-end 2006, and prepare the agreements for

adoption by participants in early 2007.1

Background

The Doha Round was launched in early 2000 for certain subjects set out in the 1986–1994

Uruguay Round Agreements, and then more broadly in November 2001 for additional

subjects under the Doha Development Agenda (DDA).2

 Under the 2001 Doha ministerial

declaration, trade ministers were to take stock of progress in the negotiations at the WTO

Fifth Ministerial Conference held in Cancun, Mexico in September 2003. The Cancun

ministerial was to be followed by setting negotiating modalities so that the Doha Round

could conclude by January 1, 2005.

Ministers at Cancun did not agree on negotiating modalities for key subjects such as

agriculture, nonagricultural market access, and other issues, and left the conference without

a consensus from which negotiations could advance. Efforts advanced in 2004 toward

resolving issues raised at the Cancun ministerial when the WTO General Council adopted

a decision in August 2004 (the 2004 Framework Decision3

) that set out the range of issues

under negotiation within a single framework.4

 Difficulty in setting negotiating modalities5
4

 (...continued)

publication 3779, pp. 3-1 to 3-6. 5

 Negotiating modalities are agreed means on how to proceed with negotiations or approaches that

outline how to to exchange specific commitments through such means as formula reduction, request/offer

negotiations, mutual tariff elimination (“zero-for-zero” negotiations), etc. 6

 These meetings included the November 2004 APEC Ministerial Meeting in Santiago, Chile; the

January 2005 World Economic Forum, in Davos, Switzerland; and the so-called mini-ministerial of trade

ministers meeting informally in Nairobi, Kenya in March 2005. 7

 U.S. Department of State, “Kenyan-Hosted Informal Meeting of Trade Ministers on the Doha

Round,” prepared by U.S. Secretary of State, Washington D.C., message reference No. 41121, Mar. 9, 2005. 8

 WTO, “WTO Members Choose Lamy as Organization’s 5th Director-General,” press release,

Press/407, May 26, 2005. 9

 WTO, “Trade Negotiations Committee—Lamy Says the Engines of Negotiations Are ‘Buzzing’

Again,” news release, Oct. 13, 2005. 10 WTO, “Informal Meeting at the Level of Heads of Delegation—Chairman’s Remarks,” JOB(05)/274,

Nov. 3, 2005. 11 WTO, “Ministerial Declaration—Doha Work Programme—Adopted on 18 December 2005,”

Ministerial Conference—Sixth Session—Hong Kong, 13–18 December 2005, WT/MIN(05)/DEC, Dec. 22, 2005.

3-2

for agriculture and nonagricultural market access hindered progress not only in these areas,

but also in other areas that look to decisions in these core areas to motivate negotiating offers

for other subjects. Without full negotiating modalities, negotiations following the 2004

Framework Decision lacked drive and, as a result, negotiators missed the January 2005

deadline for the conclusion of the Doha Round trade negotiations. Progress in advancing the

negotiations was further impeded by the need to select a new WTO director-general in

September 2005. That position also includes the responsibility of chairing the Trade

Negotiating Committee (TNC), which oversees the Doha Round trade negotiations.

2005 “First Approximation” Efforts

Following adoption of the 2004 Framework Decision, negotiators continued to work toward

finalizing modalities. In late 2004 and into 2005, trade and economic ministers met in

different forums to discuss next steps in the DDA.6

 Participants sought what was called a

“first approximation” of elements for each negotiating area—an initial set of texts to be

ready by July 2005 to be developed further into draft text in time for the Hong Kong

ministerial.7

 Lack of progress on this first approximation text resulted in little substantive

progress in the negotiations.

Pascal Lamy was selected in May 2005 as the fifth WTO director-general, and took up the

post on September 1, 2005.8

 In October 2005, he announced steps to be taken by the time of

the Hong Kong ministerial so as to complete the Doha Round negotiations by December 31,

2006.9

 In November 2005, Lamy reported to member delegations on the progress made in

October as an indication of what to expect at Hong Kong regarding the status of

negotiations.10

WTO Sixth Ministerial Conference at Hong Kong

The Sixth WTO Ministerial Conference was held December 13–18, 2005, in Hong Kong.

The ministerial declaration11 issued at the end of the conference summarized the progress to

date in the negotiations, including core subjects (agriculture, nonagricultural market access,

and services); trade disciplines (trade rules, intellectual property, trade and environment,

trade facilitation, and dispute-settlement clarifications); a wide array of special and
12 WTO, “Summary of 18 December 2005—Day 6: Ministers Agree on Declaration that ‘Puts Round

Back on Track,’” The Sixth WTO Ministerial Conference, Day-by-Day, http://www.wto.org. 13 Ibid.

14 WTO, “Negotiations on Agriculture,” TN/AG/21, Nov. 28, 2005. 15 USTR, “U.S. Proposal for Bold Reform in Global Agriculture Trade,” press release, Oct. 10, 2005. 16 EU Trade Commissioner Peter Mandelson, “Statement of EU Conditional Negotiating

Proposals—with Explanatory Annotations,” press release, Mar. 15, 2006. 17 The aggregate measurement of support calculates how much support to farmers is provided by

domestic policies that have a direct effect on production and trade, measured in terms of the 1986-88 base years.

See WTO, “Understanding the WTO: the Agreements—Agriculture: Fairer Markets for Farmers,”

http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm3_e.htm#domestic (accessed Mar. 15, 2006). 18 So-called blue box payments are certain direct payments to farmers where the farmers are required

to limit production. See WTO, “Understanding the WTO: the Agreements—Agriculture.” 19 WTO, “Ministerial Declaration,” WT/MIN(05)/DEC, Dec. 22, 2005, par. 7. 20 Ibid., par. 6.

3-3

differential treatment issues; and institutional matters (recently acceded members and future

accessions). Table 3–1 shows the table of contents and annexes of the Hong Kong ministerial

declaration.

Ministers considered overall progress at Hong Kong to be modest, but nonetheless agreed

that the conference provided a workable basis from which to relaunch negotiations during

2006.12 Ministers highlighted progress regarding the subjects of agricultural export subsidies

and duty-free and quota-free market access for products originating in the least developed

countries (LDCs).13

Agriculture14

The United States,15 and later the European Communities (EC),16 presented revised

agricultural offers, allowing negotiating positions to converge more substantively in the runup to the ministerial. Participants agreed that the overall reduction package for countries

involved would consist of (1) reductions in a country’s “aggregate measurement of support”

(AMS),17 (2) reductions in “blue box” payments,18 and (3) de minimis reductions in

agricultural import tariffs. Discussion continues on whether or not to adopt a ceiling cap of,

for example, 5 percent on blue box payments. This overall reduction package would be

considered a member’s minimum reduction—not the maximum or cap—according to the

2004 Framework Decision.

On agricultural market access, participants’ positions also began to converge regarding a

formula consisting of four bands to be used to reduce agricultural tariffs. Progress was

achieved on how to convert specific tariffs and tariff-rate quotas (TRQs) into ad valorem

tariff equivalents so they could be included in the tariff reduction formula. Progress also was

made regarding “special products” and a “special safeguard mechanism” for certain products

declared important by developing countries.19

On export competition, the EC faced widespread pressure during 2005 to improve its

agriculture offer. Developing countries were particularly concerned about an improved EC

offer. The EC proposed to eliminate agricultural export subsidies by a certain date

(nominally set at the end of 2013).20
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Table 3–1 Hong Kong ministerial declaration, contents and annexes

Contents

Agriculture

Market access

Export support

Domestic support

Cotton

Other elements

Annex A

Nonagricultural market access

Nonlinear formula

Tariffication ad valorem equivalents

Nontariff barriers

Balance of agricultural and nonagricultural product

 concessions

Annex B

Services

Trade rules

Intellectual property

Environment

Trade facilitation

Dispute settlement negotiations 

Special and differential treatment

Implementation

Trips and public health

Small economies

Trade, debt, and finance

Trade and transfer of technology

Intellectual property under the WTO and UN

 Convention on Biological Diversity

Trips non-violation and situation complaints

E-commerce

Least developed countries

Integrated framework

Technical cooperation

Commodity issues

Coherence

Aid for trade

Institutional subjects

Recently-acceded members

Accessions

Annexes

Annex A—Agriculture

Market access

Formula reduction

Sensitive products

Special products

Special safeguard mechanism

Least developed countries

Cotton

Export competition

Domestic support reduction

Formula reduction

De minimis reduction

Blue box reduction

Ams reduction

Green box reduction

Annex B—Market access for non-agricultural products

Formula

Developing country implementation flexibilities

Unbound tariffs

Other formula elements

Other developing country/least developed country

 flexibilities

Sectoral tariff elimination

Least developed country market access

New members

Nontariff barriers

Nonreciprocal preferences

Environmental goods

Other NAMA elements

Chair conclusion

Annex C—Services

Objectives

Approaches

Timelines

Review of progress

Annex D—Rules

Antidumping, and subsidies and countervailing

 measures, including fisheries subsidies

Regional trade agreements

Annex E—Trade facilitation

Annex F—Special and differential treatment

Source: WTO, "Ministerial Declaration—Doha Work Programme—Adopted on 18 December 2005," Ministerial

Conference—Sixth Session—Hong Kong, 13–18 December 2005, WT/MIN(05)/DEC, Dec. 22, 2005.
21 A linear formula cuts tariffs over a period of time by a simple percentage reduction every year

beginning from some base period—such as agreement by all participants to reduce tariffs by 50 percent over 10

years at a rate of 5 percent each year, based on tariff levels as existed in, for example, the first year. Tariff bands

can refine this reduction by distinguishing among participants—such as governments that make few, those that

make more, and others that give the most in domestic support payments to their farmers (as measured by AMS).

Thus, negotiators might agree that governments in band 1 with an AMS from 0 to 10 percent, for example, would

be required to make no tariff reductions under the formula; those in band 2 with an AMS from 11 to 50 percent

would reduce their tariffs by 25 percent; and those in band 3 with an AMS greater than 50 percent would reduce

their tariffs by 50 percent, over some agreed implementation period, based on some agreed base period. 22 WTO, “Ministerial Declaration,” WT/MIN(05)/DEC, Dec. 22, 2005, par. 5. 23 Ibid., par. 11-12.

24 Ibid., par. 10.

25 Preference erosion—the decline in a tariff’s margin of preference as tariffs are reduced overall under

the DDA—has been a notable concern of the developing countries in Africa, the Caribbean, and the Pacific Rim

that currently receive market access preferences for their agricultural exports to developed country markets. 26 WTO, “Negotiating Group on Market Access,” TN/MA/16, Nov. 24, 2005. 27 WTO, “Ministerial Declaration,” WT/MIN(05)/DEC, Dec. 22, 2005, par. 13-24.

3-5

On the issue of domestic support, participants moved toward use of a linear formula21

consisting of three bands to be used to reduce agricultural production subsidies. A working

agreement was reached at Hong Kong that EC domestic support payments would be in the

top band where the greatest reduction was to take place, payments by the United States and

Japan would fall into the middle band, and other developed countries (and any developing

countries with AMS calculations) would be placed in the lowest band with the least

reduction in domestic subsidy payments.22

Participants agreed that domestic support for cotton would be reduced more and faster than

subsidy cuts under the domestic support formula. As the ministerial approached, discussions

also were underway about a possible aid mechanism to provide assistance for income

declines, transfers of technology, and measures to increase efficiency in the cotton sector.

This assistance would focus on cotton exporters in developing countries and LDCs—in

particular, Benin, Burkina Faso, Chad, and Mali. These four LDCs were the first to raise the

issue in the WTO about cotton production subsidies paid by industrialized countries.

Participants agreed that the WTO director-general would present a report to the General

Council on measures to be taken in the cotton sector by December 31, 2006.23

Participants agreed to establish full modalities in the agriculture negotiations in early 2006,

and to submit comprehensive draft schedules by July 31, 2006.24 Other topics discussed

included the treatment of tropical products, possible assistance with crop substitution to help

replace illegal crops such as coca or opium poppy, and mitigation of “preference erosion”

for developing countries.25 The participants also set out additional details of elements in the

agriculture negotiations in “Annex A—Agriculture” (see table 3-1).

Nonagricultural Market Access26

Participants in the Negotiating Group on Nonagricultural Market Access consolidated gains

made in discussions since the 2004 Framework Decision. Concerning the tariff reduction

formula for industrial products, participants largely agreed that a nonlinear formula would

be used.27 For bound tariffs, formula reductions would start from fully implemented tariff

rates agreed under the Uruguay Round Agreements. For unbound tariffs, formula reductions

would start from a level twice the unbound tariff rate in a base year to be agreed, as specified

in the 2004 Framework Decision. As discussed below, developing countries voiced concerns

at Hong Kong that special and differential treatment provisions—preference erosion in
28 WTO, “Summary of 17 December 2005—Day 5: Revised Draft Circulated, Ministers Comment.” 29 WTO, “Ministerial Declaration,” WT/MIN(05)/DEC, Dec. 22, 2005, par. 23. 30 WTO, “Special Session for the Council on Trade in Services,” TN/S/23, Nov. 28, 2005. 31 WTO, “Informal Meeting at the Level of Heads of Delegation—Chairman’s Remarks,” JOB(05)/274,

Nov. 3, 2005. 32 Ibid.

33 WTO, “Summary of 17 December 2005—Day 5.”

34 WTO, “Summary of 15 December 2005—Day 3: Tonga All Set to Join, as Movement Seen in Talks

on Least-Developed Countries.” 35 The four modes of supply for traded services are cross-border supply of services (mode 1),

consumption abroad of services (mode 2), commercial presence established abroad to supply services (mode 3),

and movement of personnel abroad to supply services (mode 4). See WTO, “GATS Training Module: Chapter

1—Basic Purpose and Concepts—1.3 Definition of Services Trade and Modes of Supply,”

http://www.wto.org/english/tratop_e/serv_e/cbt_course_e/c1s3p1_e.htm. 36 WTO, “Summary of 16 December 2005—Day 4: Ministers Start Preparing Revised Draft Ministerial

Text.” 37 A large group of developing countries that includes members of the African Union, the African,

Caribbean, and Pacific countries, and other LDCs. 38 WTO, “Summary of 16 December 2005—Day 4.”

3-6

particular—should be independent of the reduction formula, and stressed the importance of

striking a balance between market access in agricultural and nonagricultural

products.28

The group agreed to establish negotiating modalities for nonagricultural market access talks

in early 2006, and to submit comprehensive draft schedules by July 31, 2006.29 Negotiations

continued over product coverage under the reduction formula. No substantive advances were

reported concerning efforts to identify, classify, and examine nontariff barriers. The

participants also set out additional details in “Annex B—Market Access for Non-Agricultural

Products” (see table 3-1). In the final declaration, ministers recognized the intertwined nature

of the agricultural and industrial goods negotiations—highlighting the critical need to reach

an overall balance between the two, given the importance of agricultural exports for

developing country members and the similar importance of market access for nonagricultural

exports for developed country members.

Services30

In November 2005, Pascal Lamy reported that, based on his consultations with delegates

since September 2005, he considered the services negotiations to be further advanced than

other areas.31 Although he expressed the hope that a comprehensive text might be available

by the conference,32 the draft text forwarded to ministers at Hong Kong drew a variety of

views from delegations.33 Some considered the draft services text sufficient, others sought

to strengthen it, and a third group considered it to be too prescriptive and demanding.34

Helping to broker discussions among delegations, conference “facilitator” Hyun Chong Kim

of Korea reported the concerns that the members had expressed related principally to

provisions on the qualitative objects in the text, on sector and modal objectives,35 on

government procurement, and on and plurilateral request-offer negotiations elements found

in the declaration’s “Annex C—Services.”36 The G-90 group37 of developing countries

proposed alternative text for the services annex that sought to emphasize development

concerns in general and to block the possibility of plurilateral services negotiations in

particular.38

Ministers agreed in the declaration to intensify negotiations to expand coverage by service

sector and supply channel (the four modes of services supply), in addition to improving the
39 WTO, “Ministerial Declaration—Doha Work Programme—Adopted on 18 December 2005,”

Ministerial Conference—Sixth Session—Hong Kong, 13–18 December 2005, WT/MIN(05)/DEC, Dec. 22, 2005,

Annex C, par. 26–27. 40 Ibid., Annex C, par. 6.

41 Ibid., Annex C, par. 2. The conference chairman, John Tsang, noted that the text changes

incorporated into the final declaration were intended largely to stress that approaches for services negotiations

in 2006 set out in Annex C were as a reference rather than a prescription. WTO, “Summary of 17 December

2005—Day 5.” 42 WTO, “Negotiating Group on Rules,” TN/RL/15, Nov. 30, 2005. 43 The Doha declaration calls for “negotiations aimed at clarifying and improving disciplines” under

the WTO agreements on antidumping, and subsidies and countervailing measures in light of the increased

application of these instruments by WTO members. WTO, “Ministerial Conference—Fourth Session—Doha,

9–14 November 2001—Ministerial Declaration—Adopted on 14 November 2001,” WT/MIN(01)/DEC/1, Nov.

20, 2001, par. 28. The Doha declaration also calls for negotiations to clarify and improve “disciplines and

procedures under the existing WTO provisions applying to regional trade agreements.” Ibid., par. 29. 44 WTO, “Ministerial Declaration,” WT/MIN(05)/DEC, Dec. 22, 2005, Annex D, par. 1. 45 Ibid., par. 2.

46 Ibid., par. 3.

47 Ibid., par. 4.

48 Ibid., par. 5.

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quality of existing commitments, guided by the objectives, approaches, and timelines set out

in Annex C.39 The group reaffirmed that request-offer negotiations remain the main method

of negotiation,40 but agreed that the text in the annex provided objectives for sectoral and

modal objectives as a reference for securing further commitments.41 The group agreed to

present plurilateral services requests to other members in early 2006, or as soon as possible

thereafter, with revised services offers to be submitted by July 31, 2006, and final draft

schedules by October 31, 2006.

Trade Rules42

At Hong Kong, the Negotiating Group on Rules set out the state-of-play in “Annex

D—Rules,” which included two sections: (1) antidumping, and subsidies and countervailing

measures including fisheries subsidies, and (2) regional trade agreements.43 Ministers

acknowledged results to date regarding amendments to the WTO agreements on

antidumping, and subsidies and countervailing measures.44 Ministers agreed to continue

negotiations toward further improvements, in particular measures to promote transparency,

predictability, and clarity of relevant disciplines.45 Ministers called on participants to avoid

the unwarranted use of antidumping measures and to limit the costs and complexity of such

proceedings.46

On antidumping measures, ministers declared that negotiations should consider (1) rules

regarding determinations of dumping, injury, and causation, and their application; (2)

procedures governing the initiation, conduct, and completion of antidumping investigations,

strengthening due process and transparency; and (3) the level, scope, and duration of

measures, including duty assessment, interim and new shipper reviews, sunset, and

anticircumvention proceedings.47 Ministers recognized that the rules negotiations had

intensified, with discussions based on specific texts.48 Ministers noted that detailed

discussions have recently touched on “determinations of injury/causation, the lesser duty

rule, public interest, transparency and due process, interim reviews, sunset, duty assessment,

circumvention, the use of facts available, limited examination and all other rates, dispute
49 Ibid., par. 6.

50 Ibid., par. 7.

51 Ibid., par. 9.

52 Ibid., par. 11.

53 Ibid., 2.

54 WTO, “Special Session of the Council for TRIPS,” TN/IP/14, Nov. 23, 2005. 55 WTO, “Ministerial Declaration,” WT/MIN(05)/DEC, Dec. 22, 2005. 56 WTO, “Summary of 17 December 2005—Day 5.”

57 Nonviolation complaints involve already granted concessions the benefits of which appear to have

been nullified despite no specific violation of the agreement's provisions taking place. 58 WTO, “Report by the Chairperson of the Special Session of the Committee on Trade and

Environment to the Trade Negotiations Committee,” TN/TE/14, Nov. 28, 2005. 59 WTO, “Ministerial Declaration,” WT/MIN(05)/DEC, Dec. 22, 2005.

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settlement, the definition of dumped imports, affiliated parties, product under consideration,

and the initiation and completion of investigations.”49

On subsidies and countervailing measures, ministers noted a need to deepen the analysis of

specific proposed texts concerning "the definition of a subsidy, specificity, prohibited

subsidies, serious prejudice, export credits and guarantees, and the allocation of benefit."50

In addition, ministers recalled their commitment to strengthen disciplines on subsidies in the

fisheries sector.51 Ministers charged the chairman with preparing consolidated texts of the

WTO agreements on antidumping measures, and subsidies and countervailing measures by

the slated conclusion of the Doha Round in December 2006.52

With regional trade agreements becoming an important element in members' trade policies,

ministers highlighted the need for these agreements to complement WTO disciplines.

Ministers instructed the Negotiating Group on Rules to intensify efforts to develop a draft

decision on transparency of members’ regional trade agreements by April 30, 2006.53

Intellectual Property54

Ministers at Hong Kong largely agreed that negotiations were on track concerning the

establishment of a multilateral system of notification and registration of geographical

indications for wines and spirits.55 Ministers agreed to intensify negotiations in order to

complete them by the conclusion of the Doha Round in December 2006. Although not part

of the final declaration, discussions continued at the conference about the relationship

between the WTO TRIPS Agreement and the United Nations (UN) Convention on

Biological Diversity56 regarding the protection of traditional knowledge and folklore, as well

as whether “nonviolation” complaints involving intellectual property should be permitted.57

Environment58

Ministers at Hong Kong reviewed the progress made in negotiations involving trade and the

environment. They instructed participants to intensify their examination of the relationship

between existing WTO trade rules and specific trade obligations required under various

multilateral environmental agreements (MEAs), as well as negotiations to develop effective

procedures for the regular exchange of information between MEA secretariats and their

counterpart WTO committees. Ministers also instructed negotiators to complete work on

reducing barriers to trading environmental goods and services.59
60 WTO, “Report to the Trade Negotiations Committee,” TN/TF/3, Nov. 21, 2005. 61 WTO, “Doha Work Programme—Decision Adopted by the General Council on 1 August 2004,”

WT/L/579, Aug. 2, 2004, par. 33. 62 WTO, “Special Session of the Dispute Settlement Body,” TN/DS/14, Nov. 25, 2005. 63 WTO, “Ministerial Declaration—Adopted on 14 November 2001,” Ministerial Conference—Fourth

Session—Doha, 9–14 November 2001, WT/MIN(01)/DEC/1, Nov. 20, 2001, par. 34. 64 WTO, “Special Session of the Committee on Trade and Development,” TN/CTD/14, Nov. 29, 2005. 65 WTO, “Ministerial Declaration,” WT/MIN(05)/DEC, Dec. 22, 2005, par. 40–57.

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Trade Facilitation60

The Negotiating Group on Trade Facilitation was established in October 2004 to (1) clarify

and improve relevant aspects of GATT Articles V (Freedom of Transit), VIII (Fees and

Formalities connected with Importation and Exportation), and X (Publication and

Administration of Trade Regulations) that can expedite the movement, release, and clearance

of goods, including those in transit; (2) enhance technical assistance and support for capacity

building in this area; and (3) provide for effective cooperation between customs and other

appropriate authorities in the area of trade facilitation and customs compliance.61

At Hong Kong, the ministers endorsed the group’s recommendations to intensify

negotiations on the broad range of subjects listed in “Annex E—Trade Facilitation,” to

continue information sharing efforts regarding trade facilitation, and to include relevant

international organizations in discussions. The group also recommended that special

attention be paid to the needs of LDCs for special and differential treatment, in particular for

technical assistance and capacity building where trade facilitation matters are concerned.

Dispute Settlement Negotiations62

In the Doha declaration, ministers agreed to negotiations to clarify and improve the WTO

Dispute Settlement Understanding.63 Initially scheduled to conclude by May 2003, these

negotiations are not part of the Doha Round “single undertaking” package intended to

consolidate the Doha multilateral trade negotiations. Ministers at Hong Kong directed

negotiators, who missed the initial deadline, to continue work toward a rapid conclusion.

Special and Differential Treatment64

The subject of special and differential treatment encompasses a multitude of topics, given

the core aim of the DDA to address the needs and interests of developing country

members—in particular, the LDCs. In the Hong Kong declaration, subjects included under

the special and differential treatment rubric address various implementation issues including

TRIPS and public health; small economies; trade, debt, and finance; trade and transfer of

technology; intellectual property under the WTO and the UN Convention on Biological

Diversity; TRIPS nonviolation complaints; electronic commerce; the LDCs; the integrated

framework concerning technical assistance; technical cooperation; commodity issues;

coherence concerning multilateral economic policymaking; and “aid for trade.”65

At Hong Kong, ministers adopted the decisions in “Annex F—Special and Differential

Treatment,” which contained five specific proposals to aid the LDCs. Specific to particular

WTO agreements, these proposals address (1) waivers concerning the LDCs; (2) quota-free

and duty-free market access for LDC products in the developed countries—and willing
66 Ibid., par. 36–37.

67 Ibid., par. 39.

68 Ibid., par. 40.

69 Ibid., par. 41.

70 Ibid., par. 42–43.

71 Ibid., par. 44–45.

72 Ibid., par. 46.

73 Ibid., par. 47.

74 Ibid., par. 48–49.

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developing countries—by 2008; (3) exemptions from donor “conditionality,” that is, certain

restrictions placed on economic assistance given by bilateral or multilateral donors; (4) an

exemption from obligations concerning trade-related investment measures for seven years

(i.e., until approximately 2014); and (5) WTO coordination with donors regarding the

provision of technical assistance. The ministers at Hong Kong instructed the WTO

Committee on Trade and Development to complete its review of proposals submitted to

make special and differential treatment provisions more effective, as well as make

recommendations in this regard, by the slated conclusion of the Doha Round in December

2006. Ministers expressed concern over the lack of progress in reviewing proposals that were

referred to other WTO bodies, instructing these bodies to complete their reviews and

formulate needed recommendations, also by December 2006.66

Discussions on implementation issues arose when commitments under the Uruguay Round

Agreements were still not implemented by their January 2000 deadline. At Hong Kong,

ministers reiterated their instructions to continue discussions to resolve outstanding issues,

and for the WTO director-general to report to each regular TNC and WTO General Council

meeting to review progress and take appropriate action during 2006.67

Ministers agreed to the amendment to the TRIPS Agreement adopted by the General Council

on December 6, 2005, implementing the 2003 General Council Decision adopted on the

TRIPS Agreement and Public Health.68 This decision and its subsequent amendment of the

agreement aims to enable greater access for LDCs to vital medicines when faced with

national public health emergencies such as HIV/AIDS, tuberculosis, malaria, and similar

epidemics.

Ministers reviewed the work program underway and addressed efforts to better integrate

small and vulnerable economies into the multilateral trading system without creating a

separate category of WTO members.69 Ministers agreed that the General Council would

continue to examine the relationship of trade to issues of debt and finance, as well as trade

to the transfer of technology, to the extent of the mandate and competence of the WTO.70

Ministers asked the General Council to report on progress made examining the relationship

between the WTO TRIPS Agreement and the UN Convention on Biological Diversity, and

also to examine the issue of the nonviolation disputes under the TRIPS Agreement.71

Members at Hong Kong agreed to continue their moratorium on imposing customs duties

on commerce conducted by electronic transmission until the next ministerial meeting.72

One of the areas in which agreement was reached during the Hong Kong ministerial was the

agreement to offer products of LDCs duty-free and quota-free access to markets of the

developed countries as well as to markets of any developing country members willing to

participate.73 Another area was in the ministers’ endorsement of the idea for an enhanced

Integrated Framework (IF), to enter into force no later than December 31, 2006.74 The IF was

established in October 1997 as a technical assistance fund for the LDCs, and is managed by
75 They are the IMF, International Trade Center of the UNCTAD/WTO, United Nations Conference

on Trade and Development (UNCTAD), United Nations Development Program, World Bank, and the WTO. 76 WTO, “Ministerial Declaration,” WT/MIN(05)/DEC, Dec. 22, 2005, par. 52. 77 Ibid., par. 54–55.

78 Ibid., par. 57.

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six major multilateral economic institutions.75 Ministers supported technical assistance

programs in the declaration,76 such as the IF and others such as the WTO Joint Integrated

Technical Assistance Program.

Ministers at Hong Kong also recognized the concerns of a number of developing countries

regarding commodities, highlighting the need for positive outcomes in the agriculture and

nonagricultural market access negotiations underway.77 The ministers supported continued

meetings between the heads of the IMF, World Bank, and WTO to build experience and

advance greater coherence in international trade and development policymaking in order to

better address the needs of developing countries. 

Finally, trade ministers at Hong Kong reiterated the need to build supply-side capacity and

infrastructure in developing countries and LDCs to support a concept recently raised by

finance and development ministers, called “aid for trade.” The ministers recognized that “aid

for trade” cannot substitute for the development benefits expected to result from a successful

conclusion to the Doha Round of multilateral trade negotiations.78

Regular Activities

Membership

In 2005, WTO membership rose to 149 with the accession of Saudi Arabia in December

(table 3-2). Another 32 countries are observers, in various stages of accession to the WTO

(table 3-3).

Dispute Settlement

According to the WTO, 11 dispute settlement cases were brought during 2005 (table 3-4).

Developments during 2005 for dispute settlement cases to which the United States was a

party are presented in table A-20. In a new case, the United States requested dispute

settlement consultations in November 2005 with Turkey concerning measures affecting rice

imports (DS334). As a respondent, the United States held consultations in two new disputesettlement cases. In January 2005, Mexico requested consultations with the United States

over U.S. antidumping determinations regarding stainless steel (DS325). In November 2005,

Ecuador initiated dispute consultations with the United States over a U.S. antidumping

determination regarding shrimp.
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Table 3–2 WTO Membership in 2005

Albania

Angola

Antigua and Barbuda

Argentina

Armenia

Australia

Austria

Bahrain

Bangladesh

Barbados

Belgium

Belize

Benin

Bolivia

Botswana

Brazil

Brunei Darussalam

Bulgaria

Burkina Faso

Burma/Myanmar

Burundi

Cambodia

Cameroon

Canada

Central African Rep.

Chad

Chile

China

China, Hong Kong

China, Macao

China, Taipei

Colombia

Congo, Democratic Rep.

Congo, Rep.

Costa Rica

Côte d'Ivoire

Croatia

Cuba

Cyprus

Czech Rep.

Denmark

Djibouti

Dominica

Dominican Rep.

Ecuador

Egypt

El Salvador

Estonia

European Communities

Fiji

Finland

France

Gabon

Gambia

Georgia

Germany

Ghana

Greece

Grenada

Guatemala

Guinea

Guinea Bissau

Guyana

Haiti

Honduras

Hungary

Iceland

India

Indonesia

Ireland

Israel

Italy

Jamaica

Japan

Jordan

Kenya

Korea

Kuwait

Kyrgyz Rep.

Latvia

Lesotho

Liechtenstein

Lithuania

Luxembourg

Macedonia

Madagascar

Malawi

Malaysia

Maldives

Mali

Malta

Mauritania

Mauritius

Mexico

Moldova

Mongolia

Morocco

Mozambique

Namibia

Nepal

Netherlands, Netherlands Antilles

New Zealand

Nicaragua

Niger

Nigeria

Norway

Oman

Pakistan

Panama

Papua New Guinea

Paraguay

Peru

Philippines

Poland

Portugal

Qatar

Romania

Rwanda

Saint Kitts and Nevis

Saint Lucia

Saint Vincent and the Grenadines

Saudi Arabia

Senegal

Sierra Leone

Singapore

Slovak Rep.

Slovenia

Solomon Islands

South Africa

Spain

Sri Lanka

Suriname

Swaziland

Sweden

Switzerland

Tanzania

Thailand

Togo

Trinidad and Tobago

Tunisia

Turkey

Uganda

United Arab Emirates

United Kingdom

United States

Uruguay

Venezuela

Zambia

Zimbabwe

Source: WTO, "Members and Observers," http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm (accessed

Feb. 27, 2006).
3-13

Table 3–3 WTO Observers in 2005

Afghanistan

Algeria

Andorra

Azerbaijan

Bahamas

Belarus

Bhutan

Bosnia and Herzegovina

Cape Verde

Ethiopia

Equatorial Guinea

Iran

Iraq

Kazakhstan

Laos

Lebanon

Libya

Montenegro

Russia

Samoa

São Tomé and Principe

Serbia

Seychelles

Sudan

Tajikistan

Tonga

Ukraine

Uzbekistan

Vanuatu

Vatican (Holy See)

Vietnam

Yemen

Source: WTO, "Members and Observers," http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm (accessed

Feb. 27, 2006).

Table 3–4 WTO Dispute-Settlement Cases Initiated in 2005

Case

No. Complainant Respondent Case Name

Consultations

Requested

DS325 Mexico United States Anti-Dumping Determinations regarding

Stainless Steel from Mexico

Jan. 5, 2005

DS326 Chile EEC Definitive Safeguard Measure on Salmon Feb. 8, 2005

DS327 Pakistan Egypt Anti-Dumping Duties on Matches from Pakistan Feb. 21, 2005

DS328 Norway EEC Definitive Safeguard Measure on Salmon Mar. 1, 2005

DS329 Mexico Panama Tariff Classification of Certain Milk Products Mar. 16, 2005

DS330 EEC Argentina Countervailing Duties on Olive Oil, Wheat Gluten

and Peaches

Apr. 29, 2005

DS331 Guatemala Mexico Anti-Dumping Duties on Steel Pipes and Tubes

from Guatemala

June 17, 2005

DS332 EEC Brazil Measures Affecting Imports of Retreaded Tyres June 20, 2005

DS333 Costa Rica Dominican Republic Foreign Exchange Fee Affecting Imports from

Costa Rica

Sept. 12, 2005

DS334 United States Turkey Measures Affecting the Importation of Rice Nov. 2, 2005

DS335 Ecuador United States Anti-Dumping Measure on Shrimp from Ecuador Nov. 17, 2005

Source: WTO, "Chronological List of Disputes Cases,"

http://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htm (accessed Feb. 27, 2006).

Note: See table A-20 for developments during 2005 for WTO dispute settlement cases to which the United States

was a party.
79 The OECD was established in 1961 with headquarters in Pais, France. The OECD is charged with

sustaining economic growth and employment while maintaining financial stability to promote a rising standard

of living in its member countries, contributing in the process to the development of the world economy. OECD,

“Convention on the Organization for Economic Co-operation and Development,” Paris, Dec. 14, 1960. 80 The 30 member countries of the OECD in 2005, whose industrialized economies represent the bulk

of world production and trade, 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, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United

Kingdom, and the United States. 81 Discussions at the OECD sometimes evolve into negotiations that result in formal OECD agreements,

such as the OECD Declaration and Decisions on International Investment and Multinational Enterprises (1976)

and the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions

(1997), or assist in supporting other multilateral negotiations such as the WTO multilateral trade negotiations

underway in the Doha Round. OECD, “Overview of the OECD,” http://www.oecd.org. 82 OECD, “Summary Record of the 141st Session of the Trade Committee—Paris, 9–10 March 2005,”

TD/TC/A(2005)3/PROV, Sept. 13, 2006; OECD, “Draft Summary Record of the 142nd Session of the Trade

Committee—Paris, 25–26 October 2005,” TD/TC/A(2005)3/PROV, Jan. 30, 2006. 83 OECD, “Summary Record of the 141st Session,” and “Draft Summary Record of the 142nd Session.” 84 The Trade and Strucutural Adjustment study comprises the following papers: OECD, Trade

Directorate, Trade Committee, Trade and Structural Adjustment, TD/TC(2005)2/ANN2/FINAL 03/05/05,

TD/TC(2005)2/ANN3/FINAL 03/05/05, TD/TC(2005)2/ANN1/FINAL 03/05/05, TD/TC(2005)1/FINAL

28/04/05: BROCHURE, TD/TC(2005)2/CHAP1/FINAL 27/04/05, TD/TC(2005)2/CHAP2/FINAL 27/04/05,

TD/TC(2005)2/CHAP2 15/03/05, TD/TC(2005)2/CHAP1 11/03/05, TD/TC(2005)2/ANN1 10/03/05,

TD/TC(2005)2/ANN2 10/03/05, and TD/TC(2005)2/ANN3 09/03/05.

3-14

Organization for Economic Cooperation and Development

The OECD is an international organization79 that provides a forum for members80 to examine

and discuss government policy issues, and common economic policy issues in particular.81

Trade Committee

The OECD Trade Committee met in March and October 2005. Members discussed a number

of topics, many directed at support for the WTO multilateral trade negotiations underway in

the Doha Round. Topics included trade-related aspects of competition policy, the

environment, labor markets, investment, trade facilitation, and agricultural trade. Other

topics included macroeconomic and sectoral policy issues, such as measures against bribery

of public officials, export credits, the service sector and trade in services, regulatory reform,

and strengthening IPR in developing countries; policies and negotiations about the steel

sector; and finally, OECD “outreach” efforts to nonmembers, developing countries in

particular.82

The Trade Committee reviewed work in progress, which included projects addressing trade

and structural adjustment; the impact of changes in tariffs on government revenue in

developing countries; the potential economic impact on the LDCs of trade preference

erosion; technology transfer to developing countries; the impact of China’s trade and growth

on select OECD countries and Russia; outreach to nonmembers; and ensuring transparency

of OECD deliberations.83

The study on trade and structural adjustment addresses how developed and developing

economies might adjust to new sources of competition, technological change, or shifting

consumer preferences, while limiting adjustment costs for individuals, communities, and

society as a whole.84 The study on nontariff barriers (NTBs)—such as import quotas and
85 OECD, Trade Directorate, Trade Committee, Working Party of the Trade Committee, Michael

Ferrantino, “Quantifying the Trade and Economic Effects of Non-tariff Measures,” TD/TC/WP(2005)26/FINAL,

Jan. 20, 2006, OECD Trade Policy Working Paper No. 28. 86 OECD, Trade Directorate, Trade Committee, Przemyslaw Kowalski, “Impact of Changes in Tariffs

on Developing Countries’ Government Revenue,” TD/TC/WP(2004)29/FINAL, Apr. 18, 2005, OECD Trade

Policy Working Paper No.18. 87 OECD, Trade Directorate, Trade Committee, Jonathan Gage and Molly Lesher, “Intertwined: FDI

in Manufacturing and Trade in Services,” TD/TC/WP(2005)8/FINAL, Dec. 5, 2005, OECD Trade Policy

Working Paper No. 25. 88 OECD, Trade Directorate and Directorate for Food, Agriculture and Fisheries, Joint Working Party

on Agriculture and Trade, “Regional Trading Arrangements and the Multilateral Trading System: Agriculture,”

OECD Trade Policy Working Paper No. 15, Mar. 22, 2005, COM/TD/AGR/WP(2004)9/FINAL. 89 OECD, Trade Directorate, Trade Committee, Douglas Lippoldt and Przemyslaw Kowalski, “Trade

Preference Erosion: Expanded Assessment of Countries at Risk of Welfare Losses,”

TD/TC/WP(2005)13/FINAL, Aug. 18, 2005, OECD Trade Policy Working Paper No. 20. 90 OECD, Trade Directorate, Trade Committee, Working Party of the Trade Committee, “The

Economic Impact of Trade Facilitation,” TD/TC/WP(2005)12/FINAL, OECD Trade Policy Working Paper No.

21, Oct. 12, 2005. 91 OECD, Trade Directorate, Trade Committee, “Special and Differential Treatment in the Area of

Trade Facilitation,” TD/TC/WP(2006)9, Feb. 14, 2006. 92 It was adopted by the 29 OECD members at that time plus five nonmembers at the time—Argentina,

Brazil, Bulgaria, Chile, and Slovak Republic. Slovenia and Estonia acceded to the convention in 2001 and 2004,

respectively. 93 USTR, 2006 Trade Policy Agenda and 2005 Annual Report. 

3-15

licenses—examines how NTBs affect world trade and proposes ways to reduce their negative

effects.85

Working papers under the committee purview included topics that addressed the impact of

tariff reductions on government revenue in developing countries86 and the relationship

between trade in services with foreign direct investment in manufacturing.87 The Trade

Committee, in conjunction with the OECD Committee on Agriculture, produced a joint

analysis of how trade rules treat agriculture differently under the multilateral trading system

and under regional trading arrangements.88 Other work involved studying the potential

impact of trade-preference erosion on developing countries.89

The Trade Committee produced two studies on trade facilitation in support of the WTO

ministerial meeting held at Hong Kong in December 2005. One examined the economic

impact of trade facilitation90 and another addressed the costs and benefits to developing

countries of introducing trade facilitation measures and their impact on trade flows,

investment, and government revenues.91 The committee also sponsored a forum in October

2005 in Sri Lanka to share OECD work on trade facilitation with government officials and

businesspeople.

Antibribery Convention

The OECD Convention on Combating Bribery of Foreign Public Officials in International

Business Transactions entered into force in February 1999.92 The convention requires that

bribery of foreign public officials be criminalized and imposes substantial penalties on those

offering or paying bribes. Parties to the convention are to undergo an individual review of

national legislation implementing the convention (part one), followed by an evaluation of

their enforcement (part two). By the end of 2005, all parties except Estonia had completed

a part one review, and 22 countries had completed part two.93
94 OECD, “Bright Outlook for Steel Industry in 2005–2006 Forecast at OECD/IISI Conference,” Jan.

17, 2005. 95 OECD, Directorate for Science, Technology and Industry, Steel Committee, “Summary Record of

the 58th Meeting of the Steel Committee—Held in Paris on 14 January 2005,” DSTI/SU/SC/M(2005)1, Sept.

12, 2005. 96 OECD, Directorate for Science, Technology and Industry, Steel Committee, “Draft Agenda for the

59th Meeting of the Steel Committee,” DSTI/SU/SC/A(2005)2, Sept. 5, 2005. 97 OECD, Directorate for Science, Technology and Industry; Steel Committee, “Aide-memoire on the

Future of the OECD High Level Group on Steel,” DSTI/SU/SC(2006)1, Jan. 16, 2006.

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Steel Subsidy Negotiations

The OECD Steel Committee, in conjunction with the International Iron and Steel Institute,

held a conference in Paris on January 12–13, 2005, to assess the outlook for the world steel

industry. Company participants represented 95 percent of world crude steel production.94 The

conference delegates noted that the rise in steel product prices since 2004 has boosted

financial conditions in the industry and has helped industry consolidation. The conference

record indicates that conference participants viewed conditions in the steel market as likely

to be positive over the short term (through 2006), with steel production in China and steel

demand in China, India, and countries of the former Soviet Union, continuing to grow.

However, the participants indicated that they expect international trade in steel products to

decline in 2006 as new capacity comes online. Despite the positive outlook in the short term,

participants remained concerned in the longer term about the (1) expanding new steel

capacity, (2) conditions in world raw material markets, and (3) potential for large shifts in

steel trade flows. A number of delegates voiced concern about the role of government

subsidies in expanding steelmaking capacity, and how a multilateral steel subsidy agreement

might strengthen disciplines in this regard.95

The Steel Committee held a second meeting on October 27, 2005.96 Following the meeting,

the chairman of the OECD High Level Group on Steel circulated a proposal for future work

in the group. He noted that, despite progress toward a multilateral steel subsidy agreement

in his bilateral consultations during 2005, significant differences remained among

participants in key areas, including environmental subsidies, trade remedies, and special and

differential treatment. Nonetheless, he noted that interest in continuing the dialogue on

subsidies and related government support policies remains high, with the possibility for a

return to formal negotiations once related issues in the Doha Round are resolved.97

Given the more immediate focus on the Doha negotiations, the High Level Group and the

Steel Committee agreed to reorient tasks between themselves, while still continuing to work

in parallel. Discussions in the group concerning a steel subsidy agreement are to be

minimized considering the limited prospects for consensus during the first six to eight

months of 2006. The High Level Group is to address (1) steel-specific trade issues, (2)

structural adjustments in the steel industry, (3) the steel situation in developing countries,

and (4) environmental challenges facing the steel industry. The High Level Group is to work

to develop common policy approaches in these four areas, and resolve the considerable

disagreement among participants. The Steel Committee is to deal with more “technical”

issues such as (1) the situation in the steel market and industry, (e.g., the demand for and

production of steel, steel prices, international trade developments, the availability and prices

of raw materials, and the availability of transport); (2) developments in steelmaking capacity,

such as world pig iron and crude steelmaking production and effective capacity, as well as
98 OECD, Directorate for Science, Technology and Industry; Steel Committee, “Aide-memoire on the

Future of the OECD High Level Group on Steel,” DSTI/SU/SC(2006)1, Jan. 16, 2006. 99 OECD, “OECD Project on Counterfeiting and Piracy,” press release, Aug. 29, 2005. 100 OECD, “Counterfeiting and Piracy: Measurement Issues—Background Report for the WIPO/OECD

Expert Meeting on Measurement and Statistical Issues Geneva, 17–18 October 2005 Karsten Olsen OECD

Secretariat.” 101 APEC was established in 1989. Its 21 members of APEC are Australia; Brunei Darussalam; Canada;

Chile; China; Hong Kong, China; Indonesia; Japan; Korea; Malaysia; Mexico; New Zealand; Papua New Guinea;

Peru; the Philippines; Russia; Singapore; Chinese Taipei (Taiwan); Thailand; the United States; and Vietnam.

For more information, see APEC, “APEC at a Glance,” http://www.apec.org/apec/about_apec.html. 102 APEC operates as a cooperative, multilateral economic and trade group, whose decisions are made

on the basis of consensus, and whose commitments are undertaken voluntarily. APEC, “APEC at a Glance.” 103 Ibid. 104 Named for the 1994 meeting of APEC leaders in Bogor, Indonesia.

3-17

related developments in nonmember countries; and (3) capacity and industry restructuring.

The Steel Committee and the High Level Group each plan to hold one meeting per year.98

Counterfeiting and Piracy Project

In response to rising concerns in government and the business community, the OECD has

launched a three-phase project to assess the effects of counterfeiting and piracy. The

objective of the project is to improve factual understanding and awareness of the effects that

IPR infringement can have on governments, businesses, and consumers in both member and

nonmember economies.

Phase one of the project is to focus on counterfeit and pirated products, which are tangible

items that infringe trademarks or copyrights, as well as infringement of patents or design

rights. Phase two of the project is to examine piracy of digital content. Phase three is to

address other forms of infringement of intellectual property, notably geographical

indications. In addition to analyzing the economic effects of counterfeit and pirated products,

the project is to analyze the impact of such products with respect to the health, safety, and

security threats posed to consumers. The project is to be carried out during 2005–07 in

cooperation with other organizations involved in counterfeiting and piracy issues, including

the WTO, the World Customs Organization, WIPO, Interpol, and relevant nongovernmental

organizations.99 In October 2005, the OECD and WIPO jointly held an experts meeting to

examine methods and techniques for measuring the scope, magnitude, and effects of

counterfeiting and piracy.100

Asia-Pacific Economic Cooperation (APEC)

APEC is an informal forum for government authorities from Pacific Rim basin countries.101

APEC leaders meet annually to provide direction to the organization in the form of actionoriented work programs, and to define priorities for its committees, working groups, senior

officials meetings, and special task groups.102 Since inception, APEC has aimed to facilitate

economic growth, trade, investment, and cooperation in the Asia-Pacific region.103 To reach

its objective, member countries committed to the “Bogor Goals” in 1994,104 which set a

timetable for creating a free and open trade and investment area in the Asia-Pacific region

by 2010 for industrialized countries, and by 2020 for developing countries. Various APEC
105 APEC, “Outcomes & Outlook 2005–2006,” http://www.apec.org/content/apec/about_apec.html

(accessed Feb. 1, 2006). 106 Ibid. 107 Ibid. 108 Ibid. 109 APEC, “A Mid-term Stocktake of Progress Towards the Bogor Goals—Busan Roadmap to Bogor

Goals,” Ref. No. 2005/AMM/002anx1rev1, 17th Annual Ministerial Meeting, Nov. 15–16. 110 Ibid. 111 Ibid. 112 Ibid. 113 For more information on APEC’s Individual Action Plans, see APEC, “Action Plans,”

http://www.apec.org/apec/about_apec/how_apec_operates/action_plans_.html. 114 APEC, “A Mid-term Stocktake of Progress Towards the Bogor Goals.”

3-18

initiatives have been undertaken every year since 1995 to provide member countries with

direction on how to reach the Bogor Goals.105

Three major developments resulted from the November 2005 annual ministerial meeting in

Busan, Korea:106 member countries completed their mid-term review of the progress made

in meeting the Bogor Goals; ministers drafted the “Busan Roadmap” to provide a framework

for implementing the outstanding reform initiatives identified in the mid-term review; and

APEC ministers adopted the Anti-Counterfeiting and Piracy Initiative.107 Reflecting its

policy of increasing participation in multilateral trade debates as they relate to the AsiaPacific region, APEC economic leaders also issued a separate statement supporting a

successful conclusion to the DDA.108

The Mid-term Stocktake

In 2005, APEC completed its mid-term review of the progress made toward fulfilling the

Bogor Goals, known as the Mid-term Stocktake (MTST).109 As a result of a study

commissioned in 2001, each member economy agreed to submit a self-assessment to APEC

by 2005. These reports, as well as the conclusions drawn from an MTST symposium in May

2005, stated that despite remaining challenges, APEC economies have significantly

liberalized trade and investment flows in the region since 1994.110 Notably, APEC members

have reduced average regional applied tariffs to 5.5 percent in 2004 from 16.9 percent in

1989; increased transparency in trade and investment information; streamlined administrative

procedures, such as investment screening; and promoted growth in service sector trade

through market opening initiatives.111

The MTST study also listed further steps that need to be taken to fulfill the Bogor Goals.112

The steps include: promoting regional capacity-building; creating more effective Collective

and Individual Action Plans;113 extending trade and investment liberalization measures to all

sectors of the economy; implementing deeper trade and investment facilitation procedures,

such as electronic trading; correcting market-distorting activities such as IPR infringement;

creating a comprehensive regional framework for regional trade agreements (RTAs) and

FTAs; and, generally, supporting the multilateral trading system as it relates to regional trade

issues.114
115 Ibid. 116 Know as the “Busan Business Agenda.” 117 APEC, “APEC Anti-Counterfeiting and Piracy Initiative,” Ref. #2005/MRT/006anx5, Meeting of

APEC Ministers Responsible for Trade, Jeju, Korea, Jun. 2–3, 2005. 

3-19

The Busan Roadmap to Bogor

APEC ministers also proposed the “Busan Roadmap to Bogor” (BRBG) in 2005 to create

an implementation plan for dealing with the outstanding trade and investment liberalization

initiatives identified in the MTST.115 The goal of BRBG is to accelerate progress toward the

Bogor Goals and ensure that APEC effectively responds to current business conditions. To

implement the BRBG initiatives, Ministers agreed to:

• incorporate capacity building and deeper transparency as APEC objectives;

• standardize RTAs/FTAs to ensure high-quality, transparent, and more consistent

trade agreements;

• leverage APEC’s coordinating capabilities to respond to regional private-sector

needs through an initiative aimed to cut business transactions costs by 5 percent

by 2010, create guidelines for reducing online piracy, and curtail corruption;116

and

• participate in multinational trade discussions, such as those associated with the

WTO Doha Round trade negotiations, as they relate to liberalizing trade and

investment in the Asia-Pacific region.

Anti-Counterfeiting and Piracy Initiative

The year 2005 also marked the creation of the Anti-Counterfeiting and Piracy Initiative by

APEC ministers.117 Key recommendations for member countries included

• developing guidelines on how member authorities should identify and handle

pirated and/or counterfeited goods;

• developing guidelines on how member authorities should protect legitimate

products against unauthorized use;

• ensuring supply chains are free from pirated and/or counterfeited goods;

• exchanging IPR infringement information among member economy authorities;

and

• promoting anti-counterfeiting and piracy campaigns.

1

 NAFTA trade is discussed in more detail later in this chapter. 2

 The U.S.-Oman FTA was signed by the two parties on Jan. 19, 2006. Negotiations with Colombia

and Peru began in 2004. The United States concluded FTA negotiations with Colombia on Feb. 27, 2006.

4-1

CHAPTER 4

U.S. Free Trade Agreements

This chapter reviews developments related to U.S. free trade agreements (FTAs) during

2005. It describes trends in U.S. merchandise trade under FTAs in force during 2005;

reviews the status of U.S. FTA negotiations during the year and separately describes the

agreements concluded with Oman, Peru, and Colombia as well as the negotiations for the

Free Trade Area of the Americas (FTAA); and reviews major NAFTA activities including

NAFTA dispute settlement developments during the year.

FTAs in Force during 2005

The United States was a party to six FTAs as of December 31, 2005—the U.S.-Australia

FTA, which entered into force on January 1, 2005; the U.S.-Chile FTA (2004); the U.S.-

Singapore FTA (2004); the U.S.-Jordan FTA (2001); NAFTA (1994); and the U.S.-Israel

FTA (1985). The U.S.-Morocco FTA entered into force on January 1, 2006. 

Table 4-1 shows U.S. merchandise trade with FTA partners during 2003-05. In 2005, U.S.

exports of goods to FTA partners were valued at $330.0 billion. U.S. exports to FTA partners

accounted for 41.0 percent of total U.S. exports, up from 39.0 percent in 2004. U.S. imports

of goods from FTA partners were valued at $504.1 billion. U.S. imports from FTA partners

accounted for 30.4 percent of U.S. imports from the world, almost unchanged from 2004.

NAFTA partners Canada and Mexico accounted for more than 85 percent of the value of

U.S. FTA exports, and for more than 90 percent of the value of U.S. FTA imports during

2005.1

 The overall U.S. merchandise trade balance with FTA partners was a deficit of $174.1

billion—99.0 percent of which was accounted for by the deficit with the NAFTA partners.

Australia and Singapore were the only FTA partners with which the United States recorded

a merchandise trade surplus during 2005. Despite the increasing U.S. merchandise trade

deficit with FTA partners, the U.S. trade deficit with FTA partners declined from 23.0

percent of the overall deficit in 2003 to 20.3 percent of the overall deficit in 2005, largely

because of even more rapid growth of the U.S. goods deficit with non-FTA countries.

FTA Negotiations during 2005

The United States launched bilateral FTA negotiations with Oman and the United Arab

Emirates (UAE) during 2005. The United States concluded FTA negotiations with Oman and

Peru during 2005, and with Colombia in early 2006; those FTAs are described below.2

 The

United States signed a multiparty FTA with Central America (Costa Rica, El Salvador,

Guatemala, Honduras, and Nicaragua) and the Dominican Republic in 2004. The United
3

 The agreement entered into force for El Salvador on Mar. 1, 2006, and it entered into force for

Honduras and Nicaragua on Apr. 1, 2006. USTR, “Statement of USTR Rob Portman Regarding Entry into Force

of the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) for Honduras and

Nicaragua,” press release, Mar. 31, 2006. For a summary of the U.S. FTA with Central America and the

Dominican Republic, see USITC, The Year in Trade 2004, USITC publication 3779, July 2005, pp. 4-4 to 4-5.

See also USITC, U.S.-Central America-Dominican Republic Free Trade Agreement: Potential Economywide

and Selected Sectoral Effects, investigation No. TA-2104-13, USITC publication 3717, August 2004. 4

 As stated above, negotiations with Colombia were successfully concluded on Feb. 27, 2006. The

United States launched bilateral FTA negotiations with Korea and Malaysia on Feb. 2, 2006 and Mar. 8, 2006,

respectively.

4-2

Table 4–1 U.S. merchandise trade with FTA partners, 2003–05

(Million dollars)

2003 2004 2005

Exports:

NAFTA 231,857 256,186 284,902

Israel 4,569 5,973 6,497

Jordan 479 531 607

Singapore NA 17,850 18,680

Chile NA 3,236 4,668

Australia NA NA 14,638

FTA partner total 236,905 283,776 329,992

World 651,424 727,183 803,992

FTA partner share of world 36.4 39.0 41.0

Imports:

NAFTA 361,215 410,619 456,750

Israel 12,767 14,515 18,680

Jordan 673 1,093 1,267

Singapore NA 14,848 15,084

Chile NA 5,007 6,745

Australia NA NA 7,360

FTA partner total 374,655 446,082 505,886

World 1,250,097 1,460,160 1,662,380

FTA partner share of world 30.0 30.6 30.4

Balance:

NAFTA -129,358 -154,443 -171,848

Israel -8,198 -8,542 -10,373

Jordan -194 -562 -660

Singapore NA 3,002 3,596

Chile NA -1,771 -2,077

Australia NA NA 7,278

FTA partner total -137,750 -162,306 -174,084

World -598,673 -732,977 -858,388

FTA partner share of world 23.0 22.1 20.3

Source: U.S. Department of Commerce.

Note: NA indicates not applicable because an FTA was not in force.

States was the only party to implement that agreement during 2005.3 At year-end 2005, the

United States was engaged in FTA negotiations with Colombia, Ecuador, Panama, Thailand,

and the UAE.4

 Multiparty negotiations begun in 1998 for an FTA with the countries of the

Western Hemisphere toward the creation of the FTAA remained stalled during the year, as

described in more detail below. Table 4-2 summarizes the status of U.S. FTA negotiations

during 2005.
5

 USTR, “United States and Oman Sign Free Trade Agreement,” press release, Jan. 19, 2006. 6

 USITC, U.S.-Oman Free Trade Agreement: Potential Economywide and Selected Sectoral Effects,

investigation No. TA-2104-19, USITC publication 3837, Feb. 2006. 7

 USTR, “United States and Oman Sign Free Trade Agreement,” press release, Jan. 19, 2006. 8

 Ibid.

4-3

Table 4–2 Status of U.S. FTA negotiations during 2005a

FTA partner(s)

Negotiations 

started

Negotiations

concluded

Agreement

signed by parties

Date of entry

into force

Morocco Jan. 21, 2003 Mar. 2, 2004 June 15, 2004 Jan. 1, 2006

Bahrain Jan. 26, 2004 May 27, 2004 Sept. 14, 2004 (b

)

Central America and the Dominican Republic:

 El Salvador, Guatemala, Honduras, and

 Nicaragua

 Costa Rica

 Dominican Republic

Jan. 8, 2003

Jan. 8, 2003

Jan. 14, 2004

Dec. 17, 2003

Jan. 25, 2004

Mar. 15, 2004

May 28, 2004

May 28, 2004

Aug. 5, 2004

(

c

)

Oman Mar. 12, 2005 Oct. 3, 2005 Jan. 19, 2006

Andean Trade Promotion Agreement

 Peru May 18, 2004 Dec. 7, 2005 Apr. 12, 2006

 Colombia May 18, 2004 Feb. 27, 2006

 Ecuador May 18, 2004 Ongoing

Free Trade Area of the Americas (FTAA)d Apr. 18, 1998 Ongoing

Panama Apr. 26, 2004 Ongoing

South African Customs Union (Botswana,

 Lesotho, Namibia, South Africa, and

 Swaziland June 2, 2003 Ongoing

Thailand June 28, 2004 Ongoing

United Arab Emirates Mar. 12, 2005 Ongoing

Source: USTR, various press releases, http://www.ustr.gov.

a Includes FTAs already signed by the parties, but not implemented into law during 2005. b Implementing legislation signed into law by the United States on Jan. 11, 2006. c Implementing legislation signed into law by the United States on Aug. 2, 2005. The agreement entered into force

for El Salvador on Mar. 1, 2006, and it entered into force for Honduras and Nicaragua on Apr. 1, 2006. d Other negotiating parties to the FTAA are: Antigua and Barbuda, Argentina, Bahamas, Barbados, Belize, Bolivia,

Brazil, Canada, Chile, Colombia, Costa Rica, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada,

Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, St. Vincent and the

Grenadines, St. Lucia, St. Kitts and Nevis, Suriname, Trinidad and Tobago, Uruguay, and Venezuela.

U.S.-Oman Free Trade Agreement

The United States and Oman launched FTA negotiations on March 12, 2005, and

successfully concluded the talks on October 3, 2005. President Bush notified Congress of

his intention to sign the FTA with Oman on October 17, 2005, and the two parties signed the

FTA on January 19, 2006.5

 The Commission’s report on the FTA, in accordance with section

2104(f) of the Trade Act of 2002, was published in February 2006.6

 The U.S.-Oman FTA

is part of the U.S. Administration’s “Middle East Free Trade Initiative,” launched by

President Bush in 2003 as a plan of graduated steps for Middle Eastern nations to increase

trade and investment with the United States and others in the world economy.7

The U.S.-Oman FTA is to provide for immediate duty-free treatment for almost 100 percent

of consumer and industrial products and for 87 percent of agricultural tariff lines.8

 Duties on

other products are to be eliminated within 10 years. The FTA also is to provide fully

reciprocal market access for U.S. textile and apparel producers; both parties are to eliminate

tariffs on the same schedule on a product-by-product basis and, for the majority of products,

tariffs are to be eliminated either immediately or in five years (provisions with respect to

textiles and apparel are discussed in more detail below).
9

 Ibid.

10 USTR, “United States and Oman Sign Free Trade Agreement,” press release, Jan. 19, 2006. 11 Data available from USITC Data Web.

12 The Arab League (Algeria, Bahrain, Comoros, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon,

Libya, Mauritania, Morocco, Oman, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, the UAE, Yemen, and

the Palestinian Authority) has policies that prohibit the importation of Israeli-origin goods and services and

prohibit business dealings with firms that do business with Israel. Not all Arab League members apply this

boycott of Israel. The United States opposes the boycott, and U.S. government officials have urged Arab League

members to end its enforcement of the boycott. USTR, “Arab League,” 2006 National Trade Estimate on

Foreign Trade Barriers, p. 8. 13 The United States initiated FTA negotiations with Peru, Colombia, and Ecuador in May 2004. The

agreement was drafted as a multiparty agreement since Colombia and Ecuador have also been part of the

negotiation. USTR, “United States and Peru Conclude Free Trade Agreement,” press release, Dec. 7, 2005. 14 USITC, U.S.-Peru Trade Promotion Agreement: Potential Economywide and Selected Sectoral

Effects, investigation No. TA-2104-20, USITC publication 2855, June 2006. 15 USTR, “Peru TPA Facts: Free Trade with Peru—Brief Summary of the U.S.-Peru Trade Promotion

Agreement,” fact sheet, December 2005.

4-4

Under the FTA, Oman is to accord substantial access to U.S. service suppliers, including

audiovisual; express delivery; telecommunications; computer and related services;

distribution; healthcare; services incidental to mining; construction; architecture; and

engineering.9

 The FTA also is to give providers of U.S. financial services the right to

establish subsidiaries, branches, and joint ventures in Oman; to expand their operations

throughout Oman; and to offer the full range of financial services. The FTA is to establish

improved protections for trademarks, copyrights, patents, and trade secrets; commitments

of both parties of nondiscriminatory treatment of digital products; and commitments of both

parties not to impose customs duties on digital products transmitted electronically.10

In 2005, U.S. merchandise exports to Oman were valued at $562 million, and U.S.

merchandise imports from Oman were valued at $484 million. Leading U.S. exports to Oman

in 2005 included automobiles; aircraft; machinery parts; turbojets, turbopropellers, and other

gas turbines; and air or vacuum pumps. Leading U.S. imports from Oman included

petroleum oils, gases, and coke; and textiles and apparel.11 The United States and Oman

signed a bilateral investment treaty in July 2004. Oman does not apply the Arab League

boycott of Israel.12

U.S.-Peru Trade Promotion Agreement

The United States and Peru announced the successful conclusion of FTA negotiations on

December 7, 2005.13 The two parties signed the agreement, known as the U.S.-Peru Trade

Promotion Agreement (TPA), on April 12, 2006. The Commission’s report on the

agreement, in accordance with section 2104(f) of the Trade Act of 2002, was published in

June 2006.14

Approximately 80 percent of U.S. exports of consumer and industrial products to Peru are

to become duty free immediately upon entry into force of the U.S.-Peru TPA, with tariffs on

the remaining products to be phased out over 10 years. Two-thirds of U.S. exports of

agricultural products to Peru are to become duty free immediately upon entry into force of

the agreement, and Peru’s tariffs on all agricultural products are to be phased out within 17

years. Qualifying textiles and apparel articles are to be duty free and quota free immediately

upon entry into force of the agreement (provisions with respect to textiles and apparel are

discussed in more detail below).15
16 Ibid.

17 Data for 6-digit HTS available from USITC Data Web.

18 The Andean Trade Preference Act is discussed in chapter 2 of this report. 19 The United States initiated FTA negotiations with Peru, Colombia, and Ecuador in May 2004. The

agreement was drafted as a multiparty agreement because Peru and Ecuador have also been part of the

negotiations. USTR, “United States and Colombia Conclude Free Trade Agreement,” press release, Feb. 27,

2006. 20 USTR, “Trade Facts: Free Trade with Colombia—Brief Summary of the Agreement,” fact sheet,

Feb. 27, 2006. 21 Ibid.

4-5

Other provisions of the agreement include expanded market access across Peru’s entire

services regime and new protection for U.S. investors. The agreement is to provide improved

standards for IPR protection and enforcement, including state-of-the-art protection for digital

products such as U.S. software, music, text, and videos; stronger protection for U.S. patents,

trademarks, and test data; and further deterrence against piracy and counterfeiting by

criminalizing end-user piracy. The two parties also commit to new e-commerce provisions

that provide, among other things, nondiscriminatory treatment of digital products.16

In 2005, U.S. merchandise exports to Peru totaled $2.0 billion and U.S. merchandise imports

from Peru were valued at $5.1 billion. Leading U.S. exports to Peru in 2005 included

petroleum oils, machinery parts, wheat, computer parts and accessories, and polyethylene.

Leading U.S. imports from Peru in 2005 included gold, copper, light petroleum oils, and

textiles and apparel articles.17 Many Peruvian products already enter the U.S. market duty

free under the Andean Trade Preference Act.18

U.S.-Colombia Trade Promotion Agreement

The United States and Colombia announced the successful conclusion of negotiations for an

FTA, known as the U.S.-Colombia Trade Promotion Agreement, on February 27, 2006.19

More than 80 percent of U.S. exports of consumer and industrial products to Colombia are

to be duty free immediately upon entry into force of the U.S.-Colombia TPA, with remaining

tariffs to be eliminated within 10 years. Many U.S. agricultural exports to Colombia are to

receive immediate duty-free treatment, including high-quality beef; cotton; wheat; soybean

meal; some fruits and vegetables; and processed food products including frozen french fries

and cookies. Qualifying textiles and apparel articles are to be duty free and quota free

immediately upon entry into force of the agreement (provisions with respect to textiles and

apparel are discussed in more detail below).20

Other provisions of the agreement include expanded market access across Colombia’s entire

services regime and new protection for U.S. investors. The agreement is to provide improved

standards for IPR protection and enforcement, including state-of-the-art protections for

digital products such as U.S. software, music, text, and videos; stronger protection for U.S.

patents, trademarks, and test data; and further deterrence against piracy and counterfeiting

by criminalizing end-user piracy. The two parties also commit to new e-commerce

provisions that provide, among other things, nondiscriminatory treatment of digital

products.21

In 2005, U.S. merchandise exports to Colombia totaled $5.0 billion and U.S. merchandise

imports from Colombia were valued at $8.8 billion. Leading U.S. exports to Colombia in

2005 included corn, vinyl chloride, petroleum oils, and wheat. Leading U.S. imports from
22 Data for 6-digit HTS available from USITC Data Web.

23 The Andean Trade Preference Act is discussed in chapter 2 of this report. 24 The agreements contain a special textile safeguard that will provide for temporary tariff relief, if

imports under an agreement prove to be damaging to domestic producers. U.S. textile and apparel imports in

2005 totaled $54 million for Oman, $821 million for Peru, and $618 million for Colombia (data from the U.S.

Department of Commerce, Major Shippers Report, http://otexa.ita.doc.gov). 25 In general, the manufacturing process in the textile sector is as follows: (1) fibers are made into

yarns, (2) yarns are made into fabrics, (3) fabrics are cut into components, and (4) cut components are sewn into

apparel and other finished goods. 26 This differs from the application of the rules of origin under AGOA, ATPDEA, and CBTPA in which

the rules of origin apply to all fabric components of a garment. AGOA, ATPDEA, and CBTPA are discussed

in chapter 2 of this report. 27 TPLs provide duty preferences for specified quantities of certain nonoriginating goods (i.e., goods

that do not meet the FTA rules of origin because they are made of yarns and fabrics from countries other than

(continued...)

4-6

Colombia in 2005 included petroleum oils, coal, coffee, and cut flowers and buds.22 Many

Colombian products already enter the U.S. market duty free under the Andean Trade

Preference Act.23

Textile and Apparel Provisions of Agreements with Oman, Peru, and

Colombia

The U.S. FTA with Oman and TPAs with Peru and Colombia generally provide for

immediate duty-free treatment for most textiles and apparel that meet the rules of origin

specified in the agreements (“originating goods”).24 The rules of origin for textile and apparel

articles generally are based on a “yarn-forward” rule, which requires that imports of such

goods from an agreement party be made there or in the United States from the yarn stage

forward to qualify for duty preferences. Under the “yarn-forward” rule, only the fibers may

be made in a third country (nonoriginating).25 A “fiber-forward” rule applies to a few goods

(mainly yarns and knit fabrics), which must be made in an agreement party from the fiber

stage forward.

The textile and apparel rules of origin in these agreements generally apply only to the

component that determines the tariff classification of the garment—that is, the component

that provides the garment its “essential character” or otherwise provides the basis for

classification.26 As such, a garment subject to the “yarn-forward” rule is to be eligible for

FTA preferences if the component that determines the tariff classification of the good is

made of originating fabric and yarn, without regard to the source of any collar, cuffs, or most

other components included in the garment. The agreements contain a de minimis foreign

content rule that is to permit up to 7 percent or 10 percent of the total weight of the

component that determines the tariff classification of the good to consist of third-country

fibers or yarns, except for elastomeric yarns, which must be made in an agreement party.

U.S.-Oman FTA

The FTA is to grant immediate duty-free market access to most textile and apparel articles

that meet the agreement’s “yarn forward” rules of origin. The exceptions are to apply for a

few cotton garments (ensembles, robes, negligees, track suits, sweaters, and men’s briefs)

and certain home textiles (blankets and bed, bath, and kitchen linens) that are to be subject

to 5-year staging, and certain wool goods that are to be subject to 10-year staging. A tariff

preference level (TPL)27 is to grant the same duty preferences for originating apparel to
27 (...continued)

the United States and the FTA partner). 28 ATPDEA preferences in the textile and apparel sector apply only to qualifying apparel, textile

luggage and handbags, and certain hand-loomed, handmade, and folklore textiles. 29 ATPDEA preferences apply to apparel and a few textiles (textile luggage and handloomed,

handmade, and folklore items). 30 The following are the provisions regarding textiles and apparel of the U.S.-Colombia FTA negotiated

as of Feb. 27, 2006. 31 Most of the information in this paragraph is from USTR, “Trade Facts: Free Trade with Colombia,

Summary of the Agreement” Feb. 27, 2006, p. 2.

4-7

apparel made in Oman from third-country fabrics and yarns, not to exceed a total of 50

million square meter equivalents (SMEs) per year for the first 10 years of the FTA, after

which the TPL is to be eliminated. U.S. apparel imports from Oman totaled 16 million SMEs

in 2005.

U.S.-Peru TPA

The U.S.-Peru TPA enhances and makes permanent and reciprocal the trade preferences

established by ATPDEA for apparel and, for the first time, extends trade preferences to

textiles.28 The agreement is to immediately eliminate all tariffs on U.S. trade with Peru in

originating textiles and apparel, thereby making permanent the duty-free benefits currently

available under ATPDEA for almost all U.S. imports of Peruvian apparel.29 The agreement

is to grant duty-free benefits for the first time to U.S. imports of textiles from Peru and to

U.S. exports of textiles and apparel to Peru. Aside from the 10 percent de minimis foreign

content rule, the agreement does not contain certain provisions found in other recent U.S.

FTAs that would expand opportunities for the parties to use third-country inputs, such as

TPLs and cumulation. The agreement also is to grant duty-free entry to apparel made in Peru

from yarns and fabrics that are not available in the United States or Peru in commercial

quantities in a timely manner, regardless of the origin of the fabrics or yarns. The parties to

the agreement agreed to a list of 20 yarns and fabrics in short supply; the agreement provides

an expedited process to add other inputs to, or remove an input from, the list.

U.S.-Colombia TPA30

The U.S.-Colombia TPA is to grant immediate duty-free market access to most textile and

apparel articles that meet the agreement’s “yarn forward” rules of origin.31 Like the U.S.-

Peru TPA, the agreement with Colombia does not make use of TPLs. After entry into force,

exceptions to the rules of origin are to be provided through “an expedited short supply

process” that is to grant duty-free entry to apparel made in Colombia from yarns and fabrics

that are not available in the United States or Colombia in commercial quantities in a timely

manner, regardless of the origin of the fabrics or yarns. The parties agree to a list of 20 yarns

and fabrics in short supply. The agreement includes a de minimis foreign content rule that

provides some flexibility to textile and apparel producers in both countries by allowing

limited amounts of “specified third-country content” to be used. Finally, a textile safeguard

provision is to provide for temporary tariff relief if textile and apparel imports from

Colombia should injure U.S. producers.
32 Countries negotiating the FTAA include all of the countries of the Western Hemisphere except Cuba.

The FTAA negotiations were formally launched in April 1998, and market access negotiations began in May

2002. Additional information is available at the official FTAA Web site, http://www.ftaa-alca.org/alca_e.asp. 33 These target deadlines were established during the December 1994 First Summit of the Americas.

For a description of FTAA developments through 2004, see USITC, The Year in Trade, 2004, USITC publication

3779, July 2005, p. 4-7, and prior reports in this series. 34 Trade ministers of the respective FTAA countries are responsible for the ultimate oversight and

management of the negotiations. The trade ministers established the TNC at the vice-ministerial level to provide

direct guidance and administrative responsibilities for the FTAA negotiations. Additional information on the

TNC is available at the official FTAA Web site, http://www.ftaa-alca.org/TNC_e.asp. 35 GAO, Free Trade Area of the Americas: Missed Deadline Prompts Efforts to Restart Stalled

Hemispheric Trade Negotiations: Report to the Chairman, Committee on Finance, U.S. Senate and to the

Chairman, Committee on Ways and Means, House of Representatives, GAO-05-166, March 2005, pp. 2-3.

4-8

Free Trade Area of the Americas

The United States and 33 other Western Hemisphere countries negotiating for the creation

of the FTAA32 did not meet their target deadlines of concluding negotiations by January

2005 and having the FTAA enter into force no later than December 2005.33 Progress in the

FTAA negotiations slowed during 2004, and negotiations were at an impasse during 2005.

By year-end 2005, no consensus had been reached with respect to the scope and the timing

of the FTAA negotiations. In 2005, combined U.S. merchandise exports to the other 33

FTAA countries totaled $347.5 billion, and U.S. merchandise imports were valued at $574.3

billion. NAFTA partners Canada and Mexico accounted for approximately 80 percent of that

trade.

The Trade Negotiations Committee (TNC) is responsible for directing the FTAA

negotiations.34 The TNC held no formal meetings during 2005, compared to one TNC

meeting in 2004, and four TNC meetings during 2003. According to a March 2005 report

by the U.S. Government Accountability Office, this impasse in the negotiations was

attributable to three factors:

• The United States and Brazil have made little progress in resolving basic

differences on key negotiation issues, namely, the Brazilian desire that

agricultural subsidies and trade remedies be addressed and that the FTAA result

in meaningful new market access for Brazilian agricultural exports, and U.S.

desires for more stringent IPR enforcement, new rules on government

procurement and investment protection, and greater market access for U.S.

services.

• Member governments have shifted energy and engagement from the FTAA to

bilateral and multilateral trade agreements.

• Mechanisms intended to facilitate progress in the FTAA negotiations, such as

the U.S. and Brazilian co-chairmanship, have thus far failed to do so.35

The year 2005 was the third year of the U.S. and Brazilian co-chairmanship of the TNC. U.S.

and Brazilian representatives met in February, May, and November 2005 to discuss how to

move forward in the FTAA negotiations. At the end of their third meeting, President Bush

and Brazilian President Luiz Inácio Lula da Silva issued a joint statement that “underscored

the increasingly strong and close ties” between the two countries and
36 The White House, Office of the Press Secretary, “Joint Statement on the Occasion of the Visit by

President George W. Bush to Brazil,” Nov. 6, 2005. 37 “Declaration of Mar Del Plata: Mar del Plata, Argentina, November 5, 2005,” available at the official

FTAA website, http://www.ftaa-alca.org/TNC_e.asp. 38 Ibid.

39 Ibid.

40 U.S. bilateral relations with Canada and Mexico are described in chapter 5 of this report. 41 These are the U.S. Trade Representative, the Canadian Minister for International Trade, and the

Mexican Secretary of Economy.

4-9

“reaffirmed their commitment to the FTAA process . . . [and] the timely resumption of the

 negotiations.”36

The heads of state of the Western Hemisphere held their fourth Summit of the Americas

meeting on November 4–5, 2005, in Mar del Plata, Argentina. In the ministerial declaration

issued at the summit meeting, leaders acknowledged the contribution that economic

integration can make to achieve the summit objectives of creating jobs, fighting poverty, and

strengthening democratic governance.37 The United States joined the majority of the

countries that “remain committed to the achievement of a balanced and comprehensive

FTAA Agreement,” and called for trade officials to resume their meetings in 2006 to

examine and overcome the difficulties in the FTAA process and advance the FTAA

negotiations.38 However, other countries expressed the view that “the necessary conditions

are not yet in place for achieving a balanced and equitable free trade agreement with

effective access to markets free from subsidies and trade-distorting practices, and that takes

into account the needs and sensitivities of all partners.”39 In view of the divergent positions,

leaders agreed “to explore both positions in light of the outcomes of the next World Trade

Organization ministerial meeting.”

North American Free Trade Agreement40

NAFTA came into effect January 1, 1994. In 2005, total two-way (exports plus imports) U.S.

merchandise trade with NAFTA partners increased by 11.2 percent over 2004, with U.S.-

Canada merchandise trade totaling $470.8 billion and U.S.-Mexico merchandise trade

totaling $270.9 billion in 2005 (table 4-3). The U.S. merchandise trade deficit with NAFTA

partners increased for a fifth consecutive year, by 11.3 percent in 2005, a rate lower than the

19.4 percent of the previous year. The U.S. merchandise trade deficit with NAFTA partners

increased to $171.8 billion in 2005 from $154.4 billion in 2004.

The following sections describe the major activities of the NAFTA Free Trade Commission

(FTC), the Commission for Labor Cooperation (CLC), the Commission for Environmental

Cooperation (CEC), and dispute settlement activities under NAFTA chapters 11 and 19

during 2005.

Free Trade Commission

The FTC is the central oversight body for NAFTA. It is chaired jointly by representatives

from the three member countries.41 The FTC is responsible for overseeing implementation

and elaboration of NAFTA, as well as for its dispute settlement provisions.
42 Presidential Proclamation 7870—To Modify Rules of Origin Under the North American Free Trade

Agreement, Federal Register (70 FR 7611), February 14, 2005. The effective date for the modifications for

goods of Canada is, on or after January 1, 2005, and for goods of Mexico is June 15, 2005. Federal Register (70

FR 37146), June 28, 2005. The modifications affect certain goods in the following HTS chapters: spices (HTS

chapter 9), oil seeds and oleaginous fruits (HTS chapter 12), gums, resins and other vegetables saps and extracts

(HTS chapter 13), miscellaneous edible preparations (HTS chapter 21), jewelry (HTS 71), electrical machinery

(HTS chapter 85), measuring devices and instruments (HTS chapter 90), and toys (HTS chapter 95). 43 Presidential Proclamation 7912—To Modify Duty-Free Treatment Under the Generalized System

of Preferences and Certain Rules of Origin Under the North American Free Trade Agreement, and for Other

Purposes, Federal Register (70 FR 37959), June 30, 2005; and Office of Textiles and Apparel (OTEXA),

http://otexa.ita.doc.gov/nafta_short_supply.htm. The effective date for the modifications is July 1, 2005. The

modifications affect certain textiles including filament yarns of viscose rayon, dry-spun acrylic staple fibers, trilobal rayon staple fiber, certain nylon filament yarn, yarn from combed fine animal hair, and certain synthetic

acid-dyeable acrilic tow. The short supply provisions in the NAFTA allow the use of non-North American fibers,

yarns, or fabrics when such products cannot be supplied by North American producers in commercial quantities

in a timely manner. 44 USTR, “North American Free Trade Agreement,” 2006 Trade Policy Agenda and 2005 Annual

Report, Mar. 1, 2006. 45 Ibid.

4-10

Table 4–3 U.S. merchandise trade with NAFTA partners, 2003–05

(Billion dollars)

Year NAFTA partner Exports Imports Trade balance

Two-way trade

(exports plus

imports)

2005 Canada 183.2 287.5 -104.3 470.8

Mexico 101.7 169.2 -67.5 270.9

Canada and Mexico 284.9 456.7 -171.8 741.7

2004 Canada 163.2 255.7 -92.5 418.8

Mexico 93.0 155.0 -61.9 248.0

Canada and Mexico 256.2 410.6 -154.4 666.8

2003 Canada 148.7 224.0 -75.3 372.8

Mexico 83.1 137.2 -54.1 220.3

Canada and Mexico 231.9 361.2 -129.4 593.1

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

Note: Because of rounding, figures may not add to totals shown.

In 2005, following approval by the FTC, the member countries implemented changes to the

NAFTA rules of origin covering approximately $20 billion in trilateral trade.42 The member

countries also implemented modifications to the NAFTA textile rules of origin that amended

the short supply provisions43—the first set of changes to those provisions of NAFTA.44 The

FTC also asked that their officials to continue considering new requests for changes to the

rules of origin from consumers and producers; and to examine the rules of origin in the FTAs

that each country negotiated after NAFTA, to determine whether those rules should be

applied to NAFTA. In December 2005, the NAFTA Working Group on Rules of Origin

agreed on further changes to the rules of origin, which it aims to implement in 2006.

Together, these changes will cover approximately $50 billion in total trilateral trade.45

In March 2005, the NAFTA Working Group on Textiles and Apparel delivered a report to

the FTC analyzing the current situation of the textile and apparel industries in North

America, as well as the challenges that these industries are facing in light of increasing

competition from other countries and the elimination of quantitative restrictions on January
46 NAFTA Working Group on Textiles and Apparel, “Report from the Trilateral Working Group on

Textiles and Apparel to the NAFTA Free Trade Commission,” Mar. 7, 2005. 47 USTR, “North American Free Trade Agreement,” 2006 Trade Policy Agenda and 2005 Annual

Report. 48 For additional information, see CLC, “The National Administrative Offices,”

http://www.naalc.org/english/nao.shtml. 49 OTAI was known as the National Administrative Office (NAO) until 2004. OTAI is located in the

U.S. Department of Labor, Bureau of International Labor Affairs. See OTAI, “The Office of Trade Agreement

Implementation,” http://www.dol.gov/ilab/programs/nao/main.htm. 50 CLC, “Description of Submission Procedures,” 

http://www.naalc.org/english/review_annex1_3.shtml. 51 For information on the submissions and the status of the submissions under NAALC, see U.S.

Department of Labor, Bureau of International Labor Affairs, http://www.dol.gov/ilab/programs/nao/status.htm. 52 Ibid.

53 Ibid.

54 Ibid.

4-11

1, 2005, in accordance with the ATC.46 The report outlines the policy tools that the three

governments have at their disposal to address the challenges of the new international

environment and presents a set of recommendations for future work in this area.47

Commission for Labor Cooperation

The CLC was created under the North American Agreement on Labor Cooperation

(NAALC), a supplemental agreement to NAFTA that aims to promote effective enforcement

of domestic labor laws and foster transparency in their administration. The CLC is

responsible for the implementation of the NAALC, and comprises the Ministerial Council

and the Secretariat. Each NAFTA partner has established an office within its ministry of

labor to serve as the contact point for information, to examine labor concerns, and to

coordinate cooperative work programs.48 In the United States, that office is the Office of

Trade Agreement Implementation (OTAI).49 If the OTAI determines that a violation of the

agreement has occurred, the matter is then referred to the CLC council to hold ministerial

consultations with the respective party to resolve the issue.50

The NAALC provides for the review of public submissions related to the labor laws of the

NAFTA partners.51 In 2005, three public submissions were presented to the OTAI

concerning Mexico. On October 14, 2005, several organizations representing Mexican textile

and apparel sector workers filed a petition (U.S. submission 2005-03) concerning the

enforcement of labor laws in Mexico. On May 27, 2005, the Airline Pilot’s Association of

Mexico filed a petition (U.S. submission 2005-02) concerning the enforcement of Mexico’s

labor laws. On February 17, 2005, labor unions from Canada, Mexico, and the United States

filed a petition (U.S. submission 2005-01) concerning proposed reforms to Mexican labor

laws.52

During 2005, one submission was presented to the Mexican National Administrative Office

(NAO) concerning the United States, and one to the Canadian NAO concerning Mexico. On

April 13, 2005, representatives of a group of migrant workers filed a petition (Mexico NAO

submission 2005-1) concerning rights of migrant workers in Idaho under the H-2B visa

program. On May 31, 2005, a group of pilots supported by the Mexican Airlines Pilots

Union filed a petition (Canadian NAO submission 2005-1) concerning the enforcement of

Mexican labor laws.53At the end of 2005, determinations as to whether to accept and review

the five submissions were pending in all of the cases filed during 2005.54
55 U.S. Department of Labor, Bureau of International Affairs, “Trinational Conference on the Labor

Dimensions of Corporate Social Responsibility in North America,” March 30–31, 2005, Ottawa, Canada,

http://www.dol.gov/ilab/programs/coopact/sectcoopact.htm. 56 U.S. Department of Labor, Bureau of International Affairs, “IV Joint Regional Training Seminar

DOL/USDA SRE East Region Atlanta,” November 7–8, 2005, Atlanta, Georgia,

http://www.dol.gov/ilab/programs/coopact/sectcoopact.htm. 57 USTR, “NAFTA and Labor,” 2006 Trade Policy Agenda and 2005 Annual Report. 58 The CEC council consists of the Canadian Environment Minister, the Mexican Secretary for

Environment and Natural Resources, and the U.S. Environmental Protection Agency Administrator. CEC, “Who

We Are,” http://www.cec.org/who_we_are/council/index.cfm?varlan=english. 59 USTR, “NAFTA and the Environment,” 2006 Trade Policy Agenda and 2005 Annual Report. 60 NAAEC articles 14 and 15. CEC, “Laws, Treaties and Agreements,”

http://www.cec.org/pubs_info_resources/law_treat_agree/naaec/index.cfm?varlan=english.

4-12

In March 2005, as part of their ongoing program of trilateral cooperation under the NAALC,

the United States, Mexico, and Canada presented a conference on the Labor Dimensions of

Corporate Social Responsibility in North America, hosted by the Canadian NAO in Ottawa,

Canada.55 The goals of the conference were to promote awareness of the benefits and

challenges of corporate social responsibility (CSR) initiatives in North America, examine

private-sector examples of best practices in CSR, and explore the potential roles of

governments in supporting CSR initiatives. Additionally, in November 2005, the United

States and Mexico sponsored a joint regional seminar in Atlanta, Georgia,56 to familiarize

Mexican consulates in the United States with U.S. labor laws and regulations related to

migrant workers and to encourage continued collaboration between the two countries on

Mexican migrant workers in the United States.57

Commission for Environmental Cooperation

The CEC was established under the North American Agreement on Environmental

Cooperation (NAAEC), a supplemental agreement to NAFTA designed to ensure that trade

liberalization and efforts to protect the environment are mutually supportive. The CEC

oversees the work of the NAAEC and is composed of (1) the Council, the governing body

of the CEC, made up of the environmental ministers from the United States, Canada, and

Mexico;58 (2) the Joint Public Advisory Committee, made up of five private citizens from

each of the NAFTA parties; and (3) the Secretariat, made up of professional staff, located

in Montreal, Canada.59

Articles 14 and 15 of the NAAEC are intended to provide citizens and nongovernmental

organizations with a mechanism to aid in enforcing environmental laws in the NAFTA

countries. Article 14 governs alleged violations submitted for review by the CEC. It sets

forth specific guidelines regarding the nature of valid submissions and appropriate

complaining parties. Article 15 outlines the Secretariat’s obligations in considering the

submissions and publishing findings in the factual record.60 Under article 14, 10 files

remained active in 2005, 2 of which were submitted in 2005 (table 4-4). There were 11

active files during 2005 based on citizen submissions under article 15, 5 involved Canada,

5 involved Mexico, and 1 involved the United States (table 4-5). A final factual record was

published on July 26, 2005, for a submission first filed in 2000 with respect to Mexico.
4-13

Table 4–4 Active files through 2005, under article 14 of the North American Agreement on Environmental

Cooperation 

Name Case First Filed Country Status

Ontario Logging SEM-02-001 Feb. 6, 2002 Canada The Secretariat posted a request for information relevant

to the factual record on its Web site in June 2004.

Pulp and Paper SEM-02-003 May 8, 2002 Canada The Secretariat posted a request for information relevant

to the factual record on its Web site in March 2004.

Lake Chapala II SEM-03-003 May 23, 2003 Mexico The Secretariat informed Council that the Secretariat

considers that the submission warranted development of

a factual record in May, 2005.

Alca-Iztapalapa II SEM-03-004 June 17,

2003

Mexico The Secretariat posted a request for information relevant

to the factual record on its Web site in November, 2005.

Montreal

Technoparc

SEM-03-005 Aug. 14,

2003

Canada The Secretariat posted a request for information relevant

to the factual record on its Web site in February 2005.

Coal-fired Power

 Plants

SEM-04-005 Sept. 20,

2004

United

States

The Secretariat informed Council that the Secretariat

considers that the submission warranted development of

a factual record in December 2005.

Ontario Logging II SEM-04-006 Oct. 12, 2004 Canada The Secretariat placed a work plan on its Web site or

otherwise made it available to the public and stakeholders

in April 2005.

Quebec

Automobiles

SEM-04-007 Nov. 3, 2004 Canada The Secretariat informed Council that the Secretariat

considers that the submission warranted development of

a factual record in May 2005.

Coronado Islands SEM-05-002 May 3,2005 Mexico The Secretariat received a response from the concerned

government party and began considering whether to

recommend a factual record in January 2006.

Environmental 

Pollution in

Hermosillo II 

SEM-05-003 Aug. 30,

2005

Mexico The Secretariat received a response from the concerned

government party and began considering whether to

recommend a factual record in February 2006.

Source: North American Commission for Environmental Cooperation,

http://www.cec.org/citizen/index.cfm?varlan=english.

Table 4–5 Citizen submissions on enforcement under article 15 of the North American Agreement on Environmental

Cooperation, submissions active during 2005

Name Case First Filed Country Statusa

Environmental Pollution in Hermosillo II SEM-05-003 Aug. 30, 2005 Mexico Open

Coronado Islands SEM-05-002 May 3, 2005 Mexico Open

Quebec Automobiles SEM-04-007 Nov. 3, 2004 Canada Open

Ontario Logging II SEM-04-006 Oct. 12, 2004 Canada Open

Coal-fired Power Plants SEM-04-005 Sept. 20, 2004 United States Open

Montreal Technoparc SEM-03-005 Aug. 14, 2003 Canada Open

ALCA-Iztapalapa II SEM-03-004 June 17, 2003 Mexico Open

Lake Chapala II SEM-03-003 May 23, 2003 Mexico Open

Pulp and Paper SEM-02-003 May 8, 2002 Canada Open

Ontario Logging SEM-02-001 Feb. 6, 2002 Canada Open

Tarahumara SEM-00-006 June 9, 2000 Mexico July 26, 2005

Source: North American Commission for Environmental Cooperation,

http://www.cec.org/citizen/status/index.cfm?varlan=english.

a Status as of Dec. 30, 2005. Date indicates date of publication of final factual record.
61 “CEC Ministerial Statement,” Twelfth Regular Session of the CEC Council, Quebec, Canada, June

22, 2005; “Strategic Plan of the Commission for Environmental Cooperation 2005–2010,” June 17, 2005, p. 9;

and U.S. Department of State telegram, “12th Regular Session of the CEC Council, Quebec City, June 21–22,

2005,” July 7, 2005, message reference No. 2047, prepared by the U.S. Embassy, Ottawa, Canada. 62 USTR, “Other Multilateral Activities,” 2006 Trade Policy Agenda and 2005 Annual Report. 63 CEC, “Third North American Symposium on Assessing the Environmental Effects of Trade,

Investment, Growth, and the Environment,” http://www.cec.org/symposium/. 64 USTR, “NAFTA and the Environment,” 2006 Trade Policy Agenda and 2005 Annual Report. 65 “BECC-COCEF Joint Status Report,” Sept. 30, 2005, http://www.cocef.org/ingles.php. 66 Ibid.

67 NAFTA Secretariat, “Overview of the Dispute Settlement Provisions of the North American Free

Trade Agreement (NAFTA),” http://www.nafta-sec-alena.org/DefaultSite/index_e.aspx?DetailID=8#chap11.

4-14

At its annual ministerial session in June 2005, the CEC council adopted a five-year strategic

plan to focus on three priority concerns: the development of information for decision

making, support for capacity building with a special emphasis on Mexico, and ongoing work

to address trade and environment issues more effectively to promote environmental

protection and sustainability.61 This strategic plan identifies six CEC initiatives for the period

2005–2010: (1) promote the North American renewable energy market; (2) promote and

facilitate the enforcement of environmental laws; (3) continue environmental assessments

of trade liberalization in North America; (4) promote North American markets for

environmentally friendly products; (5) promote better use of market-based mechanisms for

environmental protection and sustainable use; and (6) reduce environmental and economic

harm caused by invasive alien species.62

The goals of the CEC environment, economy, and trade program are to understand the

environmental impact of free trade and economic integration in North America; to identify

opportunities for cooperation and trade in environmental goods and services; and to

strengthen partnerships with the private financial services sector in the area of finance and

the environment. The CEC sponsored the third North American Symposium on Assessing

the Environmental Effects of Trade in 2005. Eleven papers were presented on topics ranging

from the maquiladora industry in Mexico to Chapter 11 arbitration in NAFTA countries.63

U.S.-Mexico cooperation on arrangements to help border communities with environmental

infrastructure projects to further the goals of NAFTA and the NAAEC dates to 1993.64 The

Border Environment Cooperation Commission and the North American Development Bank

(NADB) are now working with more than 130 communities throughout the Mexico-U.S.

border region to address their environmental infrastructure needs.65 As of September 30,

2005, the NADB participation totaled $704 million in loans and grants to partially finance

90 infrastructure projects estimated to cost a total of $2.3 billion.66

Dispute Settlement

NAFTA contains dispute settlement provisions covering a variety of areas.67 Developments

during 2005 are described below with respect to NAFTA chapter 11 investor-state disputes

and chapter 19 binational reviews of final determinations of antidumping and countervailing

cases. Table A-21 presents an overview of developments in NAFTA dispute settlement cases

to which the United States was a party in 2005.
68 Such as the International Centre for the Settlement of Investment Disputes (ICSID) at the World

Bank or Rules of the United Nations Commission for International Trade Law (UNCITRAL Rules). 69 NAFTA Secretariat, “Overview of the Dispute Settlement Provisions.” 70 U.S. Department of State, “NAFTA Investor–State Arbitrations: Cases Filed Against the United

States of America,” http://www.state.gov/s/l/c3741.htm. 71 U.S. Department of State, “NAFTA Investor–State Arbitrations: Cases Filed Against the Government

of Canada,” http://www.state.gov/s/l/c3740.htm. 72 U.S. Department of State, “NAFTA Investor–State Arbitrations: Cases Filed Against the United

Mexican States,” http://www.state.gov/s/l/c3742.htm. 73 Ibid.

4-15

Chapter 11 Dispute-Settlement Developments

NAFTA chapter 11 contains provisions designed to protect cross-border investors and

facilitate the settlement of investment disputes. An investor who alleges that a NAFTA

country has breached its investment obligations under chapter 11 may pursue arbitration

through internationally recognized channels68 or remedies available in the host country’s

domestic courts under chapter 11. A key feature of the chapter 11 provisions is the

enforceability in domestic courts of final awards made by arbitration tribunals.69

There were developments in eight active chapter 11 cases filed against the United States by

Canadian investors in 2005.70 There were no active chapter 11 cases filed against Canada

during 2005.71 Six chapter 11 cases filed by U.S. and Canadian investors against Mexico

were ongoing during 2005.72

Chapter 19 Dispute Panel Reviews

NAFTA chapter 19 establishes a mechanism that provides for review by a binational panel

of final determinations made by a national investigating authority in antidumping and

countervailing duty cases. A panel may be established at the request of an involved NAFTA

country.73

Six binational panels were formed in 2005. The NAFTA Secretariat listed 31 binational

panels active at the end of 2005 (table 4-6). Three of the panels formed in 2005 challenged

U.S. agency determinations on products from Canada, and two challenged U.S. agency

determinations on products from Mexico. One 2005 panel challenged a Mexican agency

determination concerning a product from the United States.
4-16

Table 4–6 NAFTA Chapter 19 binational panels, active reviews in 2005

Country Case National agencies' final determinationa Product description

Canada

No active chapter 19 cases.

Mexico

MEX-USA-2000-1904-02 SECOFI Final Antidumping Duty Determination

Bovine carcasses and half 

 carcasses, fresh or chilled

 originating in the United States

MEX-USA-2003-1904-01 SE Final Countervailing Duty Determination

Imports of sodium hydroxide (caustic

 soda) originating in the United

 States

MEX-USA-2003-1904-02 SE Final Countervailing Duty Determination

Fresh Red Delicious and Golden

 Delicious apples, originating in the

 United States

MEX-USA-2005-1904-01 SE Final Countervailing Duty Determination Imports of carbon steel tubing with 

 straight longitudinal seam from the

 United States

MEX-USA-2006-1904-01 SE Final Countervailing Duty Determination

Imports of pork originating in the 

 United States

United States

USA-CDA-2000-1904-09 USITC Final Results of the Five-Year Reviews of the

 Countervailing Duty and Antidumping Duty Orders

Magnesium from Canada

USA-CDA-2002-1904-02

USDOC Final Determination of Sales at Less Than

 Fair Value

Certain softwood lumber products

 from Canada

USA-CDA-2002-1904-03

USDOC Final Affirmative Countervailing Duty 

 Determination and Final Negative Critical

 Circumstances Determination

Certain softwood lumber products

 from Canada

USA-CDA-2003-1904-05 USDOC Final Affirmative Countervailing Duty

 Determination

Certain Durum wheat and Hard Red

 Spring wheat from Canada

USA-CDA-2004-1904-01 USDOC Final Results of Countervailing Duty

 Administrative Reviews

Pure magnesium and alloy

 magnesium from Canada

USA-CDA-2005-1904-01 USDOC Final Results of Countervailing Duty

 Administrative Review and Rescission of Certain

 Company-Specific Reviews

Certain softwood lumber products

 from Canada

USA-CDA-2005-1904-03 USITC Implementation of the New Determination

 under Section 129(a)(4) of the Uruguay Round

 Agreements Act

Certain softwood lumber products

 from Canada

USA-CDA-2005-1904-04 USDOC Antidumping Duty Determination under

 Section 129 of the Uruguay Round Agreements Act

Certain softwood lumber products

 from Canada

USA-CDA-2006-1904-01 USDOC Final Results of Antidumping Duty

 Administrative Review

Certain softwood lumber products

 from Canada

USA-CDA-2006-1904-02 USDOC Final Results of Countervailing Duty

 Administrative Review

Certain softwood lumber products

 from Canada

USA-MEX-1998-1904-02 USDOC Final Results of the 6th Antidumping Duty

 Administrative Review

Gray Portland cement and cement

 clinker from Mexico

USA-MEX-2000-1904-03 USDOC Final Results of the 8th Antidumping Duty

 Administrative Review

Gray Portland cement and cement

 clinker from Mexico

USA-MEX-2000-1904-05 USDOC Final Results of the Full Sunset Review of the

 Antidumping Duty Order

Gray Portland cement and cement

 clinker from Mexico

USA-MEX-2000-1904-10 USITC Final Results of the Five-Year Review of the

 Antidumping Duty Order

Gray Portland cement and cement

 clinker from Mexico

USA-MEX-2001-1904-03 USDOC Final Results of the Full Sunset Review of the

 Antidumping Duty Order

Oil country tubular goods from

 Mexico

USA-MEX-2001-1904-04 USDOC Final Results of the 9th Antidumping Duty

 Administrative Review

Gray Portland cement and cement

 clinker from Mexico

See footnote at end of table.
4-17

Table 4–6 NAFTA chapter 19 binational panels, active reviews in 2005—Continued

Country Case National agencies' final determinationa Product description

United States—Continued

USA-MEX-2001-1904-05 USDOC Final Results of the 4th Antidumping Duty

 Administrative Review and Determination Not To

 Revoke

Oil country tubular goods from

 Mexico

USA-MEX-2001-1904-06 USITC Final Results of the Five-Year Review of

 the Antidumping Duty Order

Oil country tubular goods from

 Mexico

USA-MEX-2002-1904-01 USITC Dismissal of a Request to Institute a

 Section 751(b) Investigation

Gray Portland cement and cement

 clinker from Mexico

USA-MEX-2002-1904-05 USDOC Final Results of the 10th Antidumping

 Duty Administrative Review

Gray Portland cement and cement

 clinker rom Mexico

USA-MEX-2003-1904-01 USDOC Final Results of the 11th Antidumping

 Duty Administrative Review

Gray Portland cement and cement

 clinker from Mexico

USA-MEX-2003-1904-03 USDOC Final Results of the 12th Antidumping

 Duty Administrative Review

Gray Portland cement and cement

 clinker rom Mexico

USA-MEX-2004-1904-03 USDOC Final Results of the 13th Antidumping

 Duty Administrative Review

Gray Portland cement and cement

 clinker from Mexico

USA-MEX-2005-1904-05 USDOC Antidumping Duty Order Determination Purified carboxymethylcellulose from 

 Mexico

USA-MEX-2005-1904-06 USITC Five-Year Review of the Antidumping Duty

 Order

Stainless steel sheet and strip in

 coils from Mexico

USA-MEX-2006-1904-03 USDOC Final Results of the 14th Antidumping

 Duty Administrative Review

Gray Portland cement and cement

 clinker from Mexico

Source: NAFTA Secretariat, “Status Report of Panel Proceedings,” 

http://www.nafta-sec-alena.org/DefaultSite/index_e.aspx?DetailID=11.

a In Canada, final dumping and subsidy determinations are made by Revenue Canada–Customs and Excise, and injury

determinations are made by the Canadian International Trade Tribunal. In Mexico, all determinations are made by the Secretaria de

Economia (SE) (formerly the Secretaria de Comercio y Fomento Industrial, SECOFI). In the United States, dumping and subsidy

determinations are made by the U.S. Department of Commerce (USDOC), and injury determinations are made by USITC.

1

 The 25 members of the EU are: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia,

Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands,

Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. 2

 An agreement on wine-making practices and labeling of wine was formally signed on Mar. 10, 2006.

USTR, “United States and European Community Reach Agreement on Trade in Wine,” press release, Mar. 10,

2006. 3

 USTR, “2005 Roadmap for EU-U.S. Regulatory Cooperation and Transparency,” June 20, 2005.

5-1

CHAPTER 5

U.S. Relations with Major Trading Partners

This chapter reviews U.S. bilateral trade relations with nine selected trading partners during

2005: the European Union (EU), Canada, China, Mexico, Japan, Taiwan, Korea, India, and

Russia. Tables A-22 through A-48 provide detailed information on U.S. trade with selected

partners.

European Union

The EU1 is the second largest two-way (exports plus imports) U.S. trading partner behind

the combined NAFTA market of Canada and Mexico. Apart from the combined NAFTA

market, the United States and the EU share the largest two-way trade relationship in the

world. In 2005, U.S. two-way merchandise trade with the EU-25 increased 9.0 percent over

2004 to $474.4 billion, representing nearly 20 percent of U.S. trade with the world. U.S.

exports of goods to the EU increased to $167.4 billion in 2005, up 7.5 percent from 2004.

U.S. imports of goods from the EU increased by 9.7 percent in 2005 to $307.0 billion,

resulting in a $139.6 billion trade deficit with the EU. The U.S.-EU merchandise trade deficit

in 2005 accounted for 16.3 percent of the total U.S. trade deficit. Leading U.S. exports to the

EU during the year included aircraft and aircraft parts, certain medicaments, and parts of

automated data processing machines. Leading U.S. imports from the EU included passenger

cars, certain medicaments, petroleum derivatives, and nucleic acids and their salts. U.S.-EU

merchandise trade data are shown in tables A-22 through A-24.

There were developments in at least 10 active WTO dispute settlement proceedings during

2005 in which both the United States and the EU were parties, either as the complainant or

the respondent. The more significant procedural developments in each of these cases are

listed in table A-20. Three of the cases are described in more detail below—two cases

involving alleged subsidies to civil aircraft production (one brought by the United States

against the EU with respect to alleged EU subsidies to Airbus, and one brought by the EU

with respect to alleged U.S. subsidies for Boeing), and one case brought by the EU with

respect to recently enacted U.S. legislation concerning tax treatment of foreign sales

corporations (FSCs).

In other developments, the United States and the EU reached an agreement related to wine

trade2

 and continued to make progress on regulatory cooperation to reduce technical barriers

to trade. At the bilateral summit in June 2005, officials released the 2005 Roadmap for EUU.S. Regulatory Cooperation to expand and deepen the previous year’s Roadmap by

proposing cooperative initiatives at both the economywide and sectoral levels.3

 In November

2005, the United States and the EU reached agreement on a package of trade concessions the
4

 USTR, “United States and European Communities Reach Agreement on Enlargement Compensation

Package,” press release, Nov. 30, 2005. The agreement was signed on Mar. 22, 2006 and implementation of

concessions is scheduled for no later than July 1, 2006. USTR, “United States and European Union Sign

Enlargement Compensation Agreement,” press release, Mar. 22, 2006. 5

 According to the U.S. Government, the EU member state governments of France, Germany, Spain,

and the United Kingdom have provided subsidies to their respective Airbus member companies to aid in the

development, production, and marketing of large commercial aircraft since the 1970s. USTR, 2005 National

Trade Estimate Report on Foreign Trade Barriers (NTE), p. 151 and U.S. Department of State telegram,

“Demarche to EU member states on large commercial aircraft subsidies,” message reference No. 193990,

prepared by U.S. Department of State, Washington, D.C., Sept. 9, 2004. 6

 Aircraft with more than 100 seats.

7

 For more information on the U.S.-EU 1992 agreement, see USITC, The Year In Trade 2004: OTAP,

publication 3779, p. 5-4. 8

 USTR, “U.S. Files WTO Case against EU over Unfair Airbus Subsidies,” press release, Oct. 6, 2004.

5-2

EU is to grant to the United States in compensation for higher tariffs that resulted from

enlargement of the EU to include 10 new member states on May 1, 2004.4

Aircraft Sector

The two civil aircraft cases concern respective U.S. and EU challenges under the WTO

dispute settlement process with respect to alleged subsidies to producers of large civil

aircraft. Both proceedings commenced in October 2004, when first the United States and

then the EU requested dispute settlement consultations with respect to each other’s alleged

subsidy measures. In negotiations early in 2005, the United States and the EU agreed on the

terms for the negotiation of a comprehensive settlement, but the 3 month period allowed by

the parties to reach a final agreement expired without such an agreement. Both parties

subsequently requested the establishment of WTO dispute settlement panels in their

respective cases, and panels were established and constituted in the second half of the year.

The panel proceedings were both pending at the end of 2005.

Both the United States and the EU have long claimed that the other either directly or

indirectly subsidizes the production of large civil aircraft. The United States has claimed that

European civil aircraft manufacturer Airbus SAS has benefitted from subsidies provided by

EU member state governments, while the EU has countered that the principal U.S. civil

aircraft manufacturer, Boeing, has benefitted from U.S. Government support.5

 The subsidies

issue was addressed in 1992 in the U.S.-EU Agreement on Large Civil Aircraft, which

placed limits on the form and level of government subsidies affecting large civil aircraft6

manufactured by Airbus and Boeing7 and was intended to lead to a “progressive reduction”

in Airbus subsidies.8

The United States filed its request for dispute settlement consultations on October 6, 2004.

The United States claimed that EU and member state subsidies to Airbus are inconsistent

with EU obligations under the WTO Agreement on Subsidies and Countervailing Measures

(SCM Agreement) and the GATT 1994. More specifically, USTR explained:

Every major Airbus aircraft model was financed . . . with EU government

subsidies taking the form of “launch aid” [for aircraft design and

development]—financing with no or low rates of interest, and repayment

tied to sales of the aircraft. If the sales of a particular model are less than

expected, Airbus does not have to repay the remainder of the financing.

EU governments have forgiven Airbus debt; provided equity infusions;
9

 Ibid.

10 Ibid.

11 EC, “US-Boeing: EU Takes US to the WTO over Subsidies Granted to Boeing,” press release

IP/04/1191, Oct. 6, 2004. 12 EC, “US-Boeing: EU Rejects US Unilateral Abrogation of the 92 Aircraft Agreement,” press release

IP/04/1198, Oct. 8, 2004. 13 The Boeing 787 aircraft, currently under development, was originally known as the 7E7. EC, “USBoeing: EU Takes US to the WTO Over Subsidies Granted to Boeing,” press release IP/04/1191, Oct. 6, 2004;

and EC, “EU-US Agreement on Large Civil Aircraft 1992: Key Facts and Figures,” Memo/04/232, Oct. 6, 2004. 14 USTR, “Statement of U.S. Trade Representative Robert B. Zoellick Regarding U.S.-EU Agreement

on Terms for Negotiation to End Subsidies for Large Civil Aircraft,” press release, Jan. 11, 2005; and EC,

“EU/US Agreement on Terms for Negotiation to End Subsidies for Large Civil Aircraft,” MEMO/05/4, Jan. 11,

2005. 15 USTR, “USTR Spokesman Richard Mills Statement On the Status of U.S.-EU Large Civil Aircraft

Subsidy/Litigation Talks,” April 8, 2005. 16 USTR, “United States Takes Next Step in Airbus WTO Litigation,” May 30, 2005. 

5-3

provided dedicated infrastructure support; and provided substantial

amounts of research and development funds for civil aircraft projects.9

In announcing the WTO case, USTR reported that the 1992 Agreement on Large Civil

Aircraft “has outlived its usefulness” and announced U.S. withdrawal from the agreement.10

The U.S. complaint focused on alleged subsidies provided with respect to the Airbus A350

aircraft, currently under development.

Just hours after the United States filed its request, the EU announced that it would request

dispute settlement consultations with the United States to address certain U.S. measures that

the EU claimed were inconsistent with U.S. obligations under the SCM Agreement.11 The

EU also rejected U.S. termination of the 1992 Agreement on Large Civil Aircraft.12 The EU

asserted that Boeing benefits from indirect U.S. Government subsidies—mainly in the form

of research and development funds from NASA, the Department of Defense, and other U.S.

Government agencies—and certain tax and other benefit programs that are inconsistent with

U.S. WTO obligations, particularly with respect to the development and production of the

Boeing 787 aircraft.13

On January 11, 2005, the United States and EU reached an agreement on the terms for the

negotiation of a new agreement for large civil aircraft. The terms called for the negotiation

of a comprehensive agreement within 3 months to end subsidies to producers of large civil

aircraft. The parties agreed that the new accord would (1) be bilateral and concern Airbus

on the EU side and Boeing on the U.S. side, (2) be based on the definition of subsidies in the

SCM, (3) include provisions on transparency and dispute settlement, (4) include the terms

and conditions for withdrawal from the agreement, and (5) provide for a review of the

operation of the agreement in one year from its entry into force. Both sides agreed to work

to include other countries following the conclusion of an agreement. The parties also agreed

not to request WTO panels relating to the pending disputes and not to commit new

government support for aircraft development or production while negotiations for the new

agreement were ongoing.14

The two sides did not reach an agreement by the April 11, 2005, deadline. In a statement

issued on April 8, 2005, USTR stated that if the EU were to provide additional subsidies to

Airbus, the United States would take the next step and request formation of a WTO dispute

settlement panel.15 On May 31, 2005, the United States requested the establishment of a

WTO dispute settlement panel “in light of the EU’s unwillingness to halt new subsidies for

large civil aircraft,” citing the request by Airbus for $1.7 billion in launch aid for the A350.16
17 EC, “EU Resumes WTO Case Against Boeing,” IP/05/638, May 31, 2005. 18 European Commission, General Overview of Active WTO Dispute Settlement Cases Involving the

EC as Complainant or Defendant and of Active Cases Under the Trade Barriers Regulation, Feb. 17, 2006, p.

18; and USTR, 2006 Trade Policy Agenda and 2005 Annual Report, Mar. 1, 2006, p. 96. 19 Ibid., and WTO, News, “The DSB Establishes Panel in Reference to Aircraft Subsidy Dispute,” Feb.

17, 2006. 20 USTR, “United States Files Additional Consultation Request in Airbus WTO Litigation,” press

release, Feb. 2, 2006. 21 Ibid. The United States requested establishment of a dispute-settlement panel on Apr. 21, 2006, and

on May 9, 2006, the panel was established. The United States also requested that this second panel be merged

with the first panel established July 20, 2005. WTO, News, “Dispute Settlement Body, 9 May 2006, DSB

Establishes a Panel in Reference to EC’s Measures Concerning Civil Aircraft,” May 9, 2006. 22 For more information on the history of this series of disputes, see USITC, The Year in Trade 2004,

pp. 5-2 to 5-3, and prior reports in this series. 23 In May 2003, the DSB authorized the EU to impose up to 100 percent ad valorem duties on imports

of certain U.S. goods to a maximum amount of $4.043 billion per year. WTO, News, “Dispute Settlement Body,

7 May 2003, EU Granted Permission to Apply US $4 Billion Sanctions against US in Foreign Sales Corporation

Case but Delays Application,” May 7, 2003. In March 2004, the EU imposed retaliatory measures in the form

of a 5 percent ad valorem tariff on imports of certain goods, with such tariff to rise by 1 percentage point each

month while the U.S. tax measures remained in place. The tariff reached 14 percent ad valorem in December

2004, but was terminated at the end of that month when the U.S. replacement provisions enacted October 2004

became effective. See “Council Regulation (EC) No. 2193/2003 of 8 December 2003 Establishing Additional

Customs Duties on Imports of Certain Products Originating in the United States of America,” Official Journal

No. L 328 (Dec. 17, 2003).

5-4

On the same day, the EU requested establishment of a WTO panel to examine subsidies

allegedly provided to Boeing.17

Panels were established for both cases on July 20, 2005. At the meeting of the Dispute

Settlement Body (DSB) on September 23, 2005, the WTO formally initiated the informationgathering process under Annex V of the SCM Agreement for both panels. The first phase of

this process was completed in December 2005.

Both the United States and the EU subsequently filed supplementary consultation requests.

The EU filed its second request for consultations on June 27, 2005,18 and requested a panel

on January 20, 2006.19 The panel was established on February 17, 2006. The United States

filed its second request for consultations on January 31, 2006.20 In addition to providing

more information on EU subsidies covered in the ongoing WTO case, the new consultation

request covered alleged new subsidies to Airbus announced since the original consultation

request was made.21

Foreign Sales Corporations

This case concerns the EU’s challenge under the WTO dispute settlement process of U.S.

statutory provisions enacted in October 2004 relating to the taxation of FSCs. This case is

the third in a series of EU challenges under the WTO dispute settlement process on this

aspect of U.S. tax law.22 WTO panels and the Appellate Body found aspects of both prior

U.S. FSC provisions to constitute prohibited export subsidies inconsistent with U.S.

obligations. After adoption of the second panel and Appellate Body reports, the EU sought

and obtained WTO authorization to impose retaliatory tariffs on certain U.S. exports pending

U.S. repeal of the statutory provisions at issue.23 The retaliatory tariffs were imposed in
24 “Council Regulation (EC) No 171/2005 of 31 January 2005 Amending and Suspending the

Application of Regulation (EC) No. 2193/2003 Establishing Additional Customs Duties on Imports of Certain

Products Originating in the United States of America,” Official Journal No. L 28 (Feb. 2, 2005). 25 The legislation was contained in the American Jobs Creation Act of 2004 (Jobs Act), which repealed

the FSC/extraterritorial income (ETI) tax regime. Public Law 108-357. 26 WTO, “United States—Tax Treatment for ‘Foreign Sales Corporations,’ Second Recourse by the

European Communities to Article 21.5 of the DSU, Request for Consultations,” WT/DS108/27, Nov. 10, 2004. 27 WTO, “United States—Tax Treatment for ‘Foreign Sales Corporations,’ Second Recourse to Article

21.5 of the DSU by the European Communities, Request for the Establishment of a Panel,” WT/DS108/29, Jan.

14, 2005. 28 WTO, “United States—Tax Treatment for ‘Foreign Sales Corporations,’ Second Recourse to Article

21.5 of the DSU by the European Communities, Report of the Panel,” WT/DS108/RW2, Sept. 30, 2005. 29 WTO, “United States—Tax Treatment for ‘Foreign Sales Corporations,’ Second Recourse to Article

21.5 of the DSU by the European Communities, Report of the Appellate Body,” WT/DS108/AB/RW2, Feb. 13,

2006. 30 NAFTA is discussed in more detail in chapter 4 of this report. Bilateral U.S. trade relations with

Mexico, the third NAFTA partner, are discussed below.

5-5

March 2004 and were terminated at the end of 2004, when the new U.S. legislation took

effect.24

The U.S. replacement legislation was signed into law on October 22, 2004.25 On November

5, 2004, the EU requested WTO consultations with the United States to examine WTO

compliance of the new legislation.26 At issue were transition and grandfathering provisions

in the new U.S. law.27 After consultations failed to resolve the dispute, the EU requested

establishment of a dispute settlement panel, and a panel was established on February 17,

2005. The panel released its report on September 30, 2005, and found that the new

legislation also was inconsistent with U.S. obligations.28 The United States appealed the

panel’s decision on November 14, and the Appellate Body reached a conclusion similar to

that of the panel on February 13, 2006.29

Canada

Canada is the largest single U.S. trading partner, with two-way merchandise trade valued in

excess of $1 billion per day. U.S. two-way trade with Canada was valued at $470.8 billion

in 2005, up from $418.8 billion in 2004, and $372.8 billion in 2003. U.S. exports of goods

to Canada increased to $183.2 billion in 2005, up 12.3 percent from 2004. U.S. imports from

Canada increased to $287.5 billion in 2005, up 12.5 percent from 2004. The U.S. trade

deficit with Canada increased to $104.3 billion in 2005, a 12.8 percent increase from 2004.

Manufactured products figured prominently in U.S.-Canada two-way trade. Leading U.S.

exports to Canada during the year included major motor vehicle products, such as piston

engines, and parts and accessories of bodies for motor vehicles. Leading U.S. imports from

Canada included passenger motor vehicles, natural gas, and crude petroleum. U.S.-Canadian

merchandise trade data are shown in appendix tables A-25 through A-27.

U.S.-Canadian trade relations are governed in large part by NAFTA, which provides dutyfree status for substantially all bilaterally traded goods originating in the United States and

Canada, and underlying WTO obligations.30 Major trade-related issues in 2005 between the

United States and Canada included a number of trade disputes that were the subject of

several WTO and NAFTA dispute settlement proceedings. The major procedural

developments in each of these cases are listed in tables A-20 and A-21. Several cases relate

to U.S. countervailing duty and antidumping duty orders on imports of Canadian softwood
31 USTR, 2006 Trade Policy Agenda and 2005 Annual Report, p. 133. 32 Notice of Amended Final Determination of Sales at Less than Fair Value and Antidumping Duty

Order: Certain Softwood Lumber Products from Canada, Case No. A-122-838, 67 FR 36068, May 22, 2002;

Notice of Amended Final Affirmative Countervailing Duty Determination and Notice of Countervailing Duty

Order: Certain Softwood Lumber Products from Canada, Case No. C-122-839, 67 FR 36070, May 22, 2002. 33 USITC, Softwood Lumber from Canada, Inv. Nos. 701-TA-414 and 731-TA-928 (Final), publication

3509, May 2002. 34 The panel found Commerce’s determination consistent in part, and inconsistent in part, with U.S.

obligations under the WTO agreements. WTO, “United States—Final Dumping Determination on Softwood

Lumber from Canada—Report of the Panel,” WT/DS264/R, Apr. 13, 2004, and “Dispute DS 264: Summary of

the Dispute to Date,” http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds264_e.htm. 35 The Appellate Body issued its report on Aug. 11, 2004. The panel report was adopted, as amended

by the Appellate Body report on Aug. 31, 2004. WTO, “United States—Final Dumping Determination on

Softwood Lumber from Canada—Report of the Panel,” WT/DS264/R, Apr. 13, 2004; “United States—Final

Dumping Determination on Softwood Lumber from Canada—Notification of an Appeal by the United States

under paragraph 4 of Article 16 of the Understanding on Rules and Procedures Governing the Settlement of

(continued...)

5-6

lumber, and U.S. and Canadian measures affecting trade in grain products. Recent

developments concerning these issues are summarized below.

Canada is the largest export market for U.S. food and agricultural products. The United

States and Canada held several meetings of the U.S.-Canada Consultative Committee and

the Province/State Advisory Group, to discuss items of mutual interest concerning grain,

seed, plants, vegetables and fruits, livestock, processed foods, and pesticide and animal drug

regulation. These two groups were established as a result of the 1998 U.S.-Canada Record

of Understanding on Agricultural Matters, and are scheduled to continue consultations in

2006 regarding bulk restrictions.31

Softwood Lumber

U.S. countervailing duty and antidumping duty orders on Canadian softwood lumber were

the subject of a number of ongoing dispute settlement cases during 2005 under the WTO

dispute settlement process (see table A-20) and under the NAFTA Chapter 19 binational

dispute mechanism (see table A-21), and also were the subject of a number of appeals in the

U.S. courts. The U.S. Department of Commerce (“Commerce”) issued the orders in 2002

after it found that imports of softwood lumber from Canada were both sold at less than fair

value as well as subsidized by the Government of Canada,32 and the Commission made an

affirmative injury determination.33 Canada separately challenged before WTO and NAFTA

panels (1) Commerce’s antidumping duty finding, (2) Commerce’s subsidy finding, and (3)

the Commission’s injury determination. Recent developments in six of the cases that

developed from these original challenges and were ongoing in 2005 are summarized below.

WTO Antidumping Determination

This case concerns Canada’s challenge under the WTO dispute settlement process of

Commerce’s final affirmative antidumping duty determination. Canada requested WTO

dispute consultations with the United States in September 2002. When the consultations did

not resolve the dispute, Canada requested the establishment of a panel to review the matter.

A panel was established and the panel issued a report;34 the panel report was appealed to the

WTO Appellate Body, and in August 2004 the panel report was adopted, as amended by the

Appellate Body.35 On December 6, 2004, Canada and the United States notified the DSB that
35 (...continued)

Disputes (DSU),” WT/DS264/6, May 18, 2004; and “United States—Final Dumping Determination on Softwood

Lumber from Canada—Report of the Appellate Body,” WT/DS264/AB/R, Aug. 11, 2004. 36 WTO, “United States—Final Dumping Determination on Softwood Lumber from

Canada—Agreement under Article 21.3(b) of the DSU,” WT/DS264/12, Dec. 8, 2004. 37 WTO, “United States—Final Dumping Determination on Softwood Lumber from

Canada—Understanding between Canada and the United States Regarding Procedures under Articles 21 and 22

of the DSU,” WT/DS264/18, May 30, 2005. 38 WTO, “United States—Final Dumping Determination on Softwood Lumber from Canada—Request

by the United States for Arbitration under Article 22.6 of the DSU,” WT/DS264/19, June 1, 2005. 39 WTO, “United States—Final Dumping Determination on Softwood Lumber from Canada—Recourse

to Article 21.5 of the DSU by Canada—Communication from the Chairman of the Panel,” WT/DS264/24, Sept.

20, 2005, and “United States—Final Dumping Determination on Softwood Lumber from Canada—Recourse to

Article 21.5 of the DSU by Canada—Report of the Panel,” WT/DS264/RW, Apr. 3, 2006, and “Dispute DS264:

Summary of the Dispute to Date.”. 40 In its August 2003 report, the panel found Commerce’s determination consistent in part, and

inconsistent in part, with U.S. obligations under the WTO agreements. The Appellate Body issued its report on

Jan. 19, 2004. The panel report was adopted on Feb. 17, 2004, as amended by the Appellate Body report

upholding in part and reversing in part the panel findings. WTO, “United States—Final Countervailing Duty

Determination with Respect to Certain Softwood Lumber from Canada—Report of the Panel” WT/DS257/R,

Aug. 29, 2003; “United States—Final Countervailing Duty Determination with Respect to Certain Softwood

Lumber from Canada—Notification of an Appeal by the United States under paragraph 4 of Article 16 of the

Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU),” WT/DS257/8, Oct. 24,

2003; “United States—Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from

Canada—Report of the Appellate Body,” WT/DS257/AB/R, Jan. 19, 2004; and “United States—Final

Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada—Appellate Body

Report and Panel Report—Action by the Dispute Settlement Body,” WT/DS257/11, Feb. 23, 2004.

5-7

they had reached agreement on the reasonable period of time for compliance to be 7-1/2

months, that is, by April 15, 2005.36

On May 19, 2005, the United States reported to the DSB that it had implemented the panel

and Appellate Body reports. On May 20, 2005, Canada requested establishment of a panel

under Dispute Settlement Understanding (DSU) Article 21.5 to examine U.S.

implementation of the DSB recommendations and rulings; Canada also requested

authorization to suspend concessions or other obligations under the DSU in retaliation for

alleged U.S. failure to implement the DSB recommendations and rulings, to which the

United States objected.37 Accordingly, the latter issue was referred to arbitration.38

On September 20, 2005, the DSB notified the parties that the Article 21.5 panel would be

unable to deliver its report within the standard time period because of the withdrawal of the

panel chairman and the complexity of the case. The Article 21.5 panel issued its report on

April 3, 2006, rejecting Canada’s claim.39

WTO Countervailing Duty Determination

This case concerns Canada’s challenge under the WTO dispute settlement process of

Commerce’s final affirmative countervailing duty determination. Canada requested WTO

dispute settlement consultations in May 2002, and when the consultations did not resolve the

dispute, Canada requested the establishment of a panel. A panel was established and the

panel issued a report in August 2003, and the report was subsequently appealed to the

Appellate Body. The panel report, as amended by the Appellate Body, was adopted in

February 2004.40
41 WTO, “United States—Final Countervailing Duty Determination with Respect to Certain Softwood

Lumber from Canada—Recourse by Canada to Article 21.5 of the DSU—Constitution of the Panel—Note by

the Secretariat,” WT/DS257/19, Feb. 14, 2005. 42 WTO, “United States—Final Countervailing Duty Determination with Respect to Certain Softwood

Lumber from Canada—Recourse by Canada to Article 21.5 (DS257)—Report of the Panel,” WT/DS257/RW,

Aug. 1, 2005. 43 WTO, “United States—Final Countervailing Duty Determination With Respect to Certain Softwood

Lumber from Canada—Appellate Body Report and Panel Report pursuant to Article 21.5 of the DSU—Action

by the Dispute Settlement Body,” WT/DS257/25, Dec. 22, 2005. 44 WTO, “United States—Investigation of the International Trade Commission in Softwood Lumber

from Canada—Request for Consultations by Canada,” WT/DS277/1, G/L/598, G/ADP/D45/1, G/SCM/D51/1,

Jan. 7, 2003. 45 WTO, “United States—Investigation of the International Trade Commission in Softwood Lumber

from Canada—Report of the Panel,” WT/DS277/R, Mar. 22, 2004. 46 The panel found that the threat of material injury determination regarding imports of softwood

lumber from Canada was not consistent with U.S. obligations under the WTO agreements. WTO, “United

States—Investigation of the International Trade Commission in Softwood Lumber from Canada—Panel

Report—Action by the Dispute Settlement Body,” WT/DS277/5, Apr. 28, 2004. 47 WTO, “United States—Investigation of the International Trade Commission in Softwood Lumber

from Canada—Agreement under Article 21.3(b) of the DSU,” WT/DS277/7, Oct. 4, 2004. 48 Following the DSB’s adoption of the original panel report, the United States came into compliance

with its obligations under the covered agreements through a new proceeding by the Commission (known as the

“section 129 proceeding”). After conducting its analysis in this proceeding, the Commission, on Nov. 24, 2004,

issued its Section 129 Determination, which found that an industry in the United States is threatened with

(continued...)

5-8

On April 28, 2004, Canada and the United States notified the DSB that they had reached

agreement on the reasonable period of time for implementation of the panel’s

recommendations, to be completed by December 17, 2004. The United States reported that

it had implemented the DSB’s recommendations and rulings. On December 30, 2004,

Canada requested establishment of a panel under DSU Article 21.5 to examine U.S.

implementation of the DSB recommendations and rulings. Canada also requested

authorization to suspend concessions or other obligations under the DSU in retaliation for

alleged U.S. failure to implement the DSB recommendations and rulings, to which the

United States objected.41

The Article 21.5 panel issued its report on August 1, 2005, finding U.S. measures still in part

inconsistent with U.S. obligations under the WTO agreements.42 The report subsequently

was appealed to the Appellate Body by the United States. On December 22, 2005, the DSB

adopted the panel report, as amended by the Appellate Body report.43

WTO Threat of Material Injury Determination

This case concerns Canada’s challenge under the WTO dispute settlement process of the

Commission’s affirmative determination that a U.S. industry is threatened with material

injury by reason of imports of Canadian softwood lumber that Commerce determined are

being subsidized as well as sold in the United States at less than fair value. Canada requested

WTO dispute settlement consultations with the United States in December 2002,44 and when

the consultations did not resolve the dispute, requested establishment of a panel. A panel was

established and it issued a report;45 the DSB adopted the report on April 26, 2004.46 On

October 1, 2004, Canada and the United States notified the DSB that they had reached

agreement on the reasonable period of time for implementation, by January 26, 2005.47

On January 25, 2005, the United States reported to the DSB that it had implemented the

DSB’s recommendations and rulings.48 Canada requested establishment of a panel under
48 (...continued)

material injury by reason of dumped and subsized imports of softwood lumber from Canada. 49 WTO, “United States—Investigation of the International Trade Commission in Softwood Lumber

from Canada—Recourse to Article 21.5 of the DSU by Canada—Request for the Establishment of a Panel,”

WT/DS277/8, Feb. 15, 2005. 50 WTO, “United States—Investigation of the International Trade Commission in Softwood Lumber

from Canada—Recourse to Article 22.2 of the DSU by Canada,” WT/DS277/9, Feb. 15, 2005. 51 WTO, “United States—Investigation of the International Trade Commission in Softwood Lumber

from Canada—Recourse to Article 21.5 of the DSU by Canada—Report of the Panel,” WT/DS277/RW, Nov.

15, 2005. On Jan. 13, 2006, Canada notified its appeal of the panel's report. See WTO, “United

States—Investigation of the International Trade Commission in Softwood Lumber from Canada—Recourse to

Article 21.5 of the DSU by Canada—Notification of an Appeal by Canada under Article 16.4 and Article 17 of

the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), and under Rule 20(1)

of the Working Procedures for Appellate Review,” WT/DS277/16, Jan. 17, 2006. On Apr. 13, 2006, the

Appellate Body issued its report. See WTO, “United States—Investigation of the International Trade

Commission in Softwood Lumber from Canada Recourse to Article 21.5 of the DSU by Canada—Report of the

Appellate Body,” WT/DS277/AB/RW, Apr. 13, 2006. 52 NAFTA Secretariat, “Article 1904 Binational Panel Review Pursuant to the North American Free

Trade Agreement in the Matter of Certain Softwood Lumber Products from Canada—Final Affirmative

Antidumping Determination—Decision of the Panel,” USA-CDA-2002-1904-02, July 17, 2003. U.S. Department

of Commerce, ITA, Import Administration, “Remand Redeterminations,” “Remand Redetermination in the

Matter of Sales at Less Than Fair Value of Certain Softwood Lumber from Canada,” Sec. file

USA-CDA-2002-1904-02, NAFTA Binational Panel Review, Oct. 16, 2003. NAFTA Secretariat, “Article 1904

Binational Panel Review Pursuant to the North American Free Trade Agreement in the Matter of Certain

Softwood Lumber Products from Canada—Final Affirmative Antidumping Determination—Decision of the

Panel Respecting Remand Redetermination,” USA-CDA-2002-1904-02, Mar. 5, 2004. U.S. Department of

Commerce, ITA, Import Administration website, “Remand Redeterminations,” “Remand Redetermination in the

Matter of Sales at Less Than Fair Value of Certain Softwood Lumber from Canada.” Sec. file

USA-CDA-2002-1904-02, NAFTA Binational Panel Review, Apr. 21, 2004. 53 NAFTA Secretariat, “Article 1904 Binational Panel Review Pursuant to the North American Free

Trade Agreement in the Matter of Certain Softwood Lumber Products from Canada—Final Affirmative

Antidumping Determination—Decision of the Panel Following Remand,” USA-CDA-2002-1904-02, June 9,

2005. 54 Commerce recalculated the antidumping duty margins for all companies as well as the “all others”

rate, yielding weighted-average percentage dumping margins for the period Apr. 1, 2000, through Mar. 31, 2001,

ranging from 3.19 to 17.59 percent. U.S. Department of Commerce, ITA, Import Administration, “Remand

Redeterminations,” “Remand Redetermination in the Matter of Sales at Less Than Fair Value of Certain

Softwood Lumber from Canada,” USA-CDA-2002-1904-02, NAFTA Binational Panel Review, July 11, 2005.

5-9

Article 21.5 to examine U.S. implementation of the DSB’s recommendations and rulings,49

and requested authorization to suspend concessions or other obligations to the United States

in retaliation.50 On November 15, 2005, the Article 21.5 panel issued its report,51 which

affirmed that the United States had brought its measure into compliance with its obligations.

The panel report was appealed by Canada to the Appellate Body in January 2006.

NAFTA Antidumping Determination

This case concerns a challenge brought under the NAFTA binational dispute mechanism of

Commerce’s affirmative antidumping duty determination. Canadian parties sought the

NAFTA panel review in 2002. The panel reviewing Commerce’s antidumping duty

determination and subsequent remand determinations issued a series of decisions in 2003 and

2004 affirming in part and remanding in part each Commerce determination.52

The binational panel issued its third decision in the proceeding on June 9, 2005.53 Commerce

issued its third remand redetermination of the binational panel review on July 11, 2005.54 A

panel decision on Commerce’s third remand determination is pending.
55 NAFTA Secretariat, “Article 1904 Binational Panel Review Under the North American Free Trade

Agreement in the Matter of Certain Softwood Lumber Products from Canada—Final Affirmative Countervailing

Duty Determination—Decision of the Panel,” USA-CDA-2002-1904-03, Aug. 13, 2003. U.S. Department of

Commerce, ITA, “Remand Redeterminations,” “Remand Determination in the Matter of Certain Softwood

Lumber from Canada—Final Affirmative Countervailing Duty Determination,” file no.

USA-CDA-2002-1904-03, NAFTA Binational Panel Review, Jan. 12, 2004. NAFTA Secretariat, “Article 1904

Binational Panel Review under the North American Free Trade Agreement in the Matter of Certain Softwood

Lumber Products from Canada—Final Affirmative Countervailing Duty Determination—Decision of the Panel,”

file USA-CDA-2002-1904-03, June 7, 2004. U.S. Department of Commerce, ITA, Import Administration

website, “Remand Redeterminations,” “Second Remand Determination in the Matter of Certain Softwood

Lumber from Canada—Final Affirmative Countervailing Duty Determination,” USA-CDA-2002-1904-03,

NAFTA Binational Panel Review, July 30, 2004. 56 NAFTA Secretariat, “Article 1904 Binational Panel Review Under the North American Free Trade

Agreement in the Matter of Certain Softwood Lumber Products from Canada—Final Affirmative Countervailing

Duty Determination—Decision of the Panel on Second Remand,” file USA-CDA-2002-1904-03, Dec. 1, 2004. 57 U.S. Department of Commerce, ITA, Import Administration, “Remand Redeterminations,” “Third

Remand Determination in the Matter of Certain Softwood Lumber from Canada—Final Affirmative

Countervailing Duty Determination,” Sec. file no. USA-CDA-2002-1904-03, NAFTA Binational Panel Review,

Jan. 24, 2005. 58 NAFTA Secretariat, “Article 1904 Binational Panel Review Under the North American Free Trade

Agreement in the Matter of Certain Softwood Lumber Products from Canada—Final Affirmative Countervailing

Duty Determination—Decision of the Panel on Third Remand,” file USA-CDA-2002-1904-03, May 23, 2005.

U.S. Department of Commerce, ITA, Import Administration, “Remand Redeterminations,” “Fourth Remand

Determination in the Matter of Certain Softwood Lumber from Canada—Final Affirmative Countervailing Duty

Determination,” Sec. file no. USA-CDA-2002-1904-03, NAFTA Binational Panel Review, July 7, 2005.NAFTA

Secretariat, “Article 1904 Binational Panel Review Under the North American Free Trade Agreement in the

Matter of Certain Softwood Lumber Products from Canada—Final Affirmative Countervailing Duty

Determination—Decision of the Panel on the Fourth Remand Determination,” file USA-CDA-2002-1904-03,

Oct. 5, 2005. 59 In its filing, Commerce calculated a de minimis subsidy rate of 0.80 percent countrywide. U.S.

Department of Commerce, “U.S. Response to NAFTA Panel Decision: Fifth Remand Determination

Countervailing Duty Investigation on Softwood Lumber from Canada,” Nov. 22, 2005. On Mar. 17, 2006, the

binational panel reviewing Commerce’s countervailing duty determination issued its decision on the fifth remand

determination unanimously affirming Commerce’s fifth determination on remand. See NAFTA Secretariat,

“Article 1904 Binational Panel Review Under the North American Free Trade Agreement in the Matter of

Certain Softwood Lumber Products from Canada—Final Affirmative Countervailing Duty

Determination—Decision of the Panel on the Fifth Remand Determination,” file USA-CDA-2002-1904-03, Mar.

17, 2006.

5-10

NAFTA Countervailing Duty Determination

This case concerns a challenge brought under the NAFTA binational dispute mechanism of

Commerce’s affirmative countervailing duty determination. Canadian parties sought the

review in 2002. The panel reviewing Commerce’s CVD determination and subsequent

remand determinations issued a series of decisions in 2003 and 2004, affirming in part and

remanding in part each Commerce determination.55

The binational panel issued its third decision in this proceeding on December 1, 2004.56 In

response, Commerce filed its third remand determination with the panel on January 24,

2005.57 During 2005, the panel reviewed and remanded in part each of Commerce’s third and

fourth remand determinations.58 Commerce filed its fifth remand determination with the

panel on November 22, 2005, implementing the panel’s instructions with respect to log seller

profit.59
60 NAFTA Secretariat, “Article 1904 Binational Panel Review Pursuant to the North American Free

Trade Agreement in the Matter of Certain Softwood Lumber Products from Canada—Final Affirmative Threat

of Material Injury Determination—Decision of the Panel,” Sec. file USA-CDA-2002-1904-07, Sept. 5, 2003.

See Softwood Lumber from Canada, Inv. Nos. 701-TA-414 and 731-TA-928 (Remand), publication 3658, Dec.

2003. NAFTA Secretariat, “Article 1904 Binational Panel Review Pursuant to the North American Free Trade

Agreement in the Matter of Certain Softwood Lumber Products from Canada—Final Affirmative Threat of Injury

Determination—Remand Decision of the Panel,” Sec. file USA-CDA-2002-1904-07, Apr. 19, 2004 (issued April

29, 2004).61 USITC, Softwood Lumber From Canada (Views on Remand) (Second Remand), Inv. Nos.

701-TA-414 and 731-TA-928 (Final), publication 3715, June 2004. 62 NAFTA Secretariat, “Article 1904 Binational Panel Review Pursuant to the North American Free

Trade Agreement in the Matter of Certain Softwood Lumber Products from Canada—Final Affirmative Threat

of Injury Determination—Second Remand Decision of the Panel,” Sec. file USA-CDA-2002-1904-07, Aug. 31,

2004. 63 USITC, Softwood Lumber From Canada (Views on Remand) (Third Remand) [sic], Inv. Nos.

701-TA-414 and 731-TA-928 (Final), publication 3815, September 2004. Chairman Koplan dissented from the

majority determination and reaffirmed his prior affirmative threat determination. See Dissenting Views of

Chairman Koplan. 64 NAFTA Secretariat, “Status Report of Panel Proceedings—Completed NAFTA Panel Reviews,”

USA-CDA-2002-1904-07, “Certain Softwood Lumber Products from Canada—USITC Final Injury

Determination.” 65 See Active Extraordinary Challenge Committee Proceedings, NAFTA Secretariat,

http://www.nafta-sec-alena.org/DefaultSite/index_e.aspx?DetailID=11#ecc200401. 66 NAFTA Secretariat, “Article 1904 Extraordinary Challenge Pursuant to the North American Free

Trade Agreement in the Matter of Certain Softwood Lumber Products from Canada—Opinion and Order of the

Extraordinary Challenge Committee,” Sec. file ECC-2004-1904-01USA, Aug. 10, 2005.

5-11

NAFTA Threat of Material Injury Determination

This case concerns challenges under the NAFTA binational dispute mechanism of the

Commission’s original threat of material injury determination in 2002. Canadian parties

sought the review in 2002. In 2003 and 2004, the panel affirmed in part and remanded in part

the Commission’s original affirmative determination and subsequent first remand

determination.60 In response to the panel’s second decision, on June 10, 2004, the

Commission issued a second remand determination, again making an affirmative threat of

material injury determination.61

In its August 31, 2004, decision, the panel remanded the case to the Commission “for the

Commission to make a determination consistent with the decision of this Panel that the

evidence on the record does not support a finding of threat of material injury.”62 On

September 10, 2004, the Commission majority, recognizing that the “Panel’s Decision and

Order can only be seen as a reversal of the Commission’s affirmative determination of threat

of material injury,” issued “a determination, consistent with the Panel’s decision, that the

U.S. softwood lumber industry is not threatened with material injury by reason of subject

imports from Canada.”63 The panel upheld the Commission’s third remand determination and

issued notice of final panel action in October 2004.64

The United States requested an Extraordinary Challenge Committee (ECC) on November

24, 2004, pursuant to Article 1904.13 and Annex 1904.13 of NAFTA to review issues raised

by the Chapter 19 binational panel in this proceeding.65 On August 10, 2005, the ECC

unanimously affirmed the decision of the binational panel.66
67 U.S. Department of State telegram, “2004 National Trade Estimate Report—Canada,” message

reference No. 3698, prepared by the U.S. Embassy, Ottawa, Dec. 24, 2003. 68 For further detail, see USITC, The Year in Trade 2001: OTAP, publication 3510, May 2002, pp. 4-14

to 4-15. 69 WTO, “WT/DS276—Canada—Measures Relating to Exports of Wheat and Treatment of Imported

Grain Complaint by the United States,” Update of WTO Dispute Settlement Cases, WT/DS/OV/22, Oct. 14,

2004. For further detail, see USITC, The Year in Trade, 2001, p. 5-11. 70 WTO, “WT/DS276—Canada—Measures Relating to Exports of Wheat and Treatment of Imported

Grain Complaint by the United States,” Update of WTO Dispute Settlement Cases, WT/DS/OV/22, Oct. 14,

2004. For further detail, see USITC, The Year in Trade, 2001, p. 5-11. 71 USTR, 2006 Trade Policy Agenda and 2005 Annual Report. 72 On May 19, 2005, Canada passed “An Act to Amend the Canada Grain Act and The Canada

Transportation Act,” which amends the Canada Transportation Act to extend the railway revenue cap to imported

grain; changes the Canada Grain Regulations to remove the requirement that elevator operators must seek

Canadian Grain Commission permission to mix grain; and substitutes a new regulation that requires elevator

operators to notify the Canadian Grain Commission of the origin of all grain. This legislation and associated

regulatory changes entered into force on Aug. 1, 2005. See WTO, “Canada—Measures Relating to Exports of

Wheat and Treatment of Imported Grain—Status Report by Canada—Addendum,” WT/DS276/20/Add.3, Aug.

19, 2005. 73 USTR, 2006 Trade Policy Agenda and 2005 Annual Report. 74 CBSA announced its final determination on Mar. 15, 2006 that final combined duties of 44 percent

will be imposed should CITT make an affirmative final injury determination in April 2006. CITT, “Inquiries

(Section 42)—Findings and Reasons—Unprocessed Grain Corn,” Inquiry No. NQ-2005-001, Apr. 18, 2006.

5-12

Grains

WTO Dispute over Canadian Wheat Board and Treatment of Imported Grain

The Canadian Wheat Board (CWB) operates as a state trading enterprise with governmentsanctioned authorities that the United States believes restricts competition.67 In 2003, the

United States requested a WTO dispute settlement panel to examine Canadian measures

relating to exports of wheat and the treatment of imported grain as handled by the CWB,

including claims related to access for U.S. exports of grain to Canada’s rail transportation

system.68

In April 2004, the WTO panel issued its report which found that the United States failed to

establish a number of its claims but that related Canadian legislation was also inconsistent

with its WTO obligations.69 In June 2004, the United States notified the WTO that it would

appeal certain issues of law and legal interpretation in the panel report. The WTO Appellate

Body issued its report in August 2004, upholding the panel report conclusions.70 The panel

report, as amended by the Appellate Body, was adopted in September 2004. In November

2004, the United States and Canada agreed on a time period in which to bring into

compliance those regulations found to be inconsistent with Canada’s WTO obligations.71 In

August 2005, Canada reported to the WTO that new legislation effective on August 1, 2005

brought Canada into compliance with its WTO obligations.72

Canadian Complaint Regarding Imports of Unprocessed U.S. Grain Corn

On September 16, 2005, the Canadian International Trade Tribunal (CITT) and the Canada

Border Services Agency (CBSA) instituted an investigation into alleged dumping and

subsidization of U.S. grain corn exports to Canada, following a petition filed by the

Canadian Corn Growers.73 On November 15, 2005, the CITT made a preliminary injury

finding that imports of unprocessed U.S. grain corn are injuring Canadian growers.74 The

CITT preliminary finding authorized provisional antidumping duties of US$0.58 per bushel
75 USTR, “United States Requests WTO Consultations with Canada Over Duties on Grain Corn,” Mar.

17, 2006, press release. 76 CITT found that imports of unprocessed U.S. grain corn had not caused and were not threatening

to cause injury to the domestic Canadian industry. CITT, “Inquiries (Section 42)—Findings and

Reasons—Unprocessed Grain Corn,” Inquiry No. NQ-2005-001, Apr. 18, 2006. 77 In June 2004, Canada also requested the WTO Dispute Settlement Body to establish a dispute panel

to examine aspects of the U.S. investigation and determination regarding hard red spring wheat from Canada.

The United States responded to the DSB that Canada’s claims lacked merit and the DSB agreed to take up the

matter at its next meeting. In July 2004, Canada requested the DSB to withdraw the request for the establishment

of a panel but reserved its right to make a second request at a future time. See WTO, DSB, “United

States—Determination of the International Trade Commission in Hard Red Spring Wheat from Canada—Request

for the Establishment of a Panel by Canada,” WT/DS310/2, June 11, 2004; WTO, DSB, “Removal of Panel

Request from the Agenda,” WTO News: 2004 News Items—Dispute Settlement Body, July 20, 2004. 78 NAFTA Secretariat, “Article 1904 Binational Panel Review under the North American Free Trade

Agreement in the Matter of Certain Durum Wheat and Hard Red Spring Wheat from Canada, Final Affirmative

Countervailing Duty Determinations—Decision of the Panel Reviewing the Final Determinations of the ITA,

U.S. Department of Commerce,” USA-CDA-2003-1904-05, Mar. 10, 2005. 79 NAFTA Secretariat, “Article 1904 Binational Panel Review Pursuant to the North American Free

Trade Agreement in the Matter of Hard Red Spring Wheat from Canada—Decision of the Panel on the Remand

Determination of the U.S. International Trade Commission,” USA-CDA-2003-1904-06, Dec. 12, 2005.

Subsequently, the panel reviews involving Commerce’s antidumping findings and subsidy findings were

terminated.

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and provisional countervailing duties of US$1.07 per bushel from December 15, 2005.75 The

CITT issued a negative final injury determination on April 18, 2006.76

NAFTA Panel Review of U.S. Determinations Concerning Hard Red Spring

Wheat

This case concerns challenges under the NAFTA Chapter 19 binational dispute mechanism

of U.S. antidumping duty and countervailing duty orders issued by Commerce in October

2003 on imports of hard red spring wheat from Canada and the Commission’s related injury

determination.77 Canada separately challenged before NAFTA panels (1) Commerce’s

antidumping finding, (2) Commerce’s subsidy finding, and (3) the Commission’s injury

determination. 

On March 10, 2005, a binational panel issued its decision concerning a review of

Commerce’s final affirmative countervailing duty determination in the matter of certain hard

red spring wheat from Canada. The panel upheld Commerce’s findings and determinations

regarding the provision of government-owned and leased railcars, but remanded to

Commerce its findings and determinations regarding the financial risk coverage program.78

The binational panel reviewing the Commission’s injury determination heard oral arguments

on March 9, 2005 and, on June 7, 2005, issued a decision remanding the Commission’s

original affirmative injury determination. On October 5, 2005, the Commission issued a

determination that the domestic industry was not injured by reason of the subject imports.

The binational panel issued its decision on December 12, 2005, affirming the Commission’s

remand determination.79
80 China became the 143rd member of the WTO in November 2001. Most of the key tariff and market

access commitments China made as part of its WTO accession were scheduled to be fully phased in by Dec. 11,

2004. 81 USTR, 2005 Report to Congress on China’s WTO Compliance, Dec. 11, 2005, pp. 3–4. 82 Ibid., pp. 5–8.

83 Ibid., p. 63.

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China

China ranked as the second largest single U.S. trading partner in 2005 (based on two-way

trade of exports plus imports) behind Canada and, for the first time, ahead of Mexico. In

2005, total U.S.-China merchandise trade totaled $281.5 billion, an increase of 23 percent

from 2004. U.S. exports of goods to China in 2005 were valued at $38.9 billion, a 19.2

percent increase from 2004, ranking China as the fourth-largest goods export market for the

United States—after Canada, Mexico, and Japan. U.S. imports of goods from China were

valued at $242.6 billion in 2005, an increase of 23.7 percent from 2004, making China the

second-largest U.S. import supplier behind Canada. Leading U.S. exports to China during

2005 included aircraft, soybeans, integrated circuits, cotton, waste and scrap, raw hides and

skins, and fertilizer. Leading U.S. imports from China included computer parts and

accessories; portable automatic data processing machines; transmission apparatus; sound and

video recording or reproducing equipment; footwear; and wooden furniture. U.S.-China

merchandise trade data are shown in appendix tables A-28 through A-30.

China’s compliance with its WTO commitments remained a major focus of the U.S.-China

trade relationship in 2005. Many of these issues were addressed during the July 2005

meeting of the U.S.-China Joint Commission on Commerce and Trade (JCCT), a

government-to-government consultative mechanism established in 1983 to address bilateral

trade issues. Also during 2005, U.S. and Chinese officials held bilateral discussions

throughout the year to address global trade imbalances and China’s exchange rate regime.

These issues are discussed in more detail below. The U.S.-China textile agreement, reached

on November 8, 2005, is discussed in chapter 2 of this report in the section “Textile and

Apparel Developments in 2005.”

U.S. Assessment of China’s WTO Compliance in 2005

The year 2005 was the first year following the deadline for China to fully phase in its WTO

market access commitments.80 USTR is required to report annually to Congress on China’s

compliance with its WTO commitments. In its 2005 report, USTR reported that China had

made important progress in adhering to its WTO obligations, although “there are still serious

problems in some important areas.”81 USTR reported that China’s policies with respect to

IPR enforcement, agriculture, trading rights, services, industrial policies, and transparency

were major areas of U.S. concerns.82 These topics are discussed below.

Intellectual Property Rights

According to USTR, China’s framework of laws, regulations, and implementing rules

governing IPR remained “largely satisfactory” during 2005,83 but with some improvements

still needed in such areas as internet copyright protection. However, the report stated that

counterfeiting and piracy remain very high in China and cause serious economic harm to
84 Ibid., p. 5.

85 Ibid.

86 Ibid., p. 70.

87 U.S. Department of State telegram, “U.S.-China JCCT IPR Working Group Meetings (November

2005),” message reference No. 003240, prepared by U.S. Embassy, Beijing, Feb. 23, 2006. 88 “Remarks by Deputy U.S. Trade Representative Karan K. Bhatia at U.S.-China Business Council

Forecast 2006 Conference,” Washington, DC, Jan. 25, 2006. 89 International Intellectual Property Alliance, 2006 Special 301 Report: People’s Republic of China

(PRC), p. 112, http://www.iipa.com/rbc/2006/2006SPEC301PRC.pdf. 90 Developments with respect to special 301 and the results of the USTR 2005 out-of-cycle review for

China are discussed in chapter 2 of this report. 91 USTR, “Fact Sheet: The U.S.-China Joint Commission on Commerce and Trade (JCCT) Outcomes

on Major U.S. Trade Concerns,” July 11, 2005; and U.S. Department of State telegram, “Joint Commission on

Commerce and Trade (JCCT): Opening Plenary Session,” message reference No. 011315, prepared by U.S.

Embassy, Beijing, July 13, 2005. 92 USTR, 2005 Report to Congress on China’s WTO Compliance, p. 66.

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U.S. businesses in virtually every sector of the economy.84 The report found that IPR

enforcement in China “remained largely ineffective in 2005,”85 and attributed this to “local

protectionism and corruption, institutional deficiencies, weak administrative enforcement,

high thresholds for criminal prosecution, and lack of training and weak punishments.”86 A

U.S. State Department report identified IPR enforcement in China as the main trade-related

complaint of U.S. companies doing business in China.87 Similarly, a 2005 white paper issued

jointly by the American Chamber of Commerce in China and the American Chamber of

Commerce in Shanghai reported that 80 percent of 331 American companies surveyed

described China’s IPR protection as “ineffective” or “totally ineffective.”88 One U.S. private

sector report estimated U.S. trade losses due to copyright piracy in China at $2.4 billion in

2005.89

On April 29, 2005, USTR announced the results of an out-of-cycle review of China’s IPR

policies under the 2005 annual special 301 provisions of U.S. trade law. That review found

that piracy and counterfeiting rates remained at very high levels because of ineffective IPR

enforcement in China. As a result, USTR elevated China to the special 301 priority watch

list.90

During the July 2005 Joint Commission meeting, China agreed to undertake a number of

specific actions to improve IPR enforcement, including— 

• increase criminal prosecutions of IPR violators;

• improve enforcement at the border to reduce exports of infringing goods;

• improve national policy coordination of all IPR criminal enforcement;

• work with the United States to establish a bilateral IPR law enforcement

working group;

• address piracy of movies and audio-visual products;

• ensure use of legal software in the state-owned sector, and fight software enduse piracy;

• rid trade fairs of counterfeit products;

• promise to join global internet treaties in 2006; and

• establish IPR ombudsman at China’s embassy in Washington, D.C. to assist

small- and medium-sized U.S. companies experiencing IPR problems in

China.91

In its 2005 Report to Congress, USTR reported that China had taken several steps to

implement these commitments,92 but also stated that “lack of transparency on IPR
93 USTR, U.S.-China Trade Relations: Entering a New Phase of Greater Accountability and

Enforcement, Top-to Bottom Review, February 2006, p. 14. 94 The TRIPS Agreement requires China to implement effective enforcement procedures and to provide

civil and criminal remedies that have a deterrent effect. USTR, 2005 Report to Congress on China’s WTO

Compliance, p. 70. 95 WTO, “Council for Trade-Related Aspects of Intellectual Property Rights—Request for Information

Pursuant to Article 63.3 of the TRIPS Agreement—Communication from the United States,” Nov. 14, 2005,

IP/C/W/461. 96 USTR, 2005 Report to Congress on China’s WTO Compliance, p. 54. 97 Ibid., p. 7.

98 USTR, “Fact Sheet: The U.S.-China Joint Commission on Commerce and Trade (JCCT) Outcomes

on Major U.S. Trade Concerns,” July 11, 2005. 99 Ibid.

100 USTR, 2005 Report to Congress on China’s WTO Compliance, p. 55. 101 China was one of several countries that banned imports of U.S. beef and beef products in December

2003 after a cow of Canadian origin, found in a U.S. herd, was determined to be infected with BSE. The impact

of BSE on U.S. trade with selected partners is discussed in chapter 1 of this report. 102 U.S. Department of State telegram, “U.S.-China Animal Health Bilateral Meeting,” message

reference No. 018410, prepared by U.S. Embassy, Beijing, Nov. 9, 2005. 103 U.S. Department of State telegram, “USTR Portman’s Meeting with Commerce Minister Bo,”

message reference No. 018743, prepared by U.S. Embassy Beijing, Nov. 14, 2005. 104 George W. Bush, “President’s Remarks to the Travel Pool in China,” Beijing, China, Nov. 20, 2005. 105 U.S. Department of State, “MOA Minister Du Qinling Meets USDA Secretary Mike Johanns at

WTO Ministerial in Hong Kong.” message reference No. 000615, prepared by U.S. Embassy, Beijing, Jan. 11,

2006. At the 17th annual senior-level meeting of JCCT in April 2006, China conditionally agreed to resume

imports of U.S. beef. USTR, “United States Welcomes Chinese Action on Key Trade Issues,” press release, April

11, 2006.

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infringement levels and enforcement activities in China has hampered the United States’

ability to assess the effectiveness of China’s efforts to improve IPR enforcement.”93 In

October 2005, the United States submitted an information request to China under Article

63.3 of the TRIPS Agreement94 seeking detailed data from China on its IPR enforcement

efforts over the last four years.95

Agriculture

In its 2005 report to Congress, USTR reported that “very limited progress was achieved in

2005” in the agriculture sector. The report also stated that the United States “was less

successful” in resolving issues related to nontariff barriers through bilateral negotiations

during 2005 than in prior years,96 and that selective intervention in the market by China’s

regulatory authorities remained a key U.S. concern.97

U.S. and Chinese regulatory officials reached an agreement to facilitate cooperation on

animal and plant health safety issues at the July 2005 JCCT meeting.98 According to USTR,

China began to apply internationally-accepted guidelines with respect to imports of U.S.

poultry during 2005.99 Nevertheless, a variety of nontariff barriers continued to impede

access for U.S. agricultural exports,100 such as China’s ban on U.S. beef imports because of

concerns about BSE.101 During 2005, U.S. officials worked to encourage China to lift its ban

of U.S. beef imports.102 USTR raised U.S. concerns about beef market access at a meeting

with Chinese officials in Beijing in early November 2005,103 as did President Bush during

a summit meeting with China’s President Hu in late November 2005.104 In December 2005,

Chinese government officials reported that further consultations on market access for U.S.

beef were necessary, and agreed with USDA to create a joint animal and plant health

working group to further address Chinese concerns about U.S. beef safety.105
106 USTR, 2005 Report to Congress on China’s WTO Compliance, pp. 16-21. 107 Ibid., pp. 12-13. 108 Ibid. 109 Ibid., p. 13. 110 Ibid., pp. 20-21. 111 USTR, “Fact Sheet: The U.S.-China Joint Commission on Commerce and Trade (JCCT) Outcomes

on Major U.S. Trade Concerns,” July 11, 2005. 112 USTR, 2005 Report to Congress on China’s WTO Compliance, p. 17. 113 Ibid., p. 18. 114 U.S. Department of State telegram, “WTO Service Negotiations: China,” message reference No.

016559, prepared by U.S. Embassy, Beijing, Oct. 16, 2005. 115 USTR, 2005 Report to Congress on China’s WTO Compliance, pp. 74-75.

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Trading Rights and Distribution Services

According to USTR, one of the key U.S. trade policy goals in 2005 was to ensure that China

fully implemented its WTO commitments on trading rights (i.e., the right to import and

export) and distribution services, including wholesaling services, commission agents’

services, retail services, and franchising services.106 U.S. companies reported few problems

with the new trading rights registration process China implemented in July 2004.107

However, China did not implement its trading rights commitment with respect to imports of

pharmaceuticals, books, newspapers, and magazines during the year.108 In addition, USTR

reported that “having the right to trade—and, in particular, the right to import—is only

meaningful when coupled with the right to distribute goods within China, an area in which

China’s implementation progress has been slower.”109 USTR also reported concerns with

respect to China’s implementation of commitments to allow foreign participation in such

areas as joint ventures with minority foreign ownership in retailing services; retail level

gasoline sales; cross-border supply of franchising services; and sales away from a fixed

location (“direct selling”).110

In response to U.S. requests, China took steps during the year to clear a backlog of

distribution license applications, and prepared a guide for foreign businesses seeking to

acquire distribution rights. At the July 2005 JCCT meeting, China confirmed that all

enterprises in China could acquire distribution licenses, and committed to improve the

transparency of the application and approval process.111 In September 2005, China’s Ministry

of Commerce issued guidelines to make the distribution license application and approval

process more transparent.112 China also implemented several measures governing the

distribution of automobiles by foreign enterprises in 2005.113

Services

According to the U.S. State Department, “while China continued to keep pace nominally”

with its WTO market access commitment on services in 2005, China also undertook

measures to discourage or prevent foreign suppliers from gaining market access.114 In its

2005 report to Congress, USTR found restrictions imposed by China in sectors such as

insurance and legal services to “call into question commitments made by China in its [WTO]

Services Schedule.”115

In 2005, USTR reported that China took steps to open health, group, and pension/annuity

insurance to foreign participation. China also reportedly lifted some geographic restrictions
116 In early December 2005, the China announced the opening of seven more cities to foreign banks.

As a result, foreign banks are now able to conduct domestic currency business in 25 Chinese cities. Ibid., p. 76. 117 Ibid., p. 79. 118 Ibid., p. 84. 119 Ibid., pp. 77–88. 120 Ibid., p. 6. 121 On March 30, 2006, the United States requested WTO dispute settlement consultations with China

because of alleged unfair treatment of U.S. auto parts in the Chinese market. USTR, “United States Files WTO

Case Against China Over Treatment of U.S. Auto Parts,” press release, March 30, 2006. 122 Ibid. 123 USTR, “Fact Sheet: The U.S.-China Joint Commission on Commerce and Trade (JCCT) Outcomes

on Major U.S. Trade Concerns,” July 11, 2005. 124 Ibid., p. 8. 125 Ibid., p. 89.

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in the banking sector on or ahead of schedule.116 USTR reported that China fulfilled

commitments made at the April 2004 and July 2005 JCCT meetings by resuming a dialogue

on insurance issues,117 and also made progress with a promised dialogue on

telecommunications issues.118 However, USTR reported that during 2005 China continued

to impede market access for U.S. providers of insurance, telecommunications, financial

information, express delivery, construction, and engineering services through the use of

regulatory processes, licensing and operating requirements, and other means.119

Industrial Policies

According to USTR, China increasingly has used an array of industrial policies to limit

market access by non-Chinese origin goods or use government resources to support exports.

Such policies, according to USTR, support the development of higher-value Chinese

industries and protect less competitive domestic industries.120 Examples of such policies

during 2005 cited by USTR include regulations on auto parts tariffs that prolong prohibited

local content requirements;121 interference by telecommunications regulators in commercial

negotiations over royalty payments to IPR holders; the pursuit of unique national standards

in many areas of high technology that could lead to the extraction of technology or

intellectual property from foreign rights-holders; draft government procurement regulations

mandating purchases of Chinese-produced software; a new steel industrial development

policy that calls for the government management of nearly every major aspect of China’s

steel industry; and excessive government subsidization benefitting a range of domestic

industries in China.122 At the July 2005 JCCT meeting, the United States and China made

progress in resolving U.S. concerns regarding the draft software procurement regulations,

but disagreements remained over a number of other industrial policies.123

Transparency

According to USTR, China has made efforts to improve transparency across a wide range

of national and provincial authorities since its WTO accession. However, USTR reported

that many of China’s government agencies have not implemented changes required by

China’s WTO obligations and, as a result, China’s regulatory regime remained nontransparent during 2005.124 For example, China did not provide opportunities for public

comments on major trade-related laws and regulations, such as the new regulations on auto

parts tariffs.125 China also did not establish or designate an official journal dedicated to the

publication of all laws, regulations, and other measures affecting trade and trade-related
126 Ibid., p. 90. 127 Ibid., p. 38. China submitted its long overdue first subsidies notification to the WTO on April 13,

2006. USTR, “Trade Policy Review of China, Statement by Ambassador Peter Allgeier,” Geneva, April 19,

2006. 128 The global environment for U.S. trade in 2005 is described in chapter 1 of this report. For a

discussion of global imbalances during 2005, see IMF, World Economic Outlook, April 2006, p. 28. 129 China’s currency also is referred to as the renminbi. 130 For a more detailed discussion of the role of China’s currency in global imbalances, see IMF, World

Economic Outlook, April 2006, p. 37. 131 Ibid., pp. 11 and 14. 132 For further information on the petition, see the section in chapter 2 of this report entitled “Laws

Against Unfair Trade Practices—Section 301 Investigations.” 133 USTR, “Statement from USTR Spokesperson Richard Mills Regarding a Section 301 Petition on

China’s Currency Regime,” Washington, D.C., May 27, 2005. 134 U.S. Department of the Treasury, “Remarks of Under Secretary of the Treasury Timothy D. Adams

before the U.S.-China Business Council,” Washington, D.C., Sept. 15, 2005. 135 IMF, World Economic Outlook, September 2005, p. 34. 136 U.S. Department of the Treasury, “Remarks of Under Secretary of the Treasury Timothy D. Adams

before the U.S.-China Business Council,” Washington, D.C., Sept. 15, 2005.

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matters as it committed to in its WTO accession agreement.126 In addition, USTR reported

that China did not provide the WTO a detailed accounting of its subsidies, which is a key

requirement of the WTO Subsidies Agreement.127

Global Trade Imbalances and China’s Exchange Rate Regime

The U.S. merchandise trade deficit with China grew from $163.5 billion in 2004 to $203.8

billion in 2005, which accounted for 23.7 percent of the total U.S. trade deficit in 2005. The

growing U.S. trade deficit with China, increasing imbalances in the global economy, and the

impact of China’s currency valuation policies that limit exchange rate flexibility, were

subjects of concern for U.S. and foreign policymakers during 2005.128 According to the IMF,

greater exchange rate flexibility would allow the yuan129 to better respond to market forces

and help mitigate China’s large global surplus position.130 The IMF reported, “greater

exchange rate flexibility in China and some other countries” is necessary to allow global

markets to adjust to produce “rebalancing of demand across countries.”131

On April 20, 2005, USTR received a petition requesting it to initiate an investigation with

respect to China’s currency valuation policy of maintaining a fixed exchange rate vis-à-vis

the U.S. dollar.132 USTR determined not to initiate an investigation with respect to the

petition.133 U.S. and Chinese officials held meetings and consultations at various levels

during the year, including meetings hosted by the U.S. Department of the Treasury between

U.S. banking and securities regulators and their Chinese counterparts during the year to

discuss a variety of regulatory and safeguard issues related to China’s exchange rate

regime.134

On July 21, 2005, China implemented a 2 percent revaluation of its currency and announced

that the Chinese yuan would no longer be pegged to the U.S. dollar but, instead, would be

adjusted based on a basket of currencies and given an allowable daily fluctuation rate of 0.3

percentage point against the U.S. dollar.135 U.S. officials welcomed this action as an

important initial step to help address global imbalances, but stated that “[w]hat is important

now is that China allows the new exchange rate mechanism to move more closely into

alignment with underlying market forces.”136 In a joint statement issued at the end of the 17th

session of the China-U.S. Joint Economic Committee held in Beijing in October 2005,

Chinese officials committed to enhance the flexibility and to strengthen the role of market
137 U.S. Treasury, “Joint Statement, 17th Session of the China-U.S. Joint Economic Committee,” press

release, Oct. 17, 2005. 138 IMF, World Economic Outlook, April 2006, box 1.4, p. 30. 139 The increase in imports from Mexico of the leading crude oil import in this category—HTS

2709.00.10—was attributable to a 31-percent rise in the average unit values of imports. 140 NAFTA is discussed in more detail in chapter 4 of this report. Bilateral U.S. trade relations with

Canada, the third NAFTA partner, are discussed above.

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forces in China’s managed floating exchange rate regime.137 However, in early 2006 the IMF

reported that China’s currency “continues to move closely with the U.S. dollar, and the

additional flexibility the reform permits needs to be used more aggressively” to allow the

yuan to respond to market forces and appreciate.138

Mexico

In 2005, Mexico’s long-held position as the second largest single U.S. trading partner (based

on two-way trade) slipped to third place after Canada and China. This was the first year that

China outranked Mexico as a U.S. trading partner. U.S. merchandise exports to Mexico were

valued at $102 billion in 2005, an increase from $93 billion in 2004 (by 9.3 percent), and

from $83 billion in 2003. U.S. merchandise imports from Mexico amounted to $169 billion

in 2005, an increase from $155 billion in 2004 (by 9.2 percent) and from $137 billion in

2003. The U.S. merchandise trade deficit with Mexico amounted to $67.5 billion in 2005,

widening once again, from $61.9 billion in 2004 and $54.0 billion in 2003. 

Machinery and transportation equipment continued to be the largest product group in

bilateral trade, of which automotive trade was an important component in both directions.

U.S. exports to Mexico were up in all major SITC product categories in 2005, except animal

and vegetable oils, fats, and waxes. U.S. imports from Mexico also increased in all SITC

product categories, especially mineral fuels (by approximately one-third), as a result of

sharply higher petroleum prices during the year.139 U.S.-Mexican trade data are shown in

tables A-31 through A-33.

U.S.-Mexican trade relations are governed in large part by NAFTA, which provides dutyfree status for substantially all bilaterally traded goods originating in the United States and

Mexico, and underlying WTO obligations.140 Major trade-related issues in 2005 between the

United States and Mexico included a number of trade disputes that were the subject of WTO

and NAFTA dispute settlement proceedings. The more procedural developments in each of

these cases are listed in tables A-20 and A-21. Recent developments in three cases are

summarized below—Mexican antidumping duties on U.S. long-grain white rice, U.S.

antidumping duties on Mexican cement, and Mexican taxes on soft drinks and beverages that

contain high-fructose corn syrup (HFCS).

Mexican Antidumping Duties on U.S. Long-Grain White Rice

This dispute concerns a U.S. challenge under the WTO dispute settlement process of

antidumping duties imposed by Mexico in 2000 and 2002 on imports of U.S. long-grain

white rice. Following a U.S. request, a WTO dispute settlement panel was established in
141 The U.S. request questioned various procedures and methodologies Mexican authorities used in the

rice investigation, including the methodology for determining whether Mexican industries were injured by reason

of dumped imports; the failure to terminate the investigation when no dumping or injury was found; calculations

of the dumping duty rates applied to imports from the United States; and the non-transparent nature of the

determinations. The U.S. request also challenged certain requirements of the Mexican legislation. WTO,

“Mexico—Definitive Anti-Dumping Measures on Beef and Rice, Complaint with Respect ro Rice,” Appellate

Body Report, WT/DS295/AB-R, Nov. 29, 2005; and USTR, “United States Wins WTO Challenge,” press

release, Nov. 29, 2005. 142 WTO, “Mexico—Definitive Anti-Dumping Measures on Beef and Rice, Complaint with Respect

to Rice,” Dispute Panel Report, WT/DS/295, June 6, 2005, and USTR, “United States Wins WTO Challenge

Against Mexican Rice Duties,” press release, June 7, 2005. 143 WTO, “Mexico—Definitive Anti-Dumping Measures on Beef and Rice,” Appellate Body Report,

WT/DS295/AB/R, Nov. 29, 2005, AB-2005-6. 144 WT/DS295/AB-R, and USTR, “United States Wins WTO Challenge,” press release, Nov. 29, 2005. 145 USITC, Gray Portland Cement and Cement Clinker from Mexico, Inv. No. 731-TA-451 (Final),

publication 2305, August 1990. 146 USITC, Gray Portland Cement and Cement Clinker from Mexico, Inv. No. 731-TA-451 (Review),

publication 3361 , October 2000.

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November 2003 to review the U.S. complaint that the Mexican action was inconsistent with

Mexico’s WTO obligations.141

On June 6, 2005, the WTO panel issued a report upholding virtually all of the U.S. claims

concerning Mexico’s affirmative antidumping determination, finding Mexico’s injury

determination to be inconsistent with the WTO Antidumping Agreement. Specifically, the

panel found that Mexico, without reasonable explanation, based its injury analysis on other

information and failed to examine much of the injury data collected. The panel also agreed

with the United States that Mexico improperly applied its antidumping measure to two U.S.

exporters who had been found not to be dumping. The panel also found several provisions

of Mexico’s antidumping and countervailing duty law to be inconsistent with Mexico’s

obligations under the WTO Antidumping Agreement and the WTO Agreement on Subsidies

and Countervailing Measures.142

Mexico appealed most of the panel’s findings, and the WTO Appellate Body affirmed those

findings, with one exception, in a report issued on November 29, 2005.143 The panel and

Appellate Body reports were formally adopted by the DSB on December 20, 2005.144

U.S. Antidumping Duties on Mexican Cement

U.S. antidumping orders on Mexican gray portland cement and cement clinker (“cement”)

were the subject of a number of ongoing dispute settlement cases during 2005, under the

WTO dispute settlement process and the NAFTA Chapter 19 binational dispute mechanism.

Commerce issued the orders in 1990 after it found that imports of cement from Mexico were

sold at less than fair value and the Commission made an affirmative injury determination.145

These orders have been the subject of a number of administrative reviews by Commerce and

were continued in 2000 after Commerce and the Commission both made affirmative fiveyear review determinations regarding subject imports of cement from Mexico.146 Mexican

parties challenged both before WTO and NAFTA panels (1) Commerce’s five-year review

findings, (2) the Commission’s affirmative five-year review determination, and (3)

Commerce’s administrative review findings.
147 WTO, “United States—Anti-Dumping Measures on Cement from Mexico—Request for the

Establishment of a Panel by Mexico,” WT/DS281/2, Aug. 8, 2003. 148 WTO, “United States—Anti-Dumping Measures on Cement from Mexico—Communication from

the Chairman of the Panel,” WT/DS281/6, Jan. 17, 2006. 149 NAFTA Secretariat, “Article 1904 Binational Panel Review Under the North American Free Trade

Agreement in the Matter of Gray Portland Cement and Clinker from Mexico (Five-Year Review)—Decision of

the Panel,” USA-MEX-2000-1904-10, June 24, 2005. 150 See 71 FR 13082. 151 NAFTA Secretariat, “Article 1904 Binational Panel Review Under the North American Free Trade

Agreement in the Matter of Gray Portland Cement and Clinker from Mexico—Final Results of the Sixth

Antidumping Administrative Review—Opinion and Order of the Panel,” USA-98-1904-02, May 26, 2005. 152 NAFTA Secretariat, “Article 1904 Binational Panel Review Under the North American Free Trade

Agreement in the Matter of Gray Portland Cement and Clinker from Mexico—Final Results of the Sixth

Antidumping Administrative Review—Opinion and Order of the Panel Concerning the Final Results of the First

Redetermination by the Department of Commerce,” USA-98-1904-02, Nov. 3, 2005. 153 See 71 FR 13082. 154 The tax is also imposed on the commissioning, mediation, agency, representation, brokerage,

consignment, and distribution of soft drinks and beverages using sweeteners other than cane sugar. The

(continued...)

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Mexico challenged under the WTO dispute settlement process the Commission’s and

Commerce’s five-year review determinations, Commerce’s fifth through eleventh

administrative reviews, and the Commission’s dismissal of a request for changed

circumstances review.147 The panel was expected to complete its work in the beginning of

2006, but the proceeding was suspended until further notice at the request of Mexico on the

basis that the United States and Mexico were entering into a settlement agreement.148

Mexican parties challenged in separate actions under the NAFTA binational dispute

mechanism Commerce’s administrative review findings (fifth through fourteenth),

Commerce’s five-year review findings, the Commission’s affirmative five-year review

determination, and the Commission’s dismissal of the request for changed circumstances

review. On June 24, 2005, the NAFTA panel reviewing the Commission’s five-year review

determination remanded the case to the Commission.149 On September 22, 2005, the

Commission issued its remand determination, again making an affirmative five-year review

determination. This proceeding has since been stayed in response to a consent motion filed

by the parties resulting from the settlement agreement between the United States and

Mexico.150

In addition, during 2005 the NAFTA panel reviewing Commerce’s sixth administrative

review of the original antidumping duty orders issued a decision on May 26, 2005, affirming

in part and remanding in part Commerce’s findings.151 In response, Commerce filed its

remand determination with the panel on July 25, 2005. The panel issued a decision on

November 3, 2005, again affirming in part and remanding in part Commerce’s first remand

determination.152 This proceeding, subsequently, was terminated in response to a consent

motion filed by the parties resulting from the settlement agreement between the United States

and Mexico. The NAFTA binational panel proceeding involving dismissal of a request for

changed circumstances review was likewise terminated by consent.153

Mexican Taxes on Certain Beverages 

This case concerns a U.S. challenge under the WTO dispute settlement process of a beverage

tax imposed by Mexico in 2002 on soft drinks and other beverages—as well as on syrups

and other products that can be diluted to produce such drinks and beverages—containing

sweeteners other than cane sugar.154 The United States was the largest supplier of non-sugar
154 (...continued)

imposition of the tax was preceded by lengthy Mexican antidumping action against the imports of HFCS from

the United States. In 1997, the United States challenged in the WTO Mexican antidumping duties on imported

HFCS. The WTO adopted the findings of the dispute-settlement panel and the Appellate Body that Mexico’s

antidumping duties were inconsistent with the WTO Antidumping Agreement. In 2002, a NAFTA binational

panel ruled against Mexico’s antidumping duties on U.S. HFCS. Mexico removed the duties in May 2002. The

Mexican government subsequently imposed the beverage tax. USTR, “U.S. Wins Mexico Beverage Tax Dispute”

press release, Mar. 6, 2006, and “U.S. Requests WTO Panel against Mexico Over Beverage Tax,” press release,

June 22, 2004. 155 USTR, “United States Files WTO Case Against Mexico Over Two Discriminatory Beverage Taxes,”

press release, Mar. 16, 2004; WTO, “Mexico—Tax Measures on Soft Drinks and Other Beverages—Request

for Consultations by the United States,” WT/DS308/1, June 2004; and WTO “Mexico—Tax Measures on Soft

Drinks and Other Beverages—Report of the Panel,” WT/DS308/R, Oct. 7, 2005. 156 The WTO panel ruled that the discriminatory nature of the Mexican tax violated the national

treatment provisions of Article III:2 and III:4 of the GATT. WTO, “Mexico—Tax Measures on Soft Drinks and

Other Beverages—Report of the Panel,” WT/DS308/R, Oct. 7, 2005; and USTR, “U.S. Wins Mexico Beverage

Tax Dispute” press release, Oct. 7, 2005. 157 “Mexico Renews HFCS Tax for One Year After Defeat of Wider Exemption,” Inside U.S. Trade,

Nov. 18, 2005. 158 WTO, “Mexico—Tax Measures on Soft Drinks and Other Beverages—Report of the Appellate

Body,” WT/DS308/AB/R, Mar. 6, 2006. 159 WTO, “Dispute Settlement, Dispute DS308: Mexico—Tax Measures on Soft Drinks and Other

Beverages—Summary of the Dispute to Date,”

http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds308_e.htm (accessed June 30, 2006).

5-23

sweeteners used by the Mexican beverage industry. Efforts by the United States and Mexico

to find a negotiated resolution of this issue were not successful. The United States requested

WTO dispute consultations with Mexico in March 2004, and subsequently requested

establishment of a WTO dispute panel; the panel was established in July 2004.155

On October 7, 2005, the panel found Mexico’s beverage tax to be inconsistent with Mexico’s

WTO national treatment obligations prohibiting a member from imposing higher taxes on

an imported product than on the directly competitive domestic product—in this case

beverages that contain HFCS, as opposed to beverages that contain sugar.156 Despite the

WTO ruling, the Mexican legislature approved a one-year extension of the beverage tax in

November 2005.157

Mexico appealed the panel findings to the Appellate Body; the Appellate Body affirmed the

panel on most points,158 and the panel’s findings, as amended by the Appellate Body, were

adopted on March 24, 2006.159

Japan

U.S. merchandise exports to Japan amounted to $51.5 billion in 2005, a 2.0 percent increase

from $50.5 billion in 2004. U.S. merchandise imports from Japan totaled $137.8 billion in

2005, a 6.4 percent increase from $129.5 billion in 2004. The U.S. merchandise trade deficit

with Japan amounted to $86.3 billion in 2005, which was $7.3 billion larger than the year

before. Leading U.S. exports to Japan during the year included airplanes and other aircraft;

parts of airplanes or helicopters; corn; repairs or alterations of previously imported articles;

and cigarettes containing tobacco. Leading U.S. imports from Japan included passenger

motor vehicles; computer parts and accessories; still image video cameras and other video

recorders; motor vehicle parts and accessories; as well as gear boxes for motor vehicles.

U.S.-Japan trade data are shown in appendix tables A-34 through A-36. 
160 For background information on the U.S.-Japan Economic Partnership for Growth , see USITC, The

Year in Trade, 2002, pp.5-20 to 5-51. 161 USTR, 2006 Trade Policy Agenda, and 2005 Annual Report, and USITC Data Web. 162 Japan was one of several countries that banned imports of U.S. beef and beef products in December

2003 after a cow of Canadian origin, found in a U.S. herd, was determined to be infected with BSE. The impact

of BSE on U.S. trade during 2005 is discussed in chapter 1 of this report. 163 U.S. Embassy, Tokyo, “U.S. Statement at WTO on Japan’s Beef Import Ban,” press release, Mar.

9, 2005. 164 U.S. Embassy, Tokyo, “U.S. Delegation on Beef Ends Japan Visit with Media Briefing,” press

release, Apr. 27, 2005. 165 On June 24, 2005, USDA announced that a cow in the United States that had conflicting BSE test

results in 2004 was confirmed as BSE-positive. USDA “USDA Announces BSE Test Results and New BSE

Confirmation Testing Protocol,” press release No. 0232.05, June 24, 2005. 166 U.S. Department of State, “Japan Reopens Market to Imports of U.S. Beef,” press release, Dec. 13,

2005. 167 U.S. Embassy, Tokyo, “United States Acts Quickly to Address Japan’s Concerns about Beef,” press

release, Jan. 23, 2006.

5-24

The U.S.-Japan Economic Partnership for Growth (Partnership) has served as the primary

forum for trade and economic dialogue between the two countries since its establishment in

2001.160 In 2005, discussions under this framework focused on reopening the beef markets

of both countries to bilateral trade, as well as on deregulation within Japan’s economy.

Beef

The United States and Japan restricted beef imports from one another throughout most of

2005. However, both countries reopened their markets to bilateral beef trade by December

2005. The reopening of Japan’s beef market to U.S. exports was particularly noteworthy, as

Japan was the single-largest market for U.S. beef in 2003 prior to its closure. U.S. exports

of beef and beef products to Japan amounted to $1.3 billion in 2003, or 38 percent of total

U.S. beef exports.161

Liberalization of Japanese Import Restrictions on U.S. Beef

During 2005, the United States undertook two major initiatives to end Japan’s

comprehensive ban on U.S. beef imports that was imposed in 2003.162 In March 2005, the

United States brought its concerns to the attention of the WTO Sanitary and Phytosanitary

Committee, stating that Japan should reopen its market to U.S. beef as the United States had

addressed all internationally accepted scientific concerns about its safety.163 In April 2005,

a U.S. delegation visited Japan to explain the safety, quality, and production system of U.S.

beef with respect to BSE.164 Bilateral consultations continued despite a second confirmed

U.S. BSE case.165

Japan lifted its ban on imports of certain U.S. beef products on December 13, 2005, making

more than 90 percent of total U.S. beef and beef products eligible for importation into

Japan.166 However, the new Japanese provisions excluded imports of U.S. beef and beef

products that, among other things, were shipped in boxes that also contained beef products

deemed at risk for BSE by Japanese standards. Japan re-imposed a ban on certain beef

imports from the United States on January 20, 2006, after the discovery of three boxes of

imported U.S. beef that were shipped together with cattle backbone.167 While shipping such

products together was permitted in the United States, it was not permissible in Japan and,

consequently, the shipment failed to meet the terms of Japan’s December 2005 commitment
168 An investigation by the USDA Food Safety and Inspection Service completed in February 2006

determined that the incident was the result of inadequate familiarity on the part of the exporter and USDA

inspector with the specific products that were eligible for shipment to Japan. USDA subsequently announced the

introduction of 12 action steps to prevent such actions from reoccurring. USDA, “USDA Report on Beef Exports

to Japan,” Feb. 17, 2006. 169 USDA, “USDA Amends Regulations Governing the Importation of Whole Cuts of Boneless Beef

From Japan,” press release 0546.05, Dec.12, 2005. 170 Ibid. 171 Ibid. 172 USTR, “Fourth Report to the Leaders on the U.S.-Japan Regulatory Reform and Competition Policy

Initiative,” Fact Sheet, Nov. 2, 2005, and USTR, “Annual Reform Recommendations from the Government of

the United States to the Government of Japan Under the U.S.-Japan Regulatory Reform and Competition Policy

Initiative,” Dec. 7, 2005. 173 U.S. Department of State, Bureau of East Asian and Pacific Affairs, “U.S.-Japan Economic

Partnership for Growth: U.S.-Japan Investment Initiative 2005 Report,” July 7, 2005. 174 Ibid. 175 USTR, “Fourth Report to the Leaders on the U.S.-Japan Regulatory Reform.” 176 Ibid.

5-25

to allow U.S. beef imports. The two countries initiated bilateral dialogue in early 2006 to

prevent the latest Japanese beef import restrictions from jeopardizing the progress made in

the previous two years.168

Liberalization of U.S. Import Restrictions on Japanese Beef

In 2005, the U.S.-Japan bilateral negotiations on the liberalization of their respective beef

markets also led to the amendment of U.S. practices with respect to imports of whole cuts

of boneless beef from Japan.169 The United States prohibited beef and beef product imports

from Japan in September 2001 following a confirmed case of a BSE-infected cow in

Japan.170 In late 2005, the Japanese government requested the United States to reconsider its

ban on beef imports from Japan in light of international guidelines provided by the World

Organization for Animal Health on the safe trade of animal products with countries that had

confirmed cases of BSE. On December 12, 2005, the United States announced it that would

allow whole cuts of beef imports from Japan provided that certain conditions, such as the

implementation of the U.S. standard for removing specified-risk materials, were met.171

Deregulation

During 2005, bilateral dialogue on the deregulation of Japan’s economy continued under a

component of the Partnership known as the Regulatory Reform and Competition Policy

Initiative (“Regulatory Reform Initiative”). Discussions focused on Japan’s 2005

deregulation initiatives and U.S. recommendations for subsequent reform.172

The Japanese government undertook a series of cross-sectoral reform initiatives in 2005 in

response to U.S. concerns about competitive conditions for U.S. businesses operating in

Japan. Among those initiatives were corporate law reforms to increase incentives for foreign

investors;173 amendments to the antimonopoly law to increase fines and whistle-blowing

incentives associated with cartels and bid-rigging activities;174 and new procedures to create

a more transparent and accountable regulatory system for foreign businesses operating in

Japan.175 The Japanese government also authorized an increase in the number of special

zones, or deregulated environments, from which foreign firms can operate.176
177 USTR, “Annual Reform Recommendations.” 178 USTR, “Fourth Report to the Leaders on the U.S.-Japan Regulatory Reform.” 179 Ibid. 180 USTR, “Annual Reform Recommendations.” 181 USTR, “United States Presents Japan with Comprehensive Regulatory Reform Recommendations,

Also Convenes Bilateral Trade Forum,” press release, Dec. 7, 2005.

5-26

In 2005, Japan also initiated several sector-specific reforms to promote competition. The

privatization of Japan Post, for example, was designed to open Japan’s banking, insurance,

and express delivery sectors to domestic and foreign competition by terminating all special

advantages previously afforded to the state-owned corporation.177 Other sectoral reforms

included market-opening initiatives in the oligopolistic mobile telecommunications sector

to give foreign market entrants priority in the allocation of new spectrum licenses,178 and

incentives for foreign energy companies to produce, sell, and trade electricity and gas-related

products and services in the future.179

The United States submitted its annual deregulation reform recommendations to the

Government of Japan on December 7, 2005, outlining steps Japan can take to further open

and expand its market.180 The recommendations focused on the telecommunications,

information technology, pharmaceutical, and financial services sectors, as well as crosssectoral issues such as competition policy, commercial law, transparency, and privatization.

The recommendations emphasized the importance of strengthening Japan’s antimonopoly

enforcement; securing competitive banking, insurance, and express delivery service markets

in the wake of the Japan Post privatization; reforming Japan’s healthcare pricing policies in

the medical devices and pharmaceutical sector to better reward innovation; establishing a

competitive telecommunications market; and creating a more efficient distribution system

that will allow traded goods to move efficiently and inexpensively through Japanese

customs.181

Taiwan

In 2005, Taiwan was the eighth largest U.S. trading partner, with bilateral two-way

merchandise trade totaling $55.1 billion. The value of U.S. trade with Taiwan in 2005 was

almost unchanged from 2004. In 2005, U.S. merchandise exports to Taiwan totaled $20.5

billion, U.S. merchandise imports from Taiwan totaled $34.6 billion, and the United States

recorded a $14.0 billion merchandise trade deficit with Taiwan. Leading U.S. exports to

Taiwan in 2005 included integrated circuits, aircraft, machines and mechanical appliances

having individual functions (mostly semiconductor production machinery), corn, soybeans,

and machine tools for dry etching patterns on semiconductor materials. Leading U.S. imports

from Taiwan included integrated circuits, parts and accessories of computers, magnetic

media, and unfinished color reception apparatus for televisions. U.S.-Taiwan merchandise

trade statistics are listed in appendix tables A-37 through A-39.

The U.S.-Taiwan trade relationship during 2005 continued to focus on improving IPR

protection in Taiwan, enhancing market access for U.S. rice and beef, and addressing U.S.

pharmaceutical sector’s concerns regarding Taiwan’s reimbursement policies on domestic

pharmaceutical products.
182 USTR, “United States Announces Results of IPR Out-of-Cycle Reviews for Poland and Taiwan,”

press release Jan. 18, 2005. 183 American Institute in Taiwan (AIT), “Remarks by Douglas H. Paal, Director, American Institute

in Taiwan, to the annual general meeting of the American Chamber of Commerce in Taipei,” Nov. 22, 2005. 184 International Intellectual Property Alliance, 2006 Special 301 Report: Taiwan,

http://www.iipa.com/rbc/2006/2006SPEC301TAIWAN.pdf. 185 AIT, “Remarks by Douglas H. Paal.” 186 U.S. Department of State, “Abolition of Taiwan’s Anti-Counterfeiting Committee” message

reference No. 206883, prepared by U.S. Department of State, Washington, DC, Nov. 10, 2005. 187 Intellectual Property Office, Ministry of Economic Affairs, Republic of China “April–June, 2005

Quarterly Report on Taiwan’s Intellectual Property Rights protection.” Taipei, June 2005, p. 1. 188 USTR, 2006 Trade Policy Agenda and 2005 Annual Report, p. 192. 189 U.S. Department of State telegram, “Taiwan DOH Promises Data Exclusivity Regulations,” message

reference No. 003807, prepared by American Institute in Taiwan, Taipei, Sep. 14, 2005; and American Institute

in Taiwan, “Remarks by Douglas H. Paal, Director, American Institute in Taiwan to the 2005 Hsieh Nien Fan

of American Chamber of Commerce in Taipei,” AIT official text BG-0502E, March 10, 2005.

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Intellectual Property Rights

In January 2005, USTR announced that it had removed Taiwan from the special 301 priority

watch list to the watch list after determining that Taiwan had made sufficient progress in

addressing long-standing U.S. concerns on piracy and counterfeiting of U.S. intellectual

property and products.182 During 2005, Taiwan continued its efforts to improve IPR

enforcement by intensifying actions against manufacturers and retailers engaged in

counterfeiting and piracy. As a result, seizures of pirated goods increased, and offenders

received longer and stiffer sentences.183

As traditional counterfeit and infringement activities declined because of the increased

strength of IPR enforcement in Taiwan, piracy of copyrighted works, illegal peer-to-peer

downloading, and sales of counterfeit merchandise over the Internet have emerged as the

major forms of IPR violation in 2005.184 U.S. officials urged Taiwan to take further actions

against the increasingly widespread piracy via the internet185 and to maintain positive

momentum on IPR issues, including continued aggressive enforcement and establishment

of the promised IPR court.186

To deter internet piracy, in 2005 the Taiwan Intellectual Property Office (TIPO) established

two new work programs to enhance computer software protection and to strengthen

preventive measures against Internet infringement.187 TIPO also created a joint Internet

infringement inspection special task force, and undertook efforts to strengthen cooperation

with enforcement agencies in other countries. However, USTR reported that Taiwan’s efforts

to use the legal system to shut down Internet infringement activities met with mixed

results.188 Other major steps to improve IPR protection during the year was the approval of

a bill by Taiwan’s legislature to prevent unfair commercial use of pharmaceutical test

data—a TRIPS commitment.189

Agriculture

Taiwan remained an important market for U.S. agriculture, importing more than $2.3 billion

of U.S. agricultural products in 2005. Taiwan’s continued ban on U.S. beef imports and

Taiwan’s rice import system were major U.S. concerns during 2005.
190 Taiwan was one of several countries that banned imports of U.S. beef and beef products in

December 2003 after a cow of Canadian origin, found in a U.S. herd, was determined to be infected with BSE.

The impact of BSE on U.S. trade with selected partners is discussed in chapter 1 of this report. 191 On June 24, 2005, USDA announced that a cow in the United States that had conflicting BSE test

results in 2004 was confirmed as BSE-positive. USDA, “USDA Announces BSE Test Results and New BSE

Confirmation Testing Protocol,” press release No. 023205, June 24, 2005. 192 AIT, “Remarks by Douglas H. Paal.” 193 AIT, “AIT Welcome Return of U.S. Beef to Taiwan Market,” press release, Jan. 25, 2006. 194 Parts like brains, spinal cords, and bones remained banned because Taiwan considered them to carry

a higher infection risk. USTR, 2006 Trade Policy Agenda and 2005 Annual Report, March 1, 2006, p. 191. 195 Official Announcement by Department of Health, Executive Yuan, Republic of China, Taipei,

Taiwan, Jan. 25, 2005. No complete English translation exists, but it was summarized in English by USDA, FAS,

“Taiwan Livestock and Products, Semi-Annual 2006,” Gain Report No. TW6004, Jan. 27, 2006. 196 USTR, the 2006 National Trade Estimate Report on Foreign Trade Barriers, p. 624. 197 Before Taiwan acceded to the WTO, it prohibited all imports of rice. Taiwan’s change to a TRQ

system for rice was submitted to the WTO in October 2002. In December 2002, Taiwan passed enabling

legislation without prior consultation with WTO members, triggering a formal objection from the United States,

Australia, and Thailand in the WTO. Among other things, the objections were based on Taiwan’s lack of

consultation and the high out-of-quota duty. USDA, Taiwan: Grain and Feed, Annual 2004, Apr. 30, 2004, GAIN

Report No. TW4017. See also U.S. Department of State telegram, “Taiwan and Country-Specific Quotas for

Rice,” message reference No. 04108, prepared by American Institute in Taiwan, Taipei, Oct. 12, 2005. 198 They are Australia, Thailand, and Egypt (not a party to the original WTO objection). 199 USTR, 2006 Trade Policy Agenda and 2005 Annual Report, p. 191.

5-28

Beef

Taiwan reopened its market to U.S. beef imports on April 16, 2005,190 but re-imposed

restrictions on U.S. beef imports on June 25, 2005, after the announcement that a cow in the

United States had tested positive for BSE.191 U.S. and Taiwanese officials consulted during

the year to re-open Taiwan’s market to U.S. beef. After providing Taiwan technical

information on the safety of U.S. beef, products,192 U.S. officials announced on January 25,

2006 that Taiwan had again agreed to lift its ban on U.S. boneless beef and beef products.193

Taiwan agreed to lift the ban under four conditions. The imported beef:

• must be from calves less than 30 months and slaughtered after April 16, 2005;

• must have the bones, nerves and spinal cord removed;194

• must come from USDA-approved butcher and packing houses; and

• must carry safety certificates issued by USDA.195

Rice

On January 1, 2005, in line with its WTO commitments, Taiwan eliminated TRQs on a

number of agricultural products, including chicken meat, pork bellies and offal, and poultry

offal.196 However, implementation of Taiwan’s rice import regime remained problematic

with respect to country-specific quotas for the public sector portion of Taiwan’s overall rice

import quota.197 The United States and Taiwan made substantial progress during the year in

resolving this last outstanding difference on Taiwan’s rice procurement arrangements.

However, Taiwan’s other main rice suppliers did not agree to the proposed modifications to

Taiwan’s rice import system during 2005.198 As a result, Taiwan maintained its rice import

regime pending final resolution of the issue.199
200 Ibid., p. 192. 201 Ibid. 202 Ibid. 203 USTR, the 2006 National Trade Estimate Report on Foreign Trade Barriers, p. 629. 204 U.S. Department of State, “Taiwan’s Plan to Cut Health Costs Worries Phrma,” message reference

No. 04882, prepared by AIT, Taipei, Dec. 14, 2005. AIT assisted U.S. pharmaceutical manufacturers in

establishing regular bimonthly consultations with Taiwanese authorities in 2006. In addition, in bilateral trade

and investment framework agreement talks between the United States and Taiwan that took place in Taipei

during May 25-26, 2006, the two sides agreed on further cooperation to ensure a transparent, accurate and fair

process in pharmaceutical pricing. U.S. Department of State, “Taipei Economic Brief for May,” message

reference No. 01918, prepared by AIT, Taipei, June 5, 2006.

5-29

Pharmaceuticals

A continuing U.S. concern during 2005 was Taiwan’s reimbursement policy for domestic

pharmaceutical products. Hospitals and doctors in Taiwan buy domestically-manufactured

generic drugs at discounted prices, and are later reimbursed by the Taiwanese government

at a fixed rate higher than the purchase price.200 According to USTR, such practices benefit

Taiwanese generic manufacturers at the expense of foreign producers.201

In July 2002, in an effort to lower health care costs at selected locations, Taiwan introduced

a new medical reimbursement system (the “global budget” program) that caps hospital

reimbursements for medical supplies such as pharmaceutical products. In practice, this

program has led to increased pressure on pharmaceutical suppliers to provide discounted

products. Taiwan announced plans to extend this reimbursement program to all hospitals and

medical centers in 2006.202 U.S. pharmaceutical companies have expressed the concern that

this program would encourage medical centers to switch to lower-cost generic drugs at the

expense of imported patented products and unfairly disadvantage U.S. pharmaceutical

manufacturers.203 To address this concern, Taiwan-based representatives of U.S.

pharmaceutical companies met with representatives of Taiwanese health care authorities in

Taipei on December 14, 2005 to discuss the details of the reimbursement program available

at that time. Taiwan promised to give U.S. companies time to review the details of the

proposal, but did not provide any specific date by which the details of the program would

be finalized.204

Korea

U.S. two-way trade with Korea totaled $69.4 billion in 2005. U.S. merchandise exports to

Korea grew 4.9 percent to $26.2 billion in 2005, after rising 11.0 percent in 2004. U.S.

merchandise imports fell 4.2 percent to $43.2 billion, after rising 22.0 percent in 2004. The

United States recorded a $16.9 billion merchandise trade deficit with Korea in 2005. Leading

U.S. exports to Korea during the year included computer chips, aircraft, and machines and

mechanical appliances having individual functions (mostly semiconductor production

machinery). Leading U.S. imports from Korea include automobiles, transmission apparatus

incorporating reception apparatus (mostly cellular phones), computer chips, and computer

parts and accessories (mainly memory modules). U.S.-Korea trade data are shown in

appendix tables A-40 through A-42.

The U.S.-Korean trade relations during 2005 focused on improving Kore’s IPR protection,

Korea’s remaining restrictions on U.S. beef imports, and the initiation of U.S.-Korea FTA

negotiations.
205 USTR, “Korea,” 2006 National Trade Estimate Report on Foreign Trade Barriers, p. 403. 206 USTR, 2005 Special 301 Report, Apr. 29, 2005. USTR has moved Korea between the watch list and

the priority watch list several times in the recent past because of deficiencies and improvements in its IPR

protection regime. It was elevated to the priority watch list in 2000, moved to the watch list in 2002, and elevated

to the priority watch list in early 2004 as a result of an out-of-cycle review. For a recent history, see The Year

in Trade, 2004, pp. 5-29 to 5-30. 207 USTR, “Korea,” 2006 National Trade Estimate Report on Foreign Trade Barriers, pp. 403–405,

and 2006 Special 301 Report. 208 USTR, “Korea,” 2005 National Trade Estimate Report on Foreign Trade Barriers, p. 374, and U.S.

Department of State telegram, “IPR: Greater Aggression by Government and Courts Brings Sound Recording

Protection into the Public Eye,” message reference No. 931, prepared by U.S. Embassy, Seoul, Feb. 25, 2005. 209 U.S. Department of State telegram, “National Assembly Sub-committee Discusses Copyright

Amendment Proposals,” message reference No. 5083, prepared by U.S. Embassy, Seoul, Nov. 28, 2005. 210 U.S. Department of State telegrams, “IPR: Greater Aggression by Government and Courts Brings

Sound Recording Protection into the Public Eye,” message reference No. 931, prepared by U.S. Embassy, Seoul,

Feb. 25, 2005; “Korea’s IPR Master Plan: and Update,” message reference No. 4551, prepared by U.S. Embassy,

Seoul, Oct. 17, 2005; and “National Assembly Sub-committee Discusses Copyright Amendment Proposals,”

message reference No. 5083, prepared by U.S. Embassy, Seoul, Nov. 28, 2005. 211 USTR, 2005 Special 301 Report, Apr. 29, 2005; USTR, 2006 Trade Policy Agenda and 2005, p.

169; USTR, 2006 National Trade Estimate Report on Foreign Trade Barriers, p. 403; and U.S. Department of

(continued...)

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Intellectual Property Rights

Korea increased IPR enforcement on several fronts during 2005. USTR reported that

meaningful improvements made by Korea included the introduction of legislation to

establish protection for sound recordings transmitted over the Internet using both peer-topeer and web-casting services; the implementation of regulations that restore the ability of

the Korea Media Rating Board to take necessary steps to stop film piracy; and increased

enforcement activities by the Standing Inspection Team against institutions using illegal

software.205 Korea was subsequently moved from the special 301 priority watch list to the

watch list in April 2005 as a result of improvements in IPR legislation, regulations, and

enforcement activities.206

Korea has one of the most sophisticated digital infrastructures in the world, but poor legal

protection for IPR had led to high rates of Internet piracy for sound recordings of U.S.,

Korean, and other artists. Illegal free downloads of music from the Internet had become

rampant in Korea. Korea’s copyright laws had been inadequate to stop illegal downloads,

leading the United States to call for their strengthening.207

On October 16, 2004, the Korean National Assembly passed amendments to the Copyright

Act that granted exclusive interactive transmission rights to performers and sound recording

producers, effective January 17, 2005. Under these amendments, only performers and

phonogram (sound recording) producers themselves can transmit their performances or

phonograms through such means as posting copies on websites for downloading on demand.

Others who want to transmit phonograms over the internet must seek prior permission from

the right holder.208 These amendments did not cover all of the transmission rights called for

in the 2003 special 301 report. Amendments to provide transmission rights for noninteractive transmissions, such as webcasting, streaming, and digital broadcasting, were

introduced in 2005, but have not yet been passed.209 Part of the motivation for strengthening

its IPR regime stems from increased production of intellectual property in Korea, such as the

“Korean wave” of popular music, TV dramas, and movies that is currently popular in much

of Asia.210 While expressing satisfaction in the improvement of Korea’s IPR regime, the

United States has noted a number of areas for further action to protect the rights of owners

of intellectual property.211
211 (...continued)

State telegram, “Korea: 2005 Special 301 Notification (Intellectual Property),” message reference No. 79052,

prepared by U.S. Department of State, Washington, DC, Apr. 28, 2005. 212 Korea was one of several countries that banned imports of U.S. beef and beef products in December

2003 after a cow of Canadian origin, found in a U.S. herd, was determined to be infected with BSE. The impact

of BSE on U.S. trade with selected partners is discussed in chapter 1 of this report. USTR, “Korea,” 2005

National Trade Estimate Report on Foreign Trade Barriers, Mar. 30, 2005, p. 364, and USTR, 2005 Trade

Policy Agenda and 2004 Annual Report, Mar. 1, 2005, p. 202. 213 On June 24, 2005, USDA announced that a cow in the United States that had conflicting BSE test

results in 2004 was confirmed as BSE-positive. USDA, “USDA Announces BSE Test Results and New BSE

Confirmation Testing Protocol,” press release No. 0232.05, June 24, 2005. 214 USTR, “Korea,” 2006 National Trade Estimate Report on Foreign Trade Barriers, Mar. 31, 2006,

p. 397. On Jan. 13, 2006, U.S. officials announced that the United States and Korea had agreed on an initial

import protocol, which would allow Korean imports of U.S. boneless beef from cattle less than 30 months old.

USTR, “Johanns and Portman Welcome Progress to Reopen Korean Market to U.S. Beef,” USTR press release,

Jan. 13, 2006. Reopening of the market was originally anticipated for late March. Two incidents since the signing

of the protocol have delayed implementation at least until July 2006. 215 There was earlier interest in a potential U.S.-Korea FTA in some quarters in the United States. The

Senate Finance Committee asked the Commission to produce a report estimating the economic impact of a U.S.-

Korea FTA in December 2000. See USITC, U.S.-Korea FTA: The Economic Impact of Establishing a Free Trade

Agreement (FTA) Between the United States and the Republic of Korea, publication 3452, Sept. 2001. 216 Mark E. Manyin, “South Korea-U.S. Economic Relations: Cooperation, Friction, and Prospects for

a Free Trade Agreement (FTA),” CRS Report for Congress, Order Code RL30566, Feb. 9, 2006; U.S.

Department of State telegram, “Press Bulletin—June, 27, 2005,” message reference No. 3071, prepared by U.S.

Embassy, Seoul, June 27, 2005; U.S. Department of State telegram, “U.S.-ROK Quarterly Trade Meeting,”

message reference No. 200757, prepared by U.S. Department of State, Washington, DC, Oct. 31, 2005. Korea

made concessions on beef and screen quotas in early 2006 and the United States and Korea announced their

intention to negotiate an FTA on Feb. 2, 2006. USTR, “Secretary Johanns and USTR Portman Welcome Progress

to Reopen Korean Market to U.S. Beef,” USTR press release, Jan. 13, 2006; USTR, “USTR Portman Welcomes

Korea’s Action to Reduce Movie Restrictions: Benefits U.S. Film Industry,” USTR press release, Jan. 26, 2006;

and USTR, “United States, South Korea Announce Intention to Negotiate Free Trade Agreement,” USTR press

release, Feb. 2, 2006.

5-31

Beef

During 2005, the United States continued to press the Korean Government to reopen its

market to U.S. beef imports.212 Efforts to lift the ban were further delayed as a result of the

June 2005 announcement that another BSE-infected cow had been confirmed in the United

States.213 The United States supplied epidemiological data related to that cow to the Korean

Animal Health Committee, which recommended in December 2005 that imports of U.S. beef

could be resumed. Talks between the United States and Korea on the specific conditions for

resuming imports began shortly thereafter, but the ban was still in place at year-end.214

U.S.-Korea FTA Negotiations

In 2004, Korea proposed that the United States and Korea initiate FTA negotiations,215 and

in early 2005, Korea and the United States began a six-month process to explore the

logistics, benefits, and risks of an FTA. The United States sought to resolve several

outstanding issues before the start of formal FTA negotiations, most notably those involving

the Korean ban on imports of U.S. beef noted above and Korean movie screen quotas. Since

the 1960s, Korea has required local movie theaters to show Korean movies at least 146 days

a year in order to bolster the Korean film industry. For a number of years, the United States

has encouraged Korea to reduce the screen quota, and Korean refusal to do so reportedly was

the major reason that bilateral investment treaty negotiations were suspended in 1999.216
217 USTR, “US-India Policy Forum,” factsheet, July 18, 2005. 218 USTR, “USTR to Participate in Inaugural U.S.-India Trade Policy Forum,” press release, Nov. 11,

2005. 219 USTR, 2006 Trade Policy Agenda and 2005 Annual Report, p. 170. 220 U.S. Department of State, “USTR Portman’s Meeting With India’s Commerce Minister Kamal Nath:

Part I, Bilateral Issues,” message reference No. 1607, prepared by U.S. Embassy, New Delhi, March 8, 2006. 221 Ibid. 222 USTR, “India,” 2006 National Trade Estimate Report on Foreign Trade Barriers, p. 305. 223 Ibid.

5-32

India

U.S. merchandise exports to India totaled approximately $7.0 billion in 2005, a 32 percent

increase from $5.3 billion in 2004. U.S. merchandise imports from India grew by

approximately 21 percent from $15.5 billion in 2004 to $18.7 billion in 2005. The U.S.

merchandise trade deficit with India totaled $11.7 billion in 2005, up from $10.2 billion in

2004. India is currently the 22nd largest export market for U.S. goods and the United States

continued to be India’s leading trading partner in 2005. Leading U.S. exports to India during

the year included aircraft, fertilizers, automatic data processing machines, ferrous waste and

scrap, telecommunications equipment, and coal briquettes. Leading U.S. imports from India

during 2005 included diamonds, jewelry, textiles and apparel, and petroleum. U.S.-India

merchandise trade data are shown in appendix tables A-43 through A-45.

Trade Dialogue

The U.S.-India trade relationship during 2005 focused on developing a mutually beneficial

long-term trade relationship through the establishment of the United States-India Trade

Policy Forum (TPF).217 The TPF, launched in July 2005, was founded as a new mechanism

to discuss bilateral trade and related issues.218 The inaugural session of the TPF was held in

New Delhi on November 12, 2005, and the agenda included discussions on tariff and

nontariff trade barriers; services; investment; subsidies; customs procedures; IPR; sanitary

and phytosanitary (SPS) measures; India’s continued eligibility for benefits under the U.S.

GSP program; and government procurement.219 U.S. and Indian officials met in New Delhi

again on March 1, 2006, to further discuss multilateral and bilateral trade issues.220 They

agreed to continue to meet biannually, and to hold frequent bilateral meetings at the deputy

trade minister level.221

Intellectual Property Rights

On December 27, 2004, the Government of India issued a new patent ordinance just ahead

of India’s January 1, 2005 WTO TRIPS Agreement deadline to enact product patent

protection for pharmaceuticals and agricultural chemicals. The regulations implementing the

ordinance entered into force on January 1, 2005.222 According to USTR, India’s patent law

has other outstanding problems, including problems associated with ambiguities within the

scope of patentable inventions, a large backlog in pending patent applications, and

inadequate protection against unfair commercial use of test data.223 On January 30, 2006,

Indian officials expressed interest in commencing regular dialogue with the U.S. government

and academic officials to receive IPR training to build Indian IPR expertise and improve

mechanisms and methodologies for providing IPR technical assistance in India. The United
224 The White House, “Fact Sheet: United States and India: Strategic Partnership,” March 2, 2006. 225 The United States banned imports of Indian mangoes because India had not taken adequate steps

to ensure compliance with U.S. SPS standards regarding potential pests and diseases. Under the new agreement,

the two countries established a framework outlining fundamental requirements for bilateral trade of commodities

treated by irradiation as a quarantine treatment. The agreement is to allow Indian mangoes to be sold in the

United States during second half of 2007. USTR, “U.S. and India Issue Joint Statement on Trade,” press release,

Mar. 2, 2006, and USDA, “United States Agrees to Import Mangoes From India,” press release 0063.06, Mar.

2, 2006. 226 The United States and Russia ratified a bilateral trade agreement and the United States extended

NTR treatment to Russia under the Presidential waiver authority beginning in June 1992. Russia has received

NTR status under the full compliance provision since September 1994. William H. Cooper, CRS, Permanent

Normal Trade Relations (PNTR) Status for Russia and U.S.-Russian Economic Ties” CRS Report for Congress,

Jan. 28, 2002, RS21123. 227 Public Law 93-618, as amended (19 U.S.C. 2431 et seq.). Sec. 401 of the Trade Act of 1974 requires

the President to deny NTR tariff treatment to any country that was not eligible for such treatment as of Jan. 3,

1975. Sec. 402 of the amendment, the so-called Jackson-Vanik amendment (the amendment is named for its

major Congressional co-sponsors) requires the President to continue to deny NTR to

those countries as well as prohibit their access to U.S. government credit facilities, such as the Export-Import

Bank, as long as the country denies its citizens the right of freedom-of-emigration. For further information, see

Vladimir N. Pregelj, CRS, Country Applicability of the U.S. Normal Trade Relations (Most-Favored-Nation)

Status, CRS Report for Congress, March 24, 2005, 96-463E; and William H. Cooper, CRS, Permanent Normal

Trade Relations (PNTR) Status for Russia and U.S.-Russian Economic Ties, CRS Report for Congress, Jan. 28,

2002, RS21123.

5-33

States agreed to fund IPR training programs for India in 2006 to strengthen enforcement and

patent examination.224

Agriculture

The United States and India addressed a number of SPS issues under the TPF, including the

signature of a bilateral agreement that, upon completion of various steps, is to eventually

permit India to export mangoes to the United States, thus ending a 17-year U.S. ban on

imports of Indian mangoes.225

Russia

U.S. merchandise exports to Russia totaled $3.7 billion in 2005, a 32.8 percent increase from

$2.8 billion in 2004. U.S. merchandise imports from Russia totaled $15.4 billion in 2005,

a 31.9 percent increase from $11.6 billion in 2004. The U.S. merchandise trade deficit with

Russia totaled $11.8 billion in 2005, up from $8.8 billion in 2004. Leading U.S. exports to

Russia during the year were frozen chicken parts, drilling equipment, and passenger motor

vehicles. Leading U.S. imports from Russia were petroleum products and metals, including

aluminum and uranium. U.S.-Russia merchandise trade data are shown in appendix tables

A-46 through A-48.

The United States accords Russia conditional normal trade relations (NTR) tariff treatment226

pursuant to the provisions of Title IV of the Trade Act of 1974, as amended, which includes

the “freedom-of-emigration” requirements of the Jackson-Vanik amendment.227 President

Bush stated in 2001 that his administration would work with the Congress to grant Russia
228 William H. Cooper, CRS, Permanent Normal Trade Relations (PNTR) Status for Russia and U.S.-

Russian Economic Ties” CRS Report for Congress, Jan. 28, 2002, RS21123. 229 Such legislation was last introduced in 2003. A bill to authorize the extension of nondiscriminatory

treatment (normal trade relations treatment) to the products of Russia, S. 580, 108th Cong., 1st sess.,

Congressional Record (March 10, 2003): S3410; and A bill to authorize the extension of nondiscriminatory

treatment (normal trade relations treatment) to the products of Russia, H.R. 1224, 108th Cong., 1st sess.,

Congressional Record ( March 12, 2003 (Extensions)), E446. 230 Russia tabled its initial goods and services market access offers in February 1998 and October 1999,

respectively (those offers were subsequently revised). For information on the status of Russia’s WTO accession,

see WTO, “Accessions: Russian Federation, http://www.wto.org/english/thewto_e/acc_e/a1_russie_e.htm. 231 U.S. Department of State telegram, “Russian WTO Accession: Readout of Trilateral/Bilateral

Meetings, March 30-April 8, 2005,” message reference No. 69320, prepared by U.S. Department of State, April

14, 2005, and U.S. Department of State telegram, “Russia—2005 National Trade Estimate,” message reference

No. 15190, prepared by U.S. Embassy, Moscow, Dec. 13, 2005. 232 USTR, “U.S.-Russia Reach Agreement on Poultry, Pork and Beef Market Access,” press release,

Sept. 28, 2003. 233 In November 2003, Russia announced quota allocations for U.S. poultry, beef, and poultry for 2004,

based on historical U.S. export levels, as provided for in the September 2003 agreement. USTR, “Russia,” 2004

National Trade Estimate Report on Foreign Trade Barriers, pp. 406–407 and “United States and Russia Sign

Agreement on Meat Market,” press release, June 15, 2005. 234 The decision to implement import quotas for poultry and TRQs for beef and pork was announced

on Jan. 23, 2003. The quotas for poultry became effective in April 2003, and TRQs for beef and pork became

effective in May 2003. The poultry quota applies to HTS 0207 (fresh, chilled, or frozen poultry); the TRQ for

beef applies to HTS 0202 (frozen beef); and the TRQ for pork applies to HTS 0203 (fresh, chilled, or frozen

pork). The poultry quota is to be in effect for a period of 3 years, and the beef and pork TRQs are to be in effect

until 2010. Quotas and TRQs did not apply to Russia’s imports from countries that were a part of the former

Soviet Union. USDA, Economic Research Service, “Implications of Russia’s New Poultry Import Quotas,”

Livestock, Dairy, & Poultry Outlook, April 16, 2003; and USDA, FAS, “Russia Adopts Measures to Restrict

Meat Imports Starting in 2003,” FAS Online.

5-34

permanent NTR status.228 Congress considered legislation to grant Russia permanent NTR

in recent years,229 but such legislation was not introduced in 2005.

Russia continued its bilateral negotiations with the United States and other trading partners

during 2005 as part of Russia’s efforts to complete its WTO accession package.230 Key areas

of interest for U.S. negotiators with respect to Russia’s tariff and market access commitments

included: market access for agricultural products, aircraft, and financial services, as well as

Russia’s application of unscientifically based sanitary and phytosanitary standards and

agricultural price supports.231 Other longstanding U.S. concerns with Russia’s trade regime,

discussed in more detail below, include market access for U.S. poultry, pork, and beef, and

IPR protection in Russia.

Poultry, Pork, and Beef Import Restrictions

On June 15, 2005, the United States and Russia signed an agreement that effectively

preserves or expands U.S. market shares for U.S. poultry, beef, and pork exports to Russia.232

The agreement reflected the terms of an agreement that the two governments had reached in

principle on U.S. market access parameters on poultry, beef, and pork in September 2003.

The market access parameters of the agreement have been effectively applied by Russia

since 2004.233 The negotiations leading to the agreement followed Russian implementation

of a system of quotas for all imports of poultry and TRQs for all imports of pork and beef

in 2003.234 The agreement also included rules with respect to the allocation and distribution
235 According to USTR the agreement was supported by several major U.S. industry trade associations,

including the National Chicken Council, National Turkey Federation, USA Poultry and Egg Export Council,

National Cattlemen’s Beef Association, National Pork Producers Council, American Meat Institute, and U.S.

Meat Export Federation. USTR, “United States and Russia Sign Agreement on Meat Market,” press release, June

15, 2005. 236 Developments with respect to special 301 are discussed in chapter 2 of this report. 237 USTR, “Priority Watch List—Russia,” 2005 Special 301 Report, April 2005, p. 32. 238 Ibid. 239 70 FR 54435. Russia has been the subject of annual reviews for continued eligibility for U.S. GSP

benefits since 2001 because of its IPR practices based on petitions filed by the International Intellectual Property

Alliance and accepted by USTR. The U.S. GSP program is discussed in chapter 2 of this report.

5-35

of import licenses and veterinary permits, and established a consultative mechanism to

address trade-related matters, including sanitary issues.235

U.S. exports of poultry (HS 0207) to Russia were valued at $652 million in 2005, making

Russia the world’s largest market for U.S. poultry—significantly larger than U.S. exports

to the EU-25 market ($79 million in 2005) and to NAFTA partners ($114 million in 2005).

Russia ranked as the 5th largest market for U.S. pork (HTS 0203), with U.S. exports valued

at $53 million in 2005, and the 32nd largest market for U.S. beef (HTS 0202), with U.S.

exports valued at $473,000 in 2005.

Intellectual Property Rights

Russia has been on the special 301 priority watch list since 1997 based on longstanding U.S.

concerns about deteriorating IPR conditions in Russia.236 In its 2005 special 301 report,

USTR noted that Russia remained on the priority watch list due to serious and continuing

concerns with Russia’s IPR regime, including weak IPR enforcement, rampant production

of pirated optical media products, absence of TRIPs-consistent data protection, and

increasing Internet piracy of copyrighted works. USTR acknowledged that Russia had taken

steps to strengthen its IPR regime in recent years, but reported that further legislative

changes and enforcement improvements remain necessary to combat piracy that costs U.S.

industry estimated losses of $1.7 billion in 2004.237 USTR reported that it would continue

to monitor Russia’s progress in bringing its IPR regime in line with international standards,

and that it would conduct an out-of-cycle review to monitor Russia’s progress on IPR issues

and to evaluate whether actions taken by Russia have resulted in substantial reductions in

the levels of piracy and counterfeiting.238

In addition to the special 301 priority watch list and in response to petitions from the U.S.

copyright industry, USTR continued a review in 2005 to determine Russia’s eligibility to

continue to receive benefits under the U.S. GSP program.239 IPR also was a key issue of

discussion in Russia’s WTO accession negotiations with the United States during 2005.

APPENDIX TABLES

Table A–1 U.S. merchandise trade with world, by SITC codes (revision 3), 2003–05

(1,000 dollars)

SITCCode No. Description 2003 2004 0 Food and live animals 41,588,059 43,566,552 46,1 Beverages and tobacco 4,634,564 4,657,019 4,2 Crude materials, inedible, except fuels 32,392,743 35,646,475 39,3 Mineral fuels, lubricants and related materials 13,691,208 18,513,944 26,4 Animal and vegetable oils, fats and waxes 1,976,584 1,953,508 1,

5 Chemicals and related products, n.e.s. 91,417,551 109,324,174 119,6 Manufactured goods classified chiefly by material 58,756,976 67,497,529 77,

7 Machinery and transport equipment 305,681,044 334,476,712 367,

8 Miscellaneous manufactured articles 74,497,677 82,830,678 88,9 Commodities and transactions not classified elsewhere in the SITC 26,787,567 28,716,747 32,

Total all exports commodities 651,423,973 727,183,338 803,

0 Food and live animals 42,804,404 46,870,676 51,1 Beverages and tobacco 11,672,200 12,335,842 13,2 Crude materials, inedible, except fuels 21,054,527 27,694,787 30,3 Mineral fuels, lubricants and related materials 145,028,811 193,990,088 271,

4 Animal and vegetable oils, fats and waxes 1,567,714 2,279,432 2,

5 Chemicals and related products, n.e.s. 103,791,765 117,212,878 134,6 Manufactured goods classified chiefly by material 132,838,076 170,239,394 190,

7 Machinery and transport equipment 522,085,355 593,960,602 649,

8 Miscellaneous manufactured articles 217,924,433 240,365,616 258,9 Commodities and transactions not classified elsewhere in the SITC 51,329,502 55,211,147 60,

Total all imports commodities 1,250,096,785 1,460,160,460 1,662,

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s." stands for "not elsewhere specified."

A-3
Table A–2 Leading exports to the world, by Schedule B subheading, 2003–05

(1,000 dollars)

Schedule Bsubheading Description 2003 2004 

8802.40 Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg 21,135,208 20,497,678 2

8542.21 Electronic monolithic digital integrated circuits 24,991,056 22,556,313 2

9880.00 Low value export shipments (non-Canadian) 15,710,789 18,161,505 2

8803.30 Parts of airplanes or helicopters, n.e.s.o.i. 11,828,184 12,858,453 18703.23 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 1,500 but not over 3,000 cc 9,606,466 10,550,638 1

8473.30 Parts and accessories for automated data processing machines and units 12,215,155 11,309,784 18708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 8,987,449 10,211,030 13004.90 Certain medicaments put up in measure doses or in forms or packings for retail 

 sale, n.e.s.o.i. 7,331,812 9,158,147 

8703.24 Passenger motor vehicles with spark-ignition internal-combustion reciprocating 

 piston engine, cylinder capacity over 3,000 cc 9,459,077 8,440,792 

2710.19 Oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products, not light 4,435,159 6,244,558 

8708.29 Parts and accessories of bodies (including cabs) for motor vehicles, n.e.s.o.i. 8,049,472 8,174,852 

8411.91 Parts for turbojets or turbopropellers 5,996,225 7,184,526 

1201.00 Soybeans, whether or not broken 7,935,151 6,684,380 

8542.29 Electronic monolithic integrated circuits, other than digital 5,094,305 6,349,947 

8431.43 Parts for boring or sinking machinery, n.e.s.o.i. 4,086,626 4,568,019 2710.11 Light oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products 2,612,473 3,453,208 

9018.90 Medical, surgical, dental or veterinary sciences instruments, appliances, and

 parts, n.e.s.o.i. 4,004,688 4,547,656 

1005.90 Corn (maize), other than seed 4,804,505 5,817,595 8704.31 Motor vehicles for transporting goods, with spark-ignition internal-combustion

 piston engine, gross vehicle weight not exceeding 5 mt 4,063,647 4,524,999 

7108.12 Nonmonetary gold (including gold plated with platinum), unwrought, excluding

 powder 4,129,930 3,464,941 

8479.89 Machines and mechanical appliances having individual functions, n.e.s.o.i. 3,606,520 5,163,748 

8411.12 Turbojets of a thrust exceeding 25 kN 3,372,365 3,924,757 

8802.30 Airplanes and aircraft, of an unladen weight over 2,000 kg but not over 15,000 kg 1,522,401 3,549,572 

1001.90 Wheat and meslin, excluding durum wheat 3,737,657 5,007,737 3002.10 Antisera and other blood fractions, and modified immunological products 2,622,672 3,360,657 

 Total of items shown 191,338,991 205,765,495 22

All other 460,084,983 521,417,843 57

 Total of all commodities 651,423,973 727,183,338 80

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inclu

A-4
Table A–3 Leading U.S. imports from the world, by HTS subheading, 2003–05

(1,000 dollars)

HTSsubheading Description 2003 2004 

2709.00 Petroleum oils and oils obtained from bituminous minerals, crude 73,526,856 100,337,587 13

8703.24 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 3,000 cc 64,265,683 72,732,506 7

8703.23 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 1,500 but not over 3,000 cc 48,155,104 46,085,812 4

2710.19 Oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products, not light 18,917,131 25,652,668 3

9801.00 U.S. articles exported and returned, not advanced or improved in condition;

 animals exported or returned 31,665,256 32,205,473 3

8473.30 Parts and accessories for automated data processing machines and units 22,643,984 26,834,882 2

2710.11 Light oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products 12,161,253 17,312,561 2

2711.21 Natural gas, gaseous state 18,401,150 19,674,288 28525.20 Transmission apparatus incorporating reception apparatus 15,518,410 20,959,691 2

3004.90 Certain medicaments put up in measure doses or in forms or packings for retail

 sale, n.e.s.o.i. 19,575,914 22,158,753 2

8471.30 Portable digital automated data processing machines not exceeding 10 kg, with at

 least a CPU, keyboard and display 13,185,104 16,034,861 1

9999.95 Estimated "low valued" shipments 14,067,192 16,193,577 18471.60 Input or output units for automated data processing machines 15,877,835 18,720,207 1

8528.12 Incomplete or unfinished color reception apparatus for televisions 9,170,564 12,321,956 17102.39 Nonindustrial diamonds, n.e.s.o.i. 12,161,383 13,871,661 1

8542.21 Electronic monolithic digital integrated circuits 15,656,040 16,058,744 18708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 11,516,474 13,401,701 1

8704.31 Motor vehicles for transporting goods, with spark-ignition internal-combustion

 piston engine, gross vehicle weight not exceeding 5 mt 11,615,411 10,321,430 1

8471.70 Automatic data processing storage units 11,208,265 10,738,387 1

8517.90 Parts of telephonic or telegraphic apparatus 4,722,782 5,512,769 8708.29 Parts and accessories of bodies (including cabs) for motor vehicles, n.e.s.o.i. 7,144,556 7,513,225 

4407.10 Coniferous wood sawn or chipped lengthwise, sliced or peeled, of thickness

 exceeding 6 mm 5,499,581 8,164,288 

6110.20 Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or

 crocheted, of cotton 6,746,184 7,084,341 

6403.99 Footwear not covering the ankles, with outer soles of rubber or plastics or

 composition leather and uppers of leather 7,034,221 7,226,536 

8517.50 Other apparatus for carrier-current line systems or for digital line systems 4,109,573 5,435,488 

 Total of items shown 474,545,907 552,553,391 65

All other 775,550,878 907,607,069 1,01

 Total of all commodities 1,250,096,785 1,460,160,460 1,66

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inclu

A-5
Table A–4 Antidumping cases active in 2005, by USITC investigation number

(Affirmative = A; Negative = N)

USITCinvestigationnumber Product

Countryof origin

Date ofinstitution

USITCprelim

ITAa

prelim

ITAfinal

731-TA-1063 Warmwater shrimp and prawns Brazil 12/31/03 A A A 731-TA-1064 Warmwater shrimp and prawns China 12/31/03 A A A 731-TA-1065 Warmwater shrimp and prawns Ecuador 12/31/03 A A A 731-TA-1066 Warmwater shrimp and prawns India 12/31/03 A A A 731-TA-1067 Warmwater shrimp and prawns Thailand 12/31/03 A A A 731-TA-1068 Warmwater shrimp and prawns Vietnam 12/31/03 A A A 731-TA-1069 Outboard engines Japan 01/08/04 A A A 731-TA-1070A Certain crepe paper products China 02/17/04 A A A 731-TA-1070B Certain tissue paper products China 02/17/04 A A A 731-TA-1071 Magnesium China 02/27/04 A A A 731-TA-1072 Magnesium Russia 02/27/04 A A A 731-TA-1074 Certain circular welded carbon quality line pipe Korea 03/03/04 A N ©) 731-TA-1075 Certain circular welded carbon quality line pipe Mexico 03/03/04 A A ©) 731-TA-1076 Live swine Canada 03/05/04 A A A 731-TA-1077 Polyethylene terephthalate resin India 03/24/04 A A A 731-TA-1078 Polyethylene terephthalate resin Indonesia 03/24/04 A A A 731-TA-1079 Polyethylene terephthalate resin Taiwan 03/24/04 A N N 731-TA-1080 Polyethylene terephthalate resin Thailand 03/24/04 A A A 731-TA-1082 Chlorinated isocyanurates China 05/14/04 A A A 731-TA-1083 Chlorinated isocyanurates Spain 05/14/04 A A A 731-TA-1084 Purified carboxymethylcellulose Finland 06/09/04 A A A 731-TA-1085 Purified carboxymethylcellulose Mexico 06/09/04 A A A 731-TA-1086 Purified carboxymethylcellulose Netherlands 06/09/04 A A A 731-TA-1087 Purified carboxymethylcellulose Sweden 06/09/04 A A A 731-TA-1089 Certain orange juice Brazil 12/27/04 A A (e) 

731-TA-1090 Superalloy degassed chromium Japan 03/04/05 A A A 731-TA-1091 Artists’ canvas China 04/01/05 A A (e) 731-TA-1092 Diamond sawblades China 05/03/05 A A (e) 731-TA-1093 Diamond sawblades Korea 05/03/05 A A (e) 731-TA-1094 Metal calendar slides Japan 06/29/05 A (e) (e) 731-TA-1095 Lined paper school supplies China 09/09/05 A (e) (e) 731-TA-1096 Lined paper school supplies India 09/09/05 A (e) (e) 731-TA-1097 Lined paper school supplies Indonesia 09/09/05 A (e) (e) 731-TA-1098 Liquid sulfur dioxide Canada 09/30/05 N (d) (d) 

731-TA-1099 Carbon and certain alloy steel wire rod China 11/10/05 N (d) (d) 731-TA-1100 Carbon and certain alloy steel wire rod Germany 11/10/05 N (d) (d) 731-TA-1101 Carbon and certain alloy steel wire rod Turkey 11/10/05 N (d) (d) Source: U.S. International Trade Commission.

a International Trade Administration, U.S. Department of Commerce.b For cases in which the final action was taken by the ITA, the date shown is the Federal Register notice date of that action. For cases in which the final 

the date of the USITC notification of Commerce is shown.

c The investigation was terminated or discontinued following withdrawal of the petition.d Not applicable.e Pending as of Dec. 31, 2005.

A-6
A-7

Table A–5 Antidumping duty orders in effect as of December 31, 2005

Effective date of

Country and commodity original action

Argentina:

Honey Dec. 10, 2001

Hot-rolled carbon steel flat products Sept. 19, 2001

Oil country tubular goods Aug. 11, 1995 

Seamless pipe Aug. 3, 1995

Light-walled rectangular tube May 26, 1989

Barbed wire and barbless wire strand Nov. 13, 1985

Australia:

Corrosion-resistant carbon steel flat products Aug. 19, 1993

Belarus:

Steel concrete reinforcing bars Sept. 7, 2001

Belgium:

Stainless steel plate in coils May 21, 1999

Carbon steel plate Aug. 19, 1993

Brazil:

Frozen or canned warmwater shrimp and prawns Feb. 1, 2005

Prestressed concrete steel wire strand Jan. 28, 2004

Carbon and certain alloy steel wire rod Oct. 29, 2002

Hot-rolled carbon steel flat products July 6, 1999

Seamless pipe Aug. 3, 1995

Stainless steel bar Feb. 21, 1995

Silicomanganese Dec. 22, 1994

Stainless steel wire rod Jan. 28, 1994

Carbon steel plate Aug. 19, 1993

Circular welded non-alloy steel pipe Nov. 2, 1992

Silicon metal July 31, 1991

Brass sheet and strip Jan. 12, 1987

Carbon steel butt-weld pipe fittings Dec. 17, 1986

Iron construction castings May 9, 1986

Canada:

Hard red spring wheat Oct. 23, 2003

Carbon and certain alloy steel wire rod Oct. 29, 2002

Softwood lumber May 22, 2002

Corrosion-resistant carbon steel flat products Aug. 19, 1993

Brass sheet and strip Jan. 12, 1987

Iron construction castings Mar. 5, 1986

Chile:

Individually quick frozen red raspberries July 9, 2002

Preserved mushrooms Dec. 2, 1998

China:

Chlorinated isocyanurates June 24, 2005

Magnesium April 15, 2005

Tissue paper Mar. 30, 2005

Frozen or canned warmwater shrimp and prawns Feb. 1, 2005

Crepe paper Jan. 25, 2005

Wooden bedroom furniture Jan. 4, 2005

Carbazole violet pigment 23 Dec. 29, 2004

Hand trucks Dec. 2, 2004

Polyethylene retail carrier bags Aug. 9, 2004

Ironing tables Aug. 6, 2004

Tetrahydrofurfuryl alcohol Aug. 6, 2004

Color television receivers June 3, 2004

Malleable iron pipe fittings Dec. 12, 2003

Refined brown aluminum oxide Nov. 19, 2003

Barium carbonate Oct. 1, 2003

Polyvinyl alcohol Oct. 1, 2003

Saccharin July 9, 2003
A-8

Table A–5 Antidumping duty orders in effect as of December 31, 2005—Continued

Effective date of

Country and commodity original action

China–Continued

Lawn and garden steel fence posts June 12, 2003

Non-malleable cast iron pipe fittings Apr. 7, 2003

Ferrovanadium Jan. 28, 2003

Folding metal tables and chairs June 27, 2002

Automotive replacement glass windshields Apr. 4, 2002

Folding gift boxes Jan. 8, 2002

Honey Dec. 10, 2001

Hot-rolled carbon steel flat products Nov. 29, 2001

Pure magnesium (granular) Nov. 19, 2001

Foundry coke Sept. 17, 2001

Steel concrete reinforcing bars Sept. 7, 2001

Synthetic indigo June 19, 2000

Non-frozen apple juice concentrate June 5, 2000

Preserved mushrooms Feb. 19, 1999

Carbon steel plate Oct. 24, 1997

Crawfish tail meat Sept. 15, 1997

Persulfates July 7, 1997

Brake rotors Apr. 17, 1997

Furfuryl alcohol June 21, 1995

Pure magnesium (ingot) May 12, 1995

Glycine Mar. 29, 1995

Cased pencils Dec. 28, 1994

Silicomanganese Dec. 22, 1994

Paper clips Nov. 25, 1994

Fresh garlic Nov. 16, 1994

Helical spring lock washers Oct. 19, 1993

Sulfanilic acid Aug. 19, 1992

Carbon steel butt-weld pipe fittings July 6, 1992

Sparklers June 18, 1991

Silicon metal June 10, 1991

Axes and adzes Feb. 19, 1991

Bars and wedges Feb. 19, 1991

Hammers and sledges Feb. 19, 1991

Picks and mattocks Feb. 19, 1991

Tapered roller bearings June 15, 1987

Porcelain-on-steel cooking ware Dec. 2, 1986

Petroleum wax candles Aug. 28, 1986

Iron construction castings May 9, 1986

Natural bristle paint brushes Feb. 14, 1986

Barium chloride Oct. 17, 1984

Chloropicrin Mar. 22, 1984

Potassium permanganate Jan. 31, 1984

Greige polyester cotton printcloth Sept. 16, 1983

Czech Republic:

Small diameter seamless pipe Aug. 14, 2000

Ecuador:

Frozen or canned warmwater shrimp and prawns Feb. 1, 2005

Finland:

Carboxymethylcellulose July 11, 2005

Carbon steel plate Aug. 19, 1993

France:

Stainless steel bar Mar. 7, 2002

Low enriched uranium Feb. 13, 2002

Stainless steel wire rod Jan. 28, 1994

Corrosion-resistant carbon steel flat products Aug. 19, 1993
A-9

Table A–5 Antidumping duty orders in effect as of December 31, 2005—Continued

Effective date of 

Country and commodity original action

France—Continued:

Ball bearings May 15, 1989

Spherical plain bearings May 15, 1989

Brass sheet and strip Mar. 6, 1987

Sorbitol Apr. 9, 1982

Germany:

Stainless steel bar Mar. 7, 2002

Stainless steel sheet and strip July 27, 1999

Seamless pipe Aug. 3, 1995

Carbon steel plate Aug. 19, 1993

Corrosion-resistant carbon steel flat products Aug. 19, 1993

Ball bearings May 15, 1989

Brass sheet and strip Mar. 6, 1987

Hungary:

Sulfanilic acid Nov. 8, 2002

India:

Frozen or canned warmwater shrimp and prawns Feb. 1, 2005

Carbazole violet pigment 23 Dec. 29, 2004

Prestressed concrete steel wire strand Jan. 28, 2004

Polyethylene terephthalate (PET) film July 1, 2002

Silicomanganese May 23, 2002

Hot-rolled carbon steel products Dec. 3, 2001

Carbon steel plate Feb. 10, 2000

Preserved mushrooms Feb. 19, 1999

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 pipe May 12, 1986

Indonesia:

Carbon and certain alloy steel wire rod Oct. 29, 2002

Hot-rolled carbon steel flat products Dec. 3, 2001

Steel concrete reinforcing bars Sept. 7, 2001

Carbon steel plate Feb. 10, 2000

Preserved mushrooms Feb. 19, 1999

Iran:

Raw in-shell pistachios July 17, 1986

Italy:

Stainless steel bar Mar. 7, 2002

Stainless steel butt-weld pipe fittings Feb. 23, 2001

Carbon steel plate Feb. 10, 2000

Stainless steel sheet and strip July 27, 1999

Stainless steel plate in coils May 21, 1999

Stainless steel wire rod Sept. 15, 1998

Pasta July 24, 1996

Oil country tubular goods Aug. 11, 1995

Grain-oriented silicon electrical steel Aug. 12, 1994

Ball bearings May 15, 1989

Granular polytetrafluoroethylene resin Aug. 30, 1988

Brass sheet and strip Mar. 6, 1987

Pressure sensitive plastic tape Oct. 21, 1977

Japan:

Superalloy degassed chromium Dec. 22, 2005

Ceramic station post insulators Dec. 30, 2003

Polyvinyl alcohol July 2, 2003

Welded large diameter line pipe Dec. 6, 2001
A-10

Table A–5 Antidumping duty orders in effect as of December 31, 2005—Continued

Effective date of

Country and commodity original action

Japan—Continued:

Stainless steel angle May 18, 2001

Tin mill products Aug. 28, 2000

Large diameter seamless pipe June 26, 2000

Small diameter seamless pipe June 26, 2000

Structural steel beams June 19, 2000

Carbon steel plate Feb. 10, 2000

Stainless steel sheet and strip July 27, 1999

Hot-rolled carbon steel flat products June 29, 1999

Stainless steel wire rod Sept. 15, 1998

Clad steel plate July 2, 1996

Oil country tubular goods Aug. 11, 1995

Stainless steel bar Feb. 21, 1995

Grain-oriented silicon electrical steel June 10, 1994

Corrosion-resistant carbon steel flat products Aug. 19, 1993

Gray portland cement and clinker May 10, 1991

Ball bearings May 15, 1989

Granular polytetrafluoroethylene resin Aug. 24, 1988

Brass sheet and strip Aug. 12, 1988 

Internal combustion industrial forklift trucks June 7, 1988 

Stainless steel butt-weld pipe fittings Mar. 25, 1988

Carbon steel butt-weld pipe fittings Feb. 10, 1987 

Prestressed concrete steel wire strand Dec. 8, 1978 

Polychloroprene rubber Dec. 6, 1973

Kazakhstan:

Silicomanganese May 23, 2002

Hot-rolled carbon steel flat products Nov. 21, 2001

Korea:

Prestressed concrete steel wire strand Jan. 28, 2004

Polyvinyl alcohol Oct. 1, 2003

Stainless steel bar Mar. 7, 2002

Steel concrete reinforcing bars Sept. 7, 2001

Stainless steel angle May 18, 2001

Structural steel beams Aug. 18, 2000

Polyester staple fiber May 25, 2000

Carbon steel plate Feb. 10, 2000

Stainless steel sheet and strip July 27, 1999

Stainless steel plate in coils May 21, 1999

Stainless steel wire rod Sept. 15, 1998

Oil country tubular goods Aug. 11, 1995

Corrosion-resistant carbon steel flat products Aug. 19, 1993

Stainless steel butt-weld pipe fittings Feb. 23, 1993

Welded ASTM A-312 stainless steel pipe Dec. 30, 1992

Circular welded non-alloy steel pipe Nov. 2, 1992

Polyethylene terephthalate (PET) film June 5, 1991

Top-of-the-stove stainless steel cooking ware Jan. 20, 1987

Latvia:

Steel concrete reinforcing bars Sept. 7, 2001

Malaysia:

Polyethylene retail carrier bags Aug. 9, 2004

Stainless steel butt-weld pipe fittings Feb. 23, 2001

Extruded rubber thread Oct. 7, 1992

Steel concrete reinforcing bars Sept. 7, 2001
A-11

Table A–5 Antidumping duty orders in effect as of December 31, 2005—Continued

Effective date of

Country and commodity original action

Mexico:

Carboxymethylcellulose July 11, 2005

Prestressed concrete steel wire strand Jan. 28, 2004

Carbon and certain alloy steel wire rod Oct. 29, 2002

Welded large diameter line pipe Feb. 27, 2002

Large diameter seamless pipe Aug. 11, 2000

Stainless steel sheet and strip July 27, 1999

Fresh tomatoes (suspended) Nov. 1, 1996

Oil country tubular goods Aug. 11, 1995

Carbon steel plate Aug. 19, 1993

Circular welded non-alloy steel pipe Nov. 2, 1992

Gray portland cement and clinker Aug. 30, 1990

Moldova:

Carbon and certain alloy steel wire rod Oct. 29, 2002

Netherlands:

Carboxymethylcellulose July 11, 2005

Hot-rolled carbon steel flat products Nov. 29, 2001

Norway:

Fresh and chilled Atlantic salmon Apr. 12, 1991

Philippines:

Stainless steel butt-weld pipe fittings Feb. 23, 2001

Poland:

Steel concrete reinforcing bars Sept. 7, 2001

Carbon steel plate Aug. 19, 1993

Portugal:

Sulfanilic acid Nov. 8, 2002

Romania:

Hot-rolled carbon steel flat products Nov. 29, 2001

Small diameter seamless pipe Aug. 10, 2000

Carbon steel plate Aug. 19, 1993

Russia:

Magnesium April 15, 2005

Silicon metal Mar. 26, 2003

Ammonium nitrate (suspended) May 19, 2000

Hot-rolled carbon steel flat products (suspended) July 12, 1999

Carbon steel plate (suspended) Oct. 24, 1997

Ferrovanadium and nitrided vanadium July 10, 1995

Uranium (suspended) Oct. 16, 1992

Solid urea July 14, 1987

Singapore:

Ball bearings May 15, 1989

South Africa:

Ferrovanadium Jan. 28, 2003

Hot-rolled carbon steel flat products Sept. 19, 2001

Small diameter seamless pipe June 26, 2000

Stainless steel plate in coils May 21, 1999

Spain:

Chlorinated isocyanurates June 24, 2005

Stainless steel angle May 18, 2001

Stainless steel wire rod Sept. 15, 1998

Stainless steel bar Mar. 2, 1995

Carbon steel plate Aug. 19, 1993

Sweden:

Carboxymethylcellulose July 11, 2005

Stainless steel wire rod Sept. 15, 1998

Carbon steel plate Aug. 19, 1993
A-12

Table A–5 Antidumping duty orders in effect as of December 31, 2005—Continued

Effective date of

Country and commodity original action

Taiwan:

Polyethylene terephthalate (PET) film July 1, 2002

Hot-rolled carbon steel flat products Nov. 29, 2001

Polyester staple fiber May 25, 2000

Stainless steel sheet and strip July 27, 1999

Stainless steel plate in coils May 21, 1999

Stainless steel wire rod Sept. 15, 1998

Forged stainless steel flanges Feb. 9, 1994

Helical spring lockwashers June 28, 1993

Stainless steel butt-weld pipe fittings June 16, 1993

Welded ASTM A-312 stainless steel pipe Dec. 30, 1992

Circular welded non-alloy steel pipe Nov. 2, 1992

Light-walled rectangular tube Mar. 27, 1989

Carbon steel butt-weld pipe fittings Dec. 17, 1986

Porcelain-on-steel cooking ware Dec. 2, 1986

Small diameter carbon steel pipe May 7, 1984

Carbon steel plate June 13, 1979

Thailand:

Frozen or canned warmwater shrimp and prawns Feb. 1, 2005

Polyethylene retail carrier bags Aug. 9, 2004

Prestressed concrete steel wire strand Jan. 28, 2004

Hot-rolled carbon steel flat products Nov. 29, 2001

Furfuryl alcohol July 25, 1995

Canned pineapple July 18, 1995

Carbon steel butt-weld pipe fittings July 6, 1992

Welded carbon steel pipe Mar. 11, 1986

Trinidad and Tobago:

Carbon and certain alloy steel wire rod Oct. 29, 2002

Turkey:

Steel concrete reinforcing bars Apr. 17, 1997

Pasta July 24, 1996

Welded carbon steel pipe May 15, 1986

Ukraine:

Carbon and certain alloy steel wire rod Oct. 29, 2002

Hot-rolled carbon steel flat products Nov. 29, 2001

Ammonium nitrate Sept. 12, 2001

Steel concrete reinforcing bars Sept. 7, 2001

Carbon steel plate (suspended) Oct. 24, 1997

Silicomanganese Oct. 31, 1994

Solid urea July 14, 1987

United Kingdom:

Stainless steel bar Mar. 7, 2002

Carbon steel plate Aug. 19, 1993

Ball bearings May 15, 1989

Venezuela:

Silicomanganese May 23, 2002

Vietnam:

Frozen or canned warmwater shrimp and prawns Feb. 1, 2005

Frozen fish fillets Aug. 12, 2003

Source: U.S. International Trade Commission.
Table A–6 Countervailing duty cases active in 2005, by USITC investigation number

(Affirmative = A; Negative = N)

USITCinvestigationnumber Product

Countyof origin

Date ofinstitution

USITCprelim

ITAaprelim

ITAfinal

701-TA-438 Live swine Canada 03/05/04 A N N ©701-TA-439 Polyethylene terephthalate resin India 03/24/04 A A A 701-TA-440 Polyethylene terephthalate resin Thailand 03/24/04 A N N ©701-TA-442 Lined paper school supplies India 09/09/05 A (d) (d) 

701-TA-443 Lined paper school supplies Indonesia 09/09/05 A (d) (d) Source: U.S. International Trade Commission.

a International Trade Administration, U.S. Department of Commerce.b For cases in which the final action was taken by the ITA, the date shown is the Federal Register notice date of that action. For cases 

was taken by USITC, the date of the USITC notification of Commerce is shown.

c Not applicable.d Pending as of Dec. 31, 2005.

A-13
A-14

Table A–7 Countervailing duty orders in effect as of December 31, 2005

Effective date of

Country and commodity original action

Argentina:

Honey Dec. 10, 2001

Hot-rolled carbon steel flat products Sept. 11, 2001

Belgium:

Stainless steel plate in coils May 11, 1999

Carbon steel plate Aug. 17, 1993

Brazil:

Carbon and certain alloy steel wire rod Oct. 22, 2002

Hot-rolled carbon steel flat products July 6, 1999

Carbon steel plate Aug. 17, 1993

Brass sheet and strip Jan. 8, 1987

Heavy iron construction castings May 15, 1986

Canada:

Hard red spring wheat Oct. 23, 2003

Softwood lumber May 22, 2002

Alloy magnesium Aug. 31, 1992

Pure magnesium Aug. 31, 1992

France:

Low enriched uranium Feb. 13, 2002

Corrosion-resistant carbon steel flat products Aug. 17, 1993

Brass sheet and strip Mar. 6, 1987

Germany:

Low enriched uranium Feb. 13, 2002

Hungary:

Sulfanilic acid Nov. 8, 2002

India:

Carbazole violet pigment 23 Dec. 29, 2004

Prestressed concrete steel wire strand Feb. 4, 2004

Polyethylene terephthalate (PET) film July 1, 2002

Hot-rolled carbon steel flat products Dec. 3, 2001

Carbon steel plate Feb. 10, 2000

Sulfanilic acid Mar. 2, 1993

Indonesia:

Hot-rolled carbon steel flat products Dec. 3, 2001

Carbon steel plate Feb. 10, 2000

Iran:

Roasted in-shell pistachios Oct. 7, 1986

Raw in-shell pistachios Mar. 11, 1986

Italy:

Stainless steel bar Mar. 8, 2002

Carbon steel plate Feb. 10, 2000

Stainless steel sheet and strip Aug. 6, 1999

Stainless steel plate in coils May 11, 1999

Pasta July 24, 1996

Oil country tubular goods Aug. 10, 1995

Grain-oriented silicon electrical steel June 7, 1994
A-15

Table A–7 Countervailing duty orders in effect as of December 31, 2005—Continued

Effective date of

Country and commodity original action

Korea:

DRAMs and DRAM modules Aug. 11, 2003

Structural steel beams Aug. 14, 2000

Carbon steel plate Feb. 10, 2000

Stainless steel sheet and strip Aug. 6, 1999

Corrosion-resistant carbon steel flat products Aug. 17, 1993

Top-of-the-stove stainless steel cooking ware Jan. 20, 1987

Mexico:

Carbon steel plate Aug. 17, 1993

Netherlands:

Low enriched uranium Feb. 13, 2002

Norway:

Fresh and chilled Atlantic salmon Apr. 12, 1991 

South Africa:

Hot-rolled carbon steel flat products Dec. 3, 2001

Stainless steel plate in coils May 11, 1999

Spain:

Carbon steel plate Aug. 17, 1993

Sweden:

Carbon steel plate Aug. 17, 1993

Thailand:

Hot-rolled carbon steel flat products Dec. 3, 2001

Turkey:

Pasta July 24, 1996

Welded carbon steel pipe Mar. 7, 1986

United Kingdom:

Low enriched uranium Feb. 13, 2002

Carbon steel plate Aug. 17, 1993

Source: U.S. International Trade Commission.
A-16

Table A–8 Changed circumstances investigations completed in 2005

Investigation

number Product

Country of

origin

Completion

datea Action

751-TA-28 Frozen warmwater shrimp and prawns India 11/21/05 Continued

751-TA-29 Frozen warmwater shrimp and prawns Thailand 11/21/05 Continued

Source: U.S. International Trade Commission.

a The completion date shown is the date of the USITC notification of Commerce.
A-17

Table A–9 Reviews of existing antidumping and countervailing duty orders and suspension agreements completed in

2005, by date of completion

USITC

investigation

number Product

Country of

origin

Completion

datea Action

731-TA-326 Frozen concentrated orange juice Brazil 03/28/05 Revoked

701-TA-384 Hot-rolled carbon steel flat products Brazil 04/28/05 Continued

731-TA-806 Hot-rolled carbon steel flat products Brazil 04/28/05 Continued

731-TA-807 Hot-rolled carbon steel flat products Japan 04/28/05 Continued

731-TA-808 Hot-rolled carbon steel flat products Russia 04/28/05 Continued

731-TA-653 Sebacic acid China 05/11/05 Revoked

731-TA-101 Greige polyester cotton printcloth China 05/25/05 Continued

731-TA-125 Potassium permanganate China 05/26/05 Continued

701-TA-249 Heavy iron construction castings Brazil 06/07/05 Continued

731-TA-262 Iron construction castings Brazil 06/07/05 Continued

731-TA-263 Iron construction castings Canada 06/07/05 Continued

731-TA-265 Iron construction castings China 06/07/05 Continued

AA1921-129 Polychloroprene rubber Japan 06/27/05 Continued

701-TA-376 Stainless steel plate in coils Belgium 06/27/05 Continued

701-TA-377 Stainless steel plate in coils Italy 06/27/05 Continued

701-TA-379 Stainless steel plate in coils South Africa 06/27/05 Continued

731-TA-788 Stainless steel plate in coils Belgium 06/27/05 Continued

731-TA-789 Stainless steel plate in coils Canada 06/27/05 Revoked

731-TA-790 Stainless steel plate in coils Italy 06/27/05 Continued

731-TA-791 Stainless steel plate in coils Korea 06/27/05 Continued

731-TA-792 Stainless steel plate in coils South Africa 06/27/05 Continued

731-TA-793 Stainless steel plate in coils Taiwan 06/27/05 Continued

701-TA-381 Stainless steel sheet and strip Italy 07/12/05 Continued

701-TA-382 Stainless steel sheet and strip Korea 07/12/05 Continued

731-TA-797 Stainless steel sheet and strip France 07/12/05 Revoked

731-TA-798 Stainless steel sheet and strip Germany 07/12/05 Continued

731-TA-799 Stainless steel sheet and strip Italy 07/12/05 Continued

731-TA-800 Stainless steel sheet and strip Japan 07/12/05 Continued

731-TA-801 Stainless steel sheet and strip Korea 07/12/05 Continued

731-TA-802 Stainless steel sheet and strip Mexico 07/12/05 Continued

731-TA-803 Stainless steel sheet and strip Taiwan 07/12/05 Continued

731-TA-804 Stainless steel sheet and strip United Kingdom 07/12/05 Revoked

731-TA-282 Petroleum wax candles China 07/28/05 Continued

104-TAA-7 Sugar European Union 08/29/05 Revoked

AA1921-198 Sugar Belgium 08/29/05 Revoked

AA1921-199 Sugar France 08/29/05 Revoked

AA1921-200 Sugar Germany 08/29/05 Revoked

731-TA-841 Non-frozen apple juice concentrate China 09/28/05 Continued

731-TA-376 Stainless steel butt-weld pipe fittings Japan 09/29/05 Continued

731-TA-459 Polyethylene terephthalate (PET) film Korea 09/29/05 Continued

731-TA-563 Stainless steel butt-weld pipe fittings Korea 09/29/05 Continued

731-TA-564 Stainless steel butt-weld pipe fittings Taiwan 09/29/05 Continued

701-TA-267 Top-of-the-stove stainless steel cooking ware Korea 10/27/05 Continued

701-TA-268 Top-of-the-stove stainless steel cooking ware Taiwan 10/27/05 Revoked

731-TA-298 Porcelain-on-steel cooking ware China 10/27/05 Continued

731-TA-299 Porcelain-on-steel cooking ware Taiwan 10/27/05 Continued

731-TA-304 Top-of-the-stove stainless steel cooking ware Korea 10/27/05 Continued

731-TA-305 Top-of-the-stove stainless steel cooking ware Taiwan 10/27/05 Revoked

731-TA-308 Carbon steel butt-weld pipe fittings Brazil 10/31/05 Continued

731-TA-309 Carbon steel butt-weld pipe fittings Japan 10/31/05 Continued

731-TA-310 Carbon steel butt-weld pipe fittings Taiwan 10/31/05 Continued

731-TA-520 Carbon steel butt-weld pipe fittings China 10/31/05 Continued

731-TA-521 Carbon steel butt-weld pipe fittings Thailand 10/31/05 Continued

731-TA-718 Glycine China 10/31/05 Continued

731-TA-464 Sparklers China 11/15/05 Continued

701-TA-388 Cut-to-length carbon steel plate India 11/21/05 Continued

701-TA-389 Cut-to-length carbon steel plate Indonesia 11/21/05 Continued

701-TA-390 Cut-to-length carbon steel plate Italy 11/21/05 Continued
A-18

Table A–9 Reviews of existing antidumping and countervailing duty orders and suspension agreements completed in

2005, by date of completion—Continued

USITC

investigation

number Product

Country of

origin

Completion

datea Action

701-TA-391 Cut-to-length carbon steel plate Korea 11/21/05 Continued

731-TA-816 Cut-to-length carbon steel plate France 11/21/05 Revoked

731-TA-817 Cut-to-length carbon steel plate India 11/21/05 Continued

731-TA-818 Cut-to-length carbon steel plate Indonesia 11/21/05 Continued

731-TA-819 Cut-to-length carbon steel plate Italy 11/21/05 Continued

731-TA-820 Cut-to-length carbon steel plate Japan 11/21/05 Continued

731-TA-821 Cut-to-length carbon steel plate Korea 11/21/05 Continued

731-TA-669 Cased pencils China 11/30/05 Continued

731-TA-340-E Solid urea Russia 12/13/05 Continued

731-TA-340-H Solid urea Ukraine 12/13/05 Continued

731-TA-385 Granular polytetrafluoroethylene resin Italy 12/13/05 Continued

731-TA-386 Granular polytetrafluoroethylene resin Japan 12/13/05 Continued

731-TA-287 Raw in-shell pistachios Iran 12/15/05 Continued

731-TA-639 Forged stainless steel flanges India 12/16/05 Continued

731-TA-640 Forged stainless steel flanges Taiwan 12/16/05 Continued

Source: U.S. International Trade Commission.

a The completion date shown is the date of the USITC notification of Commerce.
A-19

Table A–10 Section 337 investigations and related proceedings completed by the U.S. International Trade

Commission during 2005 and those pending on December 31, 2005

Status of 

Investigation Article Countrya

Commission

determination

Completed:

337-TA-406 Certain Lens-Fitted Film Packages China, Hong Kong,

Korea

Two related (ancillary)

proceedings completed: (1)

Enforcement Proceeding II

(Comm’n issued civil penalties);

and (2) Commission Remand of

enforcement and advisory

proceedings; terminated without

altering existing remedy.

337-TA-454 Certain Set-Top Boxes and 

 Components Thereof

Japan, Mexico Remand from CAFC; Terminated

based on a settlement agreement.

337-TA-486 Certain Agriculture Tractors, Lawn

 Tractors, Riding Lawnmowers,

 and Components Thereof

China Enforcement proceeding;

terminated without implementing

any enforcement measures.

337-TA-494 Certain Automotive Measuring

 Devices, Products Containing

 Same, and Bezels for Such Devices

Taiwan Issued a limited exclusion order

and a cease and desist order;

issued a corrected consent order.

337-TA-499 Certain Audio Digital-to-Analog 

 Converters and Products

 Containing Same

United Kingdom Issued a limited exclusion order,

which was subsequently

rescinded based on a settlement

agreement.

337-TA-503 Certain Automated Mechanical

 Transmission Systems for

 Medium-Duty and Heavy-Duty

 Trucks, and Components Thereof

Germany Issued a limited exclusion order

and a cease and desist order.

337-TA-505 Certain Gun Barrels Used in Firearms

 Training Systems

Switzerland,

Netherlands

Issued a limited exclusion order

and a cease and desist order.

337-TA-506 Certain Optical Disk Controller Chips

 and Chipsets and Products

 Containing Same, Including

 DVD Players and PC Optical

 Storage Devices

Taiwan, Singapore,

China, Hong Kong,

Japan

Issued a limited exclusion order

and seven cease and desist

orders; motion for bond forfeiture

filed.

337-TA-510 Certain Systems for Detecting and

 Removing Viruses or Worms,

 Components Thereof, and

 Products Containing Same

Taiwan, Japan Issued a limited exclusion order

and a cease and desist order;

subsequently enforcement

proceeding and advisory opinion

proceeding were instituted.

337-TA-511 Certain Pet Food Treats China, Brazil Issued a limited exclusion order.

337-TA-514 Certain Plastic Food Containers China Issued a general exclusion order.

337-TA-515 Certain Injectable Implant

 Compositions

Sweden Terminated based on withdrawal

of the complaint.

337-TA-516 Certain Disc Drives, Components

 Thereof, and Products Containing

 Same

China Terminated based on a settlement

agreement.

See footnotes at end of table
A-20

Table A–10 Section 337 investigations and related proceedings completed by the U.S. International Trade

Commission during 2005 and those pending on December 31, 2005—Continued

Status of 

Investigation Article Countrya

Commission

determination

337-TA-517 Certain Shirts with Pucker-Free

 Seams and Methods of 

 Producing Same

Hong Kong Terminated based on withdrawal

of the complaint.

337-TA-521 Certain Voltage Regulator Circuits,

 Components Thereof and Products

 Containing Same

Malaysia, China Terminated based on a consent

order and a settlement

agreement.

337-TA-522 Certain Ink Markers and Packaging

 Thereof

China, India,

Indonesia, Korea

Issued general exclusion order

and a cease and desist order.

337-TA-524b Certain Point of Sale Terminals and

 Components Thereof

France, Israel,

Korea, Ireland

Terminated based on withdrawal

of the complaint.

337-TA-525 Certain Semiconductor Devices

 and Products Containing Same

China Terminated based on a settlement

agreement.

337-TA-526 Certain NAND Flash Memory Circuits

 and Products Containing Same

Singapore Terminated based on a finding of

no violation.

337-TA-527 Certain Digital Image Storage and

 Retrieval Devices

Taiwan, Japan Terminated based on withdrawal

of the complaint.

337-TA-528 Certain Foam Masking Tape Spain, Netherlands,

Portugal, Canada,

France, Germany

Issued a general exclusion.

337-TA-529 Certain Digital Processors, Digital

 Processing Systems, Components

 Thereof, and Products Containing

 Same

Japan Terminated based on a settlement

agreement.

337-TA-531 Certain Network Controllers

 and Products Containing Same

Taiwan Terminated based on a settlement

agreement.

337-TA-532 Certain Automated Fuel Caps

 and Components Thereof

Germany, Belgium Terminated based on withdrawal

of the complaint.

337-TA-535 Certain Network Communications

 Systems for Optical Networks 

 and Components Thereof

Canada, Singapore,

Mauritius

Terminated based on withdrawal

of the complaint.

337-TA-536 Certain Pool Cues with Self-Aligning

 Joint Assemblies and Components

 Thereof

Taiwan, China Terminated based on a finding of

no violation.

337-TA-537 Certain Weather Stations and

 Components Thereof

Hong Kong Terminated based on withdrawal

of the complaint.

337-TA-540 Certain Automotive Grilles Taiwan Terminated based on withdrawal

of the complaint.

337-TA-544 Certain Hand-Held Mobile Computing

 Devices, Components Thereof and

 Cradles Thereof

Mexico Terminated based on withdrawal

of the complaint.

 

See footnotes at end of table.
A-21

Table A–10 Section 337 investigations and related proceedings completed by the U.S. International Trade

Commission during 2005 and those pending on December 31, 2005—Continued

Status of 

Investigation Article Countrya

Commission

determination

Pending:

337-TA-501 Certain Encapsulated Integrated 

 Circuit Devices and Products

 Containing Same

Malaysia Pending before the Commission.

337-TA-503b Certain Automated Mechanical

 Transmission Systems for Medium-

 Duty and Heavy-Duty Trucks, and

 Components Thereof

Germany Consolidated enforcement and

advisory opinion proceedings

pending before the Commission.

337-TA-509 Certain Personal Computers, Server

 Computers, and Components

 Thereof

Taiwan, China Pending before the ALJ.

337-TA-512 Certain Light-Emitting Diodes and

 Products Containing Same

Malaysia Pending before the Commission.

337-TA-519 Certain Personal Computers, 

 Monitors, and Components Thereof

Mexico, China Pending before the ALJ.

337-TA-523 Certain Optical Disk Controller Chips

 and Chipsets and Products

 Containing the Same, Including

 DVD Players and PC Optical

 Storage Devices II

Taiwan Pending before the Commission.

337-TA-524b Certain Point of Sale Terminals and

 Components Thereof

France, Israel,

Korea, Ireland

Ancillary sanctions proceeding

pending before the Commission.

337-TA-530 Certain Electric Robots and

 Component Parts Thereof

Germany, Japan Pending before the Commission.

337-TA-533 Certain Rubber Antidegradants,

 Components Thereof, and Products

 Containing Same

China, Korea Pending before the ALJ.

337-TA-534 Certain Color Television Receivers

 and Color Display Monitors, and

 Components Thereof

Taiwan Pending before the Commission.

337-TA-538 Certain Audio Processing Integrated

 Circuits, and Products Containing

 Same

China Pending before the ALJ.

337-TA-539 Certain Tadalafil or Any Salt or

 Solvate Thereof, and Products

 Containing Same 

India, Panama,

Haiti, Nicaragua,

Mexico, Australia

Pending before the Commission.

337-TA-541 Certain Power Supply Controllers and

 Products Containing Same

Taiwan Pending before the ALJ.

337-TA-542 Certain DVD/CD Players and 

 Recorders, Color Television 

 Receivers and Monitors, and 

 Components Thereof

Mexico, China Pending before the ALJ.

See footnotes at end of table.
A-22

Table A–10 Section 337 investigations and related proceedings completed by the U.S. International Trade

Commission during 2005 and those pending on December 31, 2005—Continued

Status of 

Investigation Article Countrya

Commission

determination

337-TA-543 Certain Baseband Processor Chips

 and Chipsets, Transmitter and

 Receiver (Radio) Chips, Power

 Control Chips, and Products

 Containing Same, Including Cellular

 Telephone Handsets

China, Korea Pending before the ALJ.

337-TA-545 Certain Laminated Floor Panels Netherlands,

Ireland, China,

Canada, Malaysia

Pending before the ALJ.

337-TA-546 Certain Male Prophylactic Devices India Pending before the ALJ.

337-TA-547 Certain Personal Computers, 

 Monitors and Components Thereof

China, Mexico Pending before the ALJ.

337-TA-548 Certain Tissue Converting Machinery,

 Including Rewinders, Tail Sealers,

 Trim Removers, And Components

 Thereof

Taiwan Pending before the ALJ.

337-TA-549 Certain Ink Sticks for Solid Ink

 Printers

Korea Pending before the ALJ.

337-TA-550 Certain Modified Vaccinia Ankara

 ("MVA") Viruses and Vaccines and

 Pharmaceutical Compositions

 Based Thereon

United Kingdom Pending before the ALJ.

337-TA-551 Certain Laser Bar Code Scanners and

 Scan Engines, Components Thereof

 And Products Containing Same

China Pending before the ALJ.

337-TA-552 Certain Flash Memory Devices and

 Components Thereof, and Products

 Containing Such Devices and

 Components

Korea Pending before the ALJ.

337-TA-553 Certain NAND Flash Memory Devices

 and Products Containing Same

Japan Pending before the ALJ.

337-TA-554 Certain Axle Bearing Assemblies,

 Components Thereof, and

 Products Containing Same

Korea Pending before the ALJ.

337-TA-555 Certain Devices for Determining 

 Organ Positions and Certain

 Subassemblies Thereof

Canada Pending before the ALJ.

337-TA-556 Certain High-Brightness Light

 Emitting Diodes and Products

 Containing Same

Taiwan Pending before the ALJ.

Source: U.S. International Trade Commission.

 a This column lists the countries of the foreign respondents named in the investigation.

 b Inv. No. 337-TA-503 was terminated on April 7, 2005; consolidated enforcement and advisory proceedings

pending. Inv. No 337-TA-524 was terminated on July 8, 2005; sanctions proceeding pending.
A-23

Table A–11 Outstanding Section 337 exclusion orders as of December 31, 2005

Investigation

No. Article Countrya

Date patent

expiresb

337-TA-55 Certain Novelty Glasses Hong Kong Nonpatent

337-TA-69 Certain Airtight Cast-Iron Stoves Taiwan, Korea Nonpatent

337-TA-87 Certain Coin-Operated Audio-Visual Games and

 Components Thereof

Japan, Taiwan Nonpatent

337-TA-105 Certain Coin-Operated Audio-Visual Games and

 Components Thereof

Japan, Taiwan Nonpatent

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 Rubber

 Soles

Korea Nonpatent

337-TA-137 Certain Heavy-Duty Staple Gun Tackers Taiwan, Hong Kong, 

 Korea

Nonpatent

337-TA-152 Certain Plastic Food Storage Containers Hong Kong, Taiwan Nonpatent

337-TA-167 Certain Single Handle Faucets Taiwan Nonpatent

337-TA-174 Certain Woodworking Machines Taiwan, South Africa Nonpatent

337-TA-195 Certain Cloisonne Jewelry Taiwan Nonpatent

337-TA-197 Certain Compound Action Metal Cutting Snips and

 Components Thereof

Taiwan Nonpatent

337-TA-229 Certain Nut Jewelry and Parts Thereof Philippines, Taiwan Nonpatent

337-TA-231 Certain Soft Sculpture Dolls, Popularly Known as

 "Cabbage Patch Kids," Related Literature, and

 Packaging Therefore

No foreign respondents Nonpatent

337-TA-266 Certain Reclosable Plastic Bags and Tubing Singapore, Taiwan,

 Korea, Thailand,

 Hong Kong

Nonpatent

337-TA-279 Certain Plastic Light Duty Screw Anchors Taiwan Nonpatent

337-TA-285 Certain Chemiluminescent Compositions and

 Components Thereof and Methods of Using, and

 Products Incorporating, the Same

France Nonpatent

337-TA-287 Certain Strip Lights Taiwan Nonpatent

337-TA-295 Certain Novelty Teleidoscopes Hong Kong, Taiwan Nonpatent

337-TA-314 Certain Battery-Powered Ride-On Toy Vehicles and

 Components Thereof

Taiwan Sept. 22, 2006c

337-TA-319 Certain Automotive Fuel Caps and Radiator Caps and

 Related Packaging and Promotional Materials

Taiwan Nonpatent

June 22, 2006c

July 22, 2006c

See footnotes at end of table.
A-24

Table A–11 Outstanding Section 337 exclusion orders as of December 31, 2005—Continued

Investigation

No.

Article Countrya Date patent

expiresb

337-TA-321 Certain Soft Drinks and Their Containers Colombia Nonpatent

337-TA-324 Certain Acid-Washed Denim Garments

 and Accessories

Hong Kong, Taiwan,

 Brazil, Chile

Oct. 22, 2006c

337-TA-333 Certain Woodworking Accessories Taiwan Mar. 2, 2008c

337-TA-360 Certain Devices For Connecting Computers Via

 Telephone Lines

Taiwan Feb. 13, 2007

337-TA-365 Certain Audible Alarm Devices For Divers Taiwan Aug. 21, 2007c

Oct. 12, 2008c

337-TA-374 Certain Electrical Connectors and Products Containing

 Same

Taiwan Jan. 22, 2008

337-TA-376 Certain Variable Speed Wind Turbines and

 Components Thereof

Germany Feb. 1, 2011c

337-TA-378 Certain Asian-Style Kamaboko Fish Cakes Japan Nonpatent

337-TA-380 Certain Agricultural Tractors Under 50 Power Take-Off

 Horsepower

Japan Nonpatent

337-TA-383 Certain Hardware Logic Emulation Systems and

 Components Thereof

France Oct. 5, 2008 

Oct. 5, 2008

Oct. 5, 2008

Apr. 28, 2009

Apr. 28, 2009

337-TA-391 Certain Toothbrushes and the Packaging Thereof China, Taiwan Aug. 4, 2006

337-TA-406 Certain Lens-Fitted Film Packages China, Hong Kong,

 Korea

May 23, 2006

Aug. 8, 2006

Nov. 28, 2006

Sept. 4, 2007

Sept. 4, 2007

Nov. 27, 2007

Apr. 5, 2008

Nov. 5, 2008

Mar. 7, 2009

Aug. 10, 2010

Aug. 13, 2010

Nov. 1, 2011

Jan. 10, 2012

Apr. 18, 2012

July 25, 2012

337-TA-413 Certain Rare-Earth Magnets and Magnetic Material and

 Articles Containing Same

China, Taiwan Feb. 7, 2006

July 25, 2006

June 7, 2015

337-TA-416 Certain Compact Multipurpose Tools China, Taiwan July 1, 2011

Oct. 21, 2011

Oct. 21, 2011

Oct. 21, 2011

337-TA-422 Certain Two-Handle Centerset Faucets and

 Escutcheons, and Components Thereof

Taiwan, China May 31, 2008

See footnotes at end.
A-25

Table A–11 Outstanding Section 337 exclusion orders as of December 31, 2005—Continued

Investigation

No.

Article Countrya Date patent

expiresb

337-TA-424 Certain Cigarettes and Packaging Thereof No foreign respondents Nonpatent

337-TA-440 Certain 4-Androstenediol China July 13, 2018

337-TA-446 Certain Ink Jet Cartridges and Components Thereof Taiwan Nov. 3, 2007

Dec. 22, 2008

Apr. 25, 2012

337-TA-448 Certain Oscillating Sprinklers, Sprinkler Components,

 and Nozzles

Taiwan, Israel, Germany July 8, 2014

July 8, 2014

337-TA-473 Certain Video Game Systems, Accessories, and

 Components Thereof

No foreign respondents Dec. 18, 2015

Dec. 25, 2015

337-TA481/491Certain Display Controllers with Upscaling Functionality

 and Products Containing Same; and Certain Display

 Controllers and Products Containing Same

Taiwan Feb. 24, 2017

337-TA-482 Certain Compact Disc and DVD Holders Denmark, Hong Kong,

Taiwan

May 1, 2015

337-TA-486 Certain Agricultural Tractors, Lawn Tractors, Riding

 Lawnmowers, and Components Thereof 

China Nonpatent

337-TA-487 Certain Agricultural Vehicles and Components Thereof China, Netherlands,

France, Germany, and

Canada

Nonpatent

337-TA-489 Certain Sildenafil or Any Pharmaceutically Acceptable

 Salt Thereof, Such as Sildenafil Citrate, and Products

 Containing Same

Belize, Israel, Nicaragua,

Syria, United Kingdom,

India, China

June 18, 2011

337-TA-492 Certain Plastic Grocery and Retail Bags Thailand, China,

Singapore, Hong Kong

Dec. 6, 2010

337-TA-494 Certain Automotive Measuring Devices, Products

 Containing Same, and Bezels for Such Devices

Taiwan Nonpatent

337-TA-498 Certain Insect Traps China Jan. 30, 2018

337-TA-500 Certain Purple Protective Gloves Malaysia, China Nonpatent

337-TA-503 Certain Automated Mechnical Transmission Systems

 for Medium-Duty and Heavy-Duty Trucks, and

 Components Thereof

Germany Feb. 6, 2007

337-TA-505 Certain Gun Barrels Used in Firearms Switzerland, Netherlands Sept. 25, 2015

Aug. 25, 2017

337-TA-510 Certain Systems for Detecting Viruses or Worms,

 Components Thereof, and Products Containing Same

Japan, Taiwan Sept. 26, 2015

337-TA-511 Certain Pet Food Treats China, Brazil Sept. 23, 2011

337-TA-512 Certain Light-Emitting Diodes And Products Containing

 Same

Malaysia July 27, 2018

July 27, 2018

July 27, 2018

Jan. 18, 2015

See footnotes at end.
A-26

Table A–11 Outstanding Section 337 exclusion orders as of December 31, 2005—Continued

Investigation

No.

Article Countrya Date patent

expiresb

337-TA-514 Certain Plastic Food Containers China Oct. 19, 2013

Dec. 23, 2017

Dec. 23, 2017

337-TA-518 Certain Ear Protection Devices China, Taiwan June 2, 2015

337-TA-522 Certain Ink Markers and Packaging Thereof China, India, Indonesia,

Korea

Nonpatent

337-TA-528 Certain Foam Masking Tape Spain, Netherlands,

Portugal, Canada,

France, Germany

May 10, 2011

Source: U.S. International Trade Commission.

a This column lists the countries of the foreign respondents named in the investigation. b Multiple dates indicate the expiration dates of separate patents within the investigation. c Patent term extended pursuant to 35 U.S.C. 154©).
Table A–12 U.S. imports for consumption of leading GSP duty-free imports, 2005

(1,000 dollars)

HTSRank HTS No. Description Total imports GS1 2709.00.20 Petroleum oils and oils from bituminous minerals, crude, testing 25 degrees A.P.I. 

 or more 80,646,484 

2 7113.19.50 Articles of jewelry and parts thereof, of precious metal except silver, except necklaces and clasps 5,782,627 

3 7606.12.30 Aluminum alloy plates, sheets, and strip, of a thickness exceeding 0.2 mm, rectangular (including square), not clad 1,957,446 

4 2905.11.20 Methanol (methyl alcohol), n.e.s.o.i. 1,355,753 5 7113.19.29 Gold necklaces and neck chains, other than rope or mixed link 933,531 6 7408.11.60 Refined copper wire, with a max cross-sectional dimension over 6 but not over 9.5 mm 1,369,513 

7 7202.41.00 Ferrochromium containing more than 3 percent of carbon 303,317 8 8708.39.50 Brakes and servo-brakes and parts thereof, n.e.s.o.i., excluding mounted brake linings, for motor vehicles not agricultural tractors 3,362,674 

9 8544.30.00 Ignition wiring sets, other wiring sets of a kind used in vehicles, aircraft or ships 5,782,030 10 3907.60.00 Polyethylene terephthalate in primary forms 1,065,883 11 3923.21.00 Sacks and bags, including cones, for the conveyance or packing of goods, of polymers of ethylene 1,262,418 12 1701.11.10 Raw sugar not containing added flavoring or coloring 540,448 

13 2709.00.10 Petroleum oils and oils from bituminous minerals, crude, testing under 25 degrees A.P.I. 48,435,154 

14 8708.99.80 Parts and accessories n.e.s.o.i., of motor vehicles, n.e.s.o.i. 6,236,165 

15 7113.11.50 Articles of jewelry and parts thereof, of silver, n.e.s.o.i., valued over $18 per dozen pieces or parts 869,498 

16 8708.70.45 Road wheels for motor vehicles 1,891,913 17 8528.12.28 Non-high definition color television reception apparatus, nonprojection, video display diagonal over 35.56 cm, incorporating a VCR or player 476,838 

18 8503.00.95 Other parts, n.e.s.o.i., suitable for use solely or principally with electric motors, generators, generating sets, and rotary converters 1,019,421 19 4418.20.80 Doors and their frames and thresholds, of wood, other than French doors 635,444 20 4107.11.50 Full grain unsplit upholstery leather of bovines n.e.s.o.i. and equines, no hair on, prepared after tanning or crusting, not of HTS 4114 247,477 

 Total of items shown 164,174,031 2

All other 1,489,179,267 2 Total 1,653,353,298 4

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Statistics do not include imports from the U.S. Virgin Islands. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inc

A-27
A-28

Table A–13 U.S. imports for consumption and imports eligible for GSP treatment, by import categories under the

Harmonized Tariff Schedule, 2005

(Million dollars)

HTS section Description Total imports GSP eligible GSP duty free

 I Live animals; animal products 18,649 106 95

 II Vegetable products 17,950 1,194 316

 III Animal and vegetable fats, oils, and waxes 2,344 141 134

 IV Prepared foodstuffs; beverages, spirits; tobacco 32,414 2,268 1,281

 V Mineral products 269,762 11,515 5,887

 VI Chemical products 119,907 3,054 1,661

 VII Plastics and rubber 47,363 2,751 1,970

 VIII Raw hides and skins, leather, furskins; saddlery;

 handbags 9,930 592 522

 IX Wood; charcoal; cork ; straw and other plaiting

 materials 24,443 1,375 966

 X Wood pulp; paper and paperboard 25,542 0 0

 XI Textiles and textile articles 92,550 365 235

 XII Footwear, headgear, umbrellas; artificial flowers 21,005 40 33

 XIII Stone, plaster, cement, asbestos, ceramic and

 glass articles 15,957 1,812 935

 XIV Pearls, precious or semi-precious stones;

 imitation jewelry 37,090 4,350 3,592

 XV Base metals and articles of base metal 89,278 4,605 3,438

 XVI Machinery and appliances; electrical equipment 427,787 5,834 3,293

 XVII Vehicles, aircraft, vessels, transport equipment 221,459 1,788 1,452

 XVIII Optical, photographic, medical, and musical

 instruments; clocks 52,007 824 450

 XIX Arms and ammunition; parts and accessories

 thereof 1,444 66 61

 XX Miscellaneous manufactured articles 64,984 534 424

 XXI Works of art, collectors' pieces and antiques 5,477 0 0

 XXII Special classification provisions 56,011 0 0

 Total 1,653,353 43,217 26,746

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

Note: Because of rounding, figures may not add to totals shown.
A-29

Table A–14 U.S. imports for consumption under AGOA provisions, by source, 2003–05

(1,000 dollars) 

Rank Source 2003 2004 2005

Percent change

2004–05 

1 Nigeria 9,353,914 15,415,913 22,460,052 45.7

2 Angola 0 1,249,211 4,216,469 237.5

3 Gabon 1,177,431 1,919,407 2,487,326 29.6

4 Chad 14,438 293,801 1,028,954 250.2

5 Republic of the Congo 337,899 0 571,419 N/A

6 South Africa 998,420 0 455,316 N/A

7 Lesotho 372,544 447,622 388,344 -13.2

8 Madagascar 186,187 314,842 273,193 -13.2

9 Kenya 180,599 279,898 272,131 -2.8

10 Swaziland 127,005 175,927 160,462 -8.8

11 Mauritius 135,111 147,816 146,807 -0.7

12 Cameroon 146,746 242,725 100,910 -58.4

13 Namibia 32,132 75,904 53,058 -30.1

14 Ghana 29,156 63,170 49,927 -21.0

15 Malawi 35,837 35,052 32,375 -7.6

16 Botswana 6,324 20,138 30,044 49.2

17 Uganda 1,442 4,022 4,854 20.7

18 Ethiopia 1,772 3,532 3,646 3.2

19 Mozambique 2,516 2,151 2,828 31.5

20 Tanzania 1,110 2,984 2,812 -5.8

21 Cape Verde 2,452 2,902 2,115 -27.1

22 Niger 2 0 24 N/A

23 Senegal 11 7 9 22.7

24 Rwanda 0 0 1 N/A

25 Guinea-Bissau 0 26,131 0 -100.0

26 Zambia 0 22 0 -100.0

27 Mali (c

) 3 0 -100.0

28 Sierra Leone 0 3 0 -100.0

29 Benin 0 0 0 (b

)

30 Democratic Republic of the Congo 0 0 0 (b

)

31 Djibouti 0 0 0 (b

)

32 Gambia 0 0 0 (b

)

33 Guinea 0 0 0 (b

)

34 Mauritania 0 0 0 (b

)

35 São Tomé and Príncipe 0 0 0 (b

)

36 Seychelles 0 0 0 (b

)

37 Burkina Faso (a

) (a) 0(b)

38 Côte d'Ivoire 46,361 88,601 (a

) (b)

39 Central African Republic 0 (a

) (a) (b)

40 Eritrea 0 (a

) (a) (b)

 Total 13,189,410 21,986,472 32,743,077 48.9

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

Note: Because of rounding, figures may not add to totals shown.

a

Not AGOA eligible.

b

Undefined.

c

Less than 0.5.
Table A–15 U.S. imports for consumption of leading imports under AGOA, 2003–05

(1,000 dollars) 

HTS No. Description 2003 2004 

2709.00.20 Petroleum oils and oils from bituminous minerals, crude, testing 25 degrees A.P.I. or more 10,492,817 18,548,189 2709.00.10 Petroleum oils and oils from bituminous minerals, crude, testing under 25 degrees A.P.I. 51,248 314,487 

2710.19.05 Distillate and residual fuel oil (including blends) derived from petroleum or oils from 

 bituminous minerals, testing under 25 degrees A.P.I. 400,227 550,644 

2710.11.25 Naphthas, not motor fuel/blending stock, from petroleum oils/oils from bituminous minerals,

 minimum 70 percent by weight of such products 137,767 220,652 

6110.20.20 Sweaters, pullovers, sweatshirts, waistcoats, and similar articles, knitted or crocheted, of

 cotton, n.e.s.o.i. 233,175 360,754 

6204.62.40 Women's or girls' trousers, breeches, and shorts, not knitted or crocheted, of cotton,

 n.e.s.o.i. 254,571 314,851 

6203.42.40 Men's or boys' trousers, breeches, and shorts, not knitted or crocheted, of cotton, not

 containing 15 percent or more down 213,648 277,652 

8703.23.00 Passenger motor vehicles with spark-ignition internal combustion reciprocating piston

 engine, cylinder capacity 1,500-3000 cc 319,362 205,157 

2710.11.45 Mixtures of hydrocarbons n.e.s.o.i., none comprising over half of product, 70% or more by

 weight from petroleum oils and bituminous minerals 16,863 6 

6110.30.30 Sweaters, pullovers, sweatshirts, waistcoats, and similar articles, knitted or crocheted, of

 man-made fibers, n.e.s.o.i. 57,190 77,738 

6205.20.20 Men's or boys' shirts, not knitted or crocheted, of cotton, not certified hand-loomed and

 folklore product 45,845 74,299 

7202.11.50 Ferromanganese containing by weight more than 4 percent carbon 39,394 143,210 6104.62.20 Women's or girls' trousers, breeches, and shorts, knitted or crocheted, of cotton 42,931 66,849 6109.10.00 T-shirts, singlets, tank tops, and similar garments, knitted or crocheted, of cotton 46,343 69,415 6104.63.20 Women's or girls' trousers, breeches and shorts, knitted or crocheted, of synthetic fibers,

 n.e.s.o.i. 22,012 35,434 

3823.70.60 Industrial fatty alcohols, other than derived from fatty substances of animal or vegetable

 origin 5,527 21,986 

0805.10.00 Oranges, fresh or dried 23,612 26,431 6103.43.15 Men's or boys' trousers, breeches and shorts, knitted or crocheted, of synthetic fibers,

 n.e.s.o.i. 25,151 39,244 

6105.10.00 Men's or boys' shirts, knitted or crocheted, of cotton 22,410 23,290 2204.21.50 Non-sparkling wine of fresh grapes, other than Tokay, not over 14 percent alcohol, in

 containers not over 2 liters 12,970 18,241 

0802.90.98 Nuts, fresh or dried, shelled, n.e.s.o.i. 18,773 27,005 6106.10.00 Women's or girls' blouses and shirts, knitted or crocheted, of cotton 22,174 28,089 6103.42.10 Men's and boys' trousers, breeches, and shorts, knitted or crocheted, of cotton 21,817 23,813 2710.11.15 Light motor fuel, 70 percent or more by weight from petroleum oils and bituminous minerals,

 other than crude 0 0 

2207.10.60 Undenatured ethyl alcohol for nonbeverage purposes 14,203 14,445 

 Total of items shown 12,540,031 21,481,880 All other 649,379 504,592  Total of all commodities 13,189,410 21,986,472 

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or included."

A-30
A-31

Table A–16 U.S. imports for consumption under ATPA provisions, by source, 2003–05

(1,000 dollars)

Rank Source 2003 2004 2005

Percent change

2004–05

1 Colombia 2,908,692 3,888,888 4,653,248 19.7

2 Ecuador 1,553,604 2,747,335 4,370,654 59.1

3 Peru 1,279,283 1,602,673 2,282,661 42.4

4 Bolivia 94,453 120,363 157,386 30.8

 Total 5,836,032 8,359,258 11,463,949 37.1

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

Note: Because of rounding, figures may not add to the totals shown.
Table A–17 U.S. imports for consumption of leading imports under ATPA, 2003–05

(1,000 dollars) 

HTS No. Description 2003 2004 

2709.00.10 Petroleum oils and oils from bituminous minerals, crude, testing under 25 degrees

 A.P.I. 1,434,729 2,891,605 

2709.00.20 Petroleum oils and oils from bituminous minerals, crude, testing 25 degrees A.P.I. or

 more 1,556,843 1,742,257 

7403.11.00 Refined copper cathodes and sections of cathodes 447,368 422,392 2710.19.05 Distillate and residual fuel oil (including blends) derived from petroleum or oils from

 bituminous minerals, testing under 25 degrees A.P.I. 236,458 378,163 

2710.11.25 Naphthas, not motor fuel/blending stock, from petroleum oils/oils from bituminous

 minerals, minimum 70 percent by weight of such products 174,970 253,009 

6110.20.20 Sweaters, pullovers, sweatshirts, waistcoats, and similar articles, knitted or crocheted,

 of cotton, n.e.s.o.i. 202,262 297,903 

0603.10.60 Roses, fresh cut 204,473 238,799 6105.10.00 Men's or boys' shirts, knitted or crocheted, of cotton 115,382 153,443 6109.10.00 T-shirts, singlets, tank tops, and similar garments, knitted or crocheted, of cotton 84,559 128,319 0603.10.80 Cut flowers and flower buds suitable for bouquets, n.e.s.o.i. 124,475 181,902 6203.42.40 Men's or boys' trousers, breeches, and shorts, not knitted or crocheted, of cotton, not

 containing 15 percent or more down 50,922 96,972 

0603.10.70 Chrysanthemums, standard carnations, anthuriums and orchids, fresh cut 98,709 98,123 0709.20.90 Asparagus, fresh or chilled, n.e.s.o.i. 60,498 79,478 7113.19.50 Articles of jewelry and parts thereof, of precious metal except silver, except necklaces

 and clasps 59,108 76,376 

6106.10.00 Women's or girls' blouses and shirts, knitted or crocheted, of cotton 29,743 44,605 6204.62.40 Women's or girls' trousers, breeches, and shorts, not knitted or crocheted, of cotton,

 n.e.s.o.i. 37,888 63,767 

1604.14.30 Tunas and skipjack, not in oil, in airtight containers, n.e.s.o.i. 25,474 31,466 3904.10.00 Polyvinyl chloride, not mixed with any other substances, in primary forms 9,397 16,442 7113.19.29 Gold necklaces and neck chains, other than rope or mixed link 42,039 40,765 2710.19.15 Kerosene-type jet fuel, 70 percent or more by weight from petroleum oils and

 bituminous minerals, other than crude 2,184 12,517 

2402.20.80 Cigarettes containing tobacco but not clove, paper-wrapped 55,271 57,946 7113.19.21 Rope necklaces and neck chains of gold 10,791 22,854 0603.10.30 Miniature (spray) carnations, fresh cut 23,213 32,035 0804.50.40 Guavas, mangoes, and mangosteens, fresh, if entered during the period from

 September 1, in any year, to the following May 31, inclusive 25,078 25,853 

6110.30.30 Sweaters, pullovers, sweatshirts, waistcoats, and similar articles, knitted or crocheted,

 of man-made fibers, n.e.s.o.i. 17,666 27,819  Total of items shown 5,129,499 7,414,808 All other 706,533 944,450  Total of all commodities 5,836,032 8,359,258 

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or included."

A-32
A-33

Table A–18 U.S. imports for consumption under CBERA provisions, by source, 2003–05

(1,000 dollars)

Rank Source 2003 2004 2005

Percent change

2004–05

1 Trinidad and Tobago 1,410,853 1,674,430 2,734,524 63.3

2 Dominican Republic 2,614,736 2,598,254 2,483,579 -4.4

3 Honduras 2,175,122 2,314,464 2,372,315 2.5

4 Guatemala 1,088,930 1,189,520 1,246,183 4.8

5 El Salvador 1,185,146 1,125,843 1,226,033 8.9

6 Costa Rica 1,083,025 1,078,966 1,157,763 7.3

7 Nicaragua 249,015 331,229 403,798 21.9

8 Haiti 210,690 218,264 303,390 39.0

9 Jamaica 178,939 166,708 152,163 -8.7

10 Bahamas 87,996 92,705 111,345 20.1

11 Belize 41,583 44,477 54,749 23.1

12 Panama 40,834 32,791 40,751 24.3

13 St. Kitts-Nevis 25,713 29,663 25,211 -15.0

14 Netherlands Antilles 2,714 5,206 6,763 29.9

15 Guyana 16,668 21,048 6,721 -68.1

16 St. Lucia 5,288 5,836 6,353 8.9

17 Barbados 6,951 3,513 3,859 9.9

18 St. Vincent and the Grenadines 2,536 2,925 521 -82.2

19 British Virgin Islands 229 319 198 -37.9

20 Dominica 2,528 369 79 -78.5

21 Antigua 60 51 34 -34.4

22 Aruba 69 29 30 3.3

23 Grenada 3 11 9 -12.6

24 Montserrat 0 0 0 N/A

 Total 10,426,629 10,936,621 12,336,372 12.8

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

Note: Because of rounding, figures may not add to the totals shown.
Table A–19 U.S. imports for consumption of leading imports under CBERA, 2003–05

(1,000 dollars)

HTS No. Description 2003 2004 

6109.10.00 T-shirts, singlets, tank tops, and similar garments, knitted or crocheted, of cotton 1,195,086 1,266,969 2709.00.20 Petroleum oils and oils from bituminous minerals, crude, testing 25 degrees A.P.I. or more 741,541 802,713 

6110.20.20 Sweaters, pullovers, sweatshirts, waistcoats, and similar articles, knitted or crocheted, of

 cotton, n.e.s.o.i. 677,858 830,281 

6203.42.40 Men's or boys' trousers, breeches, and shorts, not knitted or crocheted, of cotton, not

 containing 15 percent or more down 822,045 797,626 

2905.11.20 Methanol (methyl alcohol), n.e.s.o.i. 340,004 460,208 2710.19.05 Distillate and residual fuel oil (including blends) derived from petroleum or oils from

 bituminous minerals, testing under 25 degrees A.P.I. 160,934 205,236 

6107.11.00 Men's or boys' underpants and briefs, knitted or crocheted, of cotton 440,893 376,493 6203.43.40 Men's or boys' trousers, breeches, and shorts, not knitted or crocheted, of synthetic fibers,

 n.e.s.o.i. 343,506 318,984 

6212.10.90 Brassieres, not containing lace, net, or embroidery, not 70 percent or more silk, whether or

 not knitted or crocheted 283,415 337,205 

6110.30.30 Sweaters, pullovers, sweatshirts, waistcoats, and similar articles, knitted or crocheted, of

 man-made fibers, n.e.s.o.i. 183,571 232,861 

2402.10.80 Cigars, cheroots and cigarillos, each valued 23 cents or over 228,348 250,000 6204.62.40 Women's or girls' trousers, breeches, and shorts, not knitted or crocheted, of cotton,

 n.e.s.o.i. 269,829 294,025 

0804.30.40 Pineapples, fresh or dried, not reduced in size, in crates or other packages 194,147 99,141 6109.90.10 T-shirts, singlets, tank tops, and similar garments, knitted or crocheted, of man-made fibers 133,081 154,890 

6108.21.00 Women's or girls' briefs and panties, knitted or crocheted, of cotton 219,738 223,392 2710.11.25 Naphthas, not motor fuel/blending stock, from petroleum oils/oils from bituminous minerals,

 minimum 70 percent by weight of such products 66,155 126,377 

7113.19.50 Articles of jewelry and parts thereof, of precious metal except silver, except necklaces and

 clasps 186,333 193,815 

6115.92.90 Stockings, socks, and other hosiery, not surgical and not containing lace or net, knitted or

 crocheted, of cotton, n.e.s.o.i. 157,970 213,763 

2207.10.60 Undenatured ethyl alcohol for nonbeverage purposes 74,145 96,813 2710.11.45 Mixtures of hydrocarbons n.e.s.o.i., none comprising over half of product, 70 or more by

 weight from petroleum oils and bituminous minerals 9,096 14,369 

1701.11.10 Raw sugar not containing added flavoring or coloring 128,001 138,293 2709.00.10 Petroleum oils and oils from bituminous minerals, crude, testing under 25 degrees A.P.I. 167,502 179,559 6205.30.20 Men's or boys' shirts, not knitted or crocheted, of manmade fibers, n.e.s.o.i. 97,214 123,606 3903.11.00 Polystyrene, expandable, in primary forms 81,482 86,518 0807.19.20 Cantaloupes, fresh, not entered Aug. 1-Sept. 15 106,631 83,046 

 Total of items shown 7,308,524 7,906,181 

All other 3,121,105 3,030,441  Total of all commodities 10,429,629 10,936,621 

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or included."

A-34
A-35

Table A–20 WTO dispute-settlement cases to which the United States was a party, developments in 2005a

Case No. Title Complainant Action (month/day) 

DS108 United States—Tax Treatment for

“Foreign Sales Corporations”

EC Request for establishment of a panel under Article 21.5 (1/13)

Establishment of a panel under Article 21.5 (2/17)

Circulation of Article 21.5 panel report (9/30)

Notification of appeal

 - United States (11/24)

 - EC (11/28)

DS174 European Communities— Protection

of Trademarks and Geographical

Indications for Agricultural Products and

Foodstuffs

United States Adoption of the panel reports (4/20)

Information of intention to implement (5/19)

Agreement on RPT under Article 21.3(b) (6/9)

DS184 United States— Antidumping Measures

on Certain Hot-Rolled Steel Products

from Japan

Japan Understanding regarding Article 22 (7/7)

DS212 United States— Countervailing Measures

Concerning Certain Products from the

European Communities

EC Circulation of Article 21.5 panel report (8/17)

Adoption of the Article 21.5 panel report (9/27)

DS217

DS234

United States—Continued Dumping and

Subsidy Offset Act of 2000

Australia; Brazil;

Chile; EC; India;

Indonesia;

Japan; Korea;

Thailand (DS217)

Canada; Mexico

(DS234)

Notification of suspending concessions

 - EC and Canada (4/29)

 - Japan (8/18)

DS245 Japan—Measures Affecting the

Importation of Apples

United States Adoption of Article 21.5 panel report (7/30)

Notification of mutually agreed solution (8/30)

DS257 United States—Final Countervailing Duty

Determination with respect to certain

Softwood Lumber from Canada

Canada Referral to arbitration under Article 22.6 (1/14)

Circulation of Article 21.5 panel report (8/1)

Notification of appeal (US) (9/6)

Adoption of Article 21.5 appellate body and panel

 reports (12/20)

DS264 United States—Final Dumping

Determination on Softwood Lumber from

Canada

Canada Statement on completion of implementation (5/19)

Request for the establishment of a panel under Article 21.5

 (Canada) (5/19)

Establishment of a panel under Article 21.5 (6/1)

DS267 United States—Subsidies on Upland

Cotton

Brazil Adoption of appellate body and panel reports (3/21)

Information of intention to implement (4/20)

Referral to arbitration under DSU 22.6 and SCM Article 7.10

 (10/18)

Suspension of arbitration proceedings (11/21)

DS268 United States—Sunset Reviews of

Antidumping Measures on Oil Country

Tubular Goods from Argentina

Argentina Information of intention to implement (1/14)

Request for arbitration under Article 21.3©) (Argentina) (3/11)

Circulation of Arbitrator’s Award under 21.3©) (6/7)

DS277 United States—Investigation of the

International Trade Commission in

Softwood Lumber from Canada

Canada Request for establishment of a panel under Article 21.5 

 (Canada) (2/14)

Circulation of Article 21.5 panel report (11/15)

DS282 United States—Antidumping Measures

on Oil Country Tubular Goods (OCTG)

from Mexico

Mexico Circulation of panel report (6/20)

Notification of appeal

 - Mexico (8/4)

 - United States (8-16)

Adoption of appellate body and panel reports (11/28)
A-36

Table A–20 WTO dispute-settlement cases to which the United States was a party, developments in 2005—Continued

Case No. Title Complainant Action (month/day) 

DS294 United States—Laws, Regulations and

Methodology for Calculating Dumping

Margins (Zeroing)

EC Circulation of panel report (10/31)

Notification of appeal (1/17/06)

DS285 United States—Measures Affecting the

Cross-Border Supply of Gambling and

Betting Services

Antigua and

Barbuda

Notification of appeal 

 - United States (1/7)

 - Antigua and Barbuda (1/19)

Adoption of appellate body and panel reports (4/20)

Agreement on RPT under Article 21.3(b) (8/19)

DS295 Mexico—Definitive Antidumping

Measures on Beef and Rice

United States Circulation of panel report (6/6)

Notification of appeal (Mexico) (7/20)

Adoption of appellate body and panel reports (12/20)

DS296 United States—Countervailing Duty

Investigation on Dynamic Random

Access Memory Semiconductors

(DRAMS) from Korea

Korea Circulation of panel report (2/21)

Notification of appeal (United States) (3/29)

Adoption of appellate body and panel reports (7/20)

Agreement on RPT under Article 21.3(b) (11/7)

DS305 Egypt—Measures Affecting Imports of

Textile and Apparel Products

United States Mutually agreed solution (5/20)

DS308 Mexico—Tax Measures on Soft Drinks

and Other Beverages

United States Circulation of panel report (10/7)

Notification of appeal (Mexico) (12/6)

DS309 China—Value-Added Tax on Integrated

Circuits

United States Notification of mutually agreed solution (10/5)

DS315 European Communities— Selected

Customs Matters

United States Establishment of a panel (3/21)

DS316 European Communities— Measures

Affecting Trade in Large Civil Aircraft

United States Establishment of a panel (7/20) 

Initiation of Annex V factfinding procedure (9/23)

DS317 United States—Measures Affecting Trade

in Large Civil Aircraft

United States Establishment of a panel (7/20) 

Initiation of Annex V factfinding procedure (9/23)

DS320 United States—Continued Suspension of

Obligations in the EC—Hormones

Dispute

EC Establishment of a panel (2/17)

DS322 United States—Measures Relating to

Zeroing and Sunset Reviews

Japan Establishment of a panel (2/28)

DS325 United States—Antidumping

Determinations regarding Stainless Steel

from Mexico

Mexico Request for consultations (1/5)

DS334 Turkey—Measures Affecting the

Importation of Rice

United States Request for consultations (11/2)

DS335 United States—Antidumping Measure on

Shrimp from Ecuador

Ecuador Request for consultations (11/17)

DS338 Canada—Provisional Antidumping and

Countervailing Duties on Grain Corn from

the United States

United States Canada International Trade Tribunal preliminary affirmative

 injury determination (11/15)

Request for consultations (3/17/06)

Preliminary determination reversed by Canadian International 

 Trade Tribunal (4/18/06)

Source: WTO, "Chronological List of Disputes Cases," http://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htm.

a Listed cases include only those in which formal action occurred during 2005. Where appropriate, post-2005 actions are noted to

place the 2005 actions in context.
A-37

Table A-21 NAFTA dispute settlement cases to which the United States was a party, developments in 2005a

Chapter 19 Binational Panel Decisions

File No. Dispute Action (Month/Day) 

USA-MEX-98-1904-02 Gray Portland Cement and

Clinker from Mexico

(Commerce Final Results of

6th Antidumping

Administrative Review)

Panel affirmed in part and remanded in part to

 Commerce (5/26)

Commerce issued final results of redetermination (7/25)

Panel affirmed in part and remanded in part to Commerce

 (11/3)

USA-MEX-2000-1904-10 Gray Portland Cement and

Clinker from Mexico (USITC

Five Year Review)

Supplemental briefing (3/14)

Oral argument held (4/7)

Panel affirmed in part and remanded in part to

 Commission (6/24)

Commission issued remand determination (9/22)

USA-CDA-2000-1904-11 Certain Corrosion-Resistant

Carbon Steel Flat Products

from Canada (USITC Five

Year Review)

Panel affirmed Commission’s determination on remand

 (4/29 and 5/20)

USA-MEX-2001-1904-03 Oil Country Tubular Goods

from Mexico (Commerce

Full Sunset Review of the

Antidumping Duty Order)

Panel affirmed in part and remanded to Commerce (2/11)

Commerce issued redetermination on remand (5/13)

Panel remanded to Commerce (2/8/2006)

USA-MEX-2001-1904-05 Oil Country Tubular Goods

from Mexico (Commerce

Final Results of the 4th

Antidumping Duty

Administrative Review)

Panel constituted (12/2004)

Supplemental briefing (5/13)

Oral argument held (7/20)

Panel affirmed in part and remanded in part to Commerce 

 (1/27/2006)

USA-CDA-2002-1904-02 Certain Softwood Lumber

Products from Canada 

(Commerce Final

Affirmative Antidumping

Determination)

Panel remand to Commerce (6/9)

Commerce issued third determination on remand (7/11)

USA-CDA-2002-1904-03 Certain Softwood Lumber

Products from Canada

(Commerce Final

Affirmative Countervailing

Duty Determination) 

Commerce issued third remand determination (1/24)

Panel remand to Commerce (5/23)

Commerce issued fourth remand determination (7/7)

Panel remand to Commerce (10/5)

Commerce issued fifth remand determination (11/22)

USA-CDA-2002-1904-09 Carbon and Certain Alloy

Steel Wire Rod from

Canada (USITC Final

Injury Determination)

Panel affirmed Commission final determination (4/18)

USA-CDA-2003-1904-02 Alloy Magnesium from

Canada (Commerce Final

Results of Countervailing

Duty New Shipper Review)

Oral argument held (5/6)

Panel affirmed Commerce’s final determination (9/9)
A-38

Table A-21 NAFTA dispute settlement cases to which the United States was a party, developments in

2005a

—Continued

File No. Dispute Action (Month/Day) 

USA-CDA-2003-1904-05 Certain Durum Wheat and

Hard Red Spring Wheat

from Canada (Commerce

Final Affirmative

Countervailing Duty

Determination)

Panel affirmed in part and remanded in part Commerce’s

determination (3/10)

USA-CDA-2003-1904-06 Hard Red Spring Wheat

from Canada (USITC Final

Injury Determination)

Oral argument held (3/9)

Panel affirmed in tart and remanded in part the

 Commission Determination (6/7)

Commission determination on remand (10/5)

Panel affirmed commission remand determination (12/12)

Chapter 19 Extraordinary Challenge Committee Decisions

ECC-2004-1904-01USA Certain Softwood Lumber

Products from Canada

(USITC Final Injury

Determination)

Extraordinary challenge committee affirmed decision of the

 Binational Panel in USA-CDA-2002-1904-07 (8/10)

Source: NAFTA Secretariat, “Status Report NAFTA & FTA Dispute Settlement Proceedings,”

http://www.nafta-sec-alena.org/DefaultSite/index_e.aspx?DetailID=9.

a This list includes only cases in which formal action occurred in 2005; pending cases in which little or no formal

action occurred are omitted. Where appropriate, pre-2005 and post-2005 actions are noted to place the 2005 actions

in context. 
Table A–22 U.S. merchandise trade with European Union,a by SITC codes (revision 3), 2003–05

(1,000 dollars)

SITCCode No. Description 2003 2004 

0 Food and live animals 3,989,868 4,394,230 4

1 Beverages and tobacco 1,364,778 1,438,773 12 Crude materials, inedible, except fuels 5,599,182 5,879,783 6

3 Mineral fuels, lubricants and related materials 1,155,244 2,313,345 24 Animal and vegetable oils, fats and waxes 138,255 125,150 5 Chemicals and related products, n.e.s. 28,064,277 33,752,573 36

6 Manufactured goods classified chiefly by material 8,042,859 8,798,710 107 Machinery and transport equipment 67,326,017 70,993,062 73

8 Miscellaneous manufactured articles 19,161,153 21,931,578 23

9 Commodities and transactions not classified elsewhere in the SITC 6,640,874 6,062,363 7

Total all exports commodities 141,482,506 155,689,567 167

0 Food and live animals 4,311,405 4,472,380 4

1 Beverages and tobacco 6,699,266 7,118,491 72 Crude materials, inedible, except fuels 2,108,331 3,007,050 3

3 Mineral fuels, lubricants and related materials 10,792,343 14,708,721 21

4 Animal and vegetable oils, fats and waxes 583,874 770,651 5 Chemicals and related products, n.e.s. 56,340,653 61,406,473 65

6 Manufactured goods classified chiefly by material 24,416,726 30,053,828 337 Machinery and transport equipment 101,260,693 109,410,500 119

8 Miscellaneous manufactured articles 31,280,457 35,481,518 36

9 Commodities and transactions not classified elsewhere in the SITC 12,630,196 13,329,544 14

Total all imports commodities 250,423,944 279,759,157 307

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s." stands for "not elsewhere specified."

a Includes 25 EU countries 

A-39
Table A–23 Leading U.S. exports to the European Union,a by Schedule B subheading, 2003–05

(1,000 dollars)

Schedule B subheading Description 2003 2004 

8802.40 Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg 6,367,298 7,483,301 8803.30 Parts of airplanes or helicopters, n.e.s.o.i. 4,816,702 5,062,701 3004.90 Certain medicaments put up in measure doses or in forms or packings for retail sale,

 n.e.s.o.i. 4,284,316 5,609,801 

9880.00 Low value export shipments (non-Canadian) 3,532,883 3,816,953 8411.91 Parts for turbojets or turbopropellers 3,250,821 3,538,011 8473.30 Parts and accessories for automated data processing machines and units 4,804,397 3,719,733 3002.10 Antisera and other blood fractions, and modified immunological products 1,838,352 2,517,584 8411.12 Turbojets of a thrust exceeding 25 kN 1,646,462 1,994,111 8703.23 Passenger motor vehicles with spark-ignition internal-combustion reciprocating piston

 engine, cylinder capacity over 1,500 but not over 3,000 cc 2,106,286 2,545,819 

9018.90 Medical, surgical, dental or veterinary sciences instruments, appliances, and parts,

 n.e.s.o.i. 1,712,144 2,051,458 

3822.00 Composite diagnostic or laboratory reagents, except pharmaceuticals 1,653,665 1,830,584 8542.21 Electronic monolithic digital integrated circuits 2,297,896 2,040,439 8517.50 Other apparatus for carrier-current line systems or for digital line systems 728,802 1,255,761 8708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 1,447,224 1,707,827 8411.99 Gas turbines parts, n.e.s.o.i. 1,120,880 1,326,869 9018.39 Medical etc. needles n.e.s.o.i., catheters, cannulae and the like; parts and accessories

 thereof 1,073,438 1,320,021 

9021.90 Appliances n.e.s.o.i., worn, carried, or implanted in the body, to compensate for a

 defect or disability; parts and accessories thereof 1,288,406 1,300,009 

8471.80 Other units of automated data processing machines 1,488,544 1,479,201 8517.90 Parts of telephonic or telegraphic apparatus 948,021 1,135,791 8802.30 Airplanes and aircraft, of an unladen weight over 2,000 kg but not over 15,000 kg 475,259 1,590,613 2701.12 Bituminous coal, whether or not pulverized, but not agglomerated 579,550 685,979 2933.39 Heterocyclic compounds containing an unfused pyridine ring, whether or not

 hydrogenated, in the structure, n.e.s.o.i. 1,117,363 976,157 

8411.82 Gas turbines, except turbojets and turbopropellers, of a power not exceeding 5,000 kW 603,395 647,693 2937.90 Other hormones, their derivatives and structural analogues, including chain modified

 polypeptides, used primarily as hormones, n.e.s.o.i. 539,001 1,639,039 

9801.10 Value of repairs or alterations of previously imported articles, repaired or altered prior

 to exportation from United States 917,864 928,061  Total of items shown 50,638,969 58,203,515 5All other 90,843,538 97,486,053 10 Total of all commodities 141,482,506 155,689,567 16

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or included."

a Includes 25 EU countries.

A-40
Table A–24 Leading U.S. imports from the European Union,a by HTS subheading, 2003–05

(1,000 dollars)

HTS subheading Description 2003 2004 

8703.24 Passenger motor vehicles with spark-ignition internal-combustion reciprocating piston

 engine, cylinder capacity over 3,000 cc 14,463,394 15,401,606 

3004.90 Certain medicaments put up in measure doses or in forms or packings for retail sale,

 n.e.s.o.i. 13,909,768 15,920,585 

8703.23 Passenger motor vehicles with spark-ignition internal-combustion reciprocating piston

 engine, cylinder capacity over 1,500 but not over 3,000 cc 16,700,594 16,482,203 

2710.11 

Light oils and preparations from petroleum oils and oils from bituminous minerals, minimum 70 percent by weight of such products 3,921,397 7,184,306 

9801.00 U.S. articles exported and returned, not advanced or improved in condition; animals

 exported or returned 7,868,215 8,115,917 

2934.99 Nucleic acids and their salts, whether or not chemically defined; other heterocyclic

 compounds, n.e.s.o.i. 6,628,783 6,175,717 

2933.99 Heterocyclic compounds with nitrogen hetero-atom(s) only, n.e.s.o.i. 3,988,035 4,620,593 2710.19 Oils and preparations from petroleum oils and oils from bituminous minerals, minimum

 70 percent by weight of such products, not light 3,244,901 4,067,358 

9999.95 Estimated "low valued" shipments 3,840,018 4,309,156 8411.91 Parts for turbojets or turbopropellers 3,249,413 3,676,624 8802.40 Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg 3,348,542 3,415,654 7102.39 Nonindustrial diamonds, n.e.s.o.i. 2,713,795 2,873,612 9701.10 Paintings, drawings and pastels, executed entirely by hand, framed or not framed 2,200,043 2,865,367 2709.00 Petroleum oils and oils obtained from bituminous minerals, crude 2,023,416 1,668,644 8803.30 Parts of airplanes or helicopters, n.e.s.o.i. 1,715,334 1,774,484 9018.39 Medical etc. needles n.e.s.o.i., catheters, cannulae and the like; parts and

 accessories thereof 1,032,405 2,288,696 

3302.10 Mixtures of odoriferous substances and mixtures with a basis of these substances,

 used in the food or drink industries 930,038 1,666,651 

8708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 1,564,879 1,771,505 8473.30 Parts and accessories for automated data processing machines and units 2,194,068 2,051,797 2204.21 Wine n.e.s.o.i. of fresh grapes or fortified wine, in containers not over 2 liters 1,828,146 1,765,930 3004.39 Medicaments, in measured doses, containing hormones or derivatives/steroids used

 primarily as hormones, but not containing antibiotics, n.e.s.o.i. 1,825,894 1,711,086 

8411.12 Turbojets of a thrust exceeding 25 kN 1,491,987 1,452,077 8525.20 Transmission apparatus incorporating reception apparatus 1,605,177 1,260,093 2933.49 Heterocyclic compounds with nitrogen hetero-atom(s) only, containing a quinoline or

 isoquinoline ring-system, not further fused, n.e.s.o.i. 1,004,369 1,201,253 

2203.00 Beer made from malt 1,298,960 1,299,677 

 Total of items shown 104,591,572 115,020,594 1All other 145,832,372 164,738,563 1 Total of all commodities 250,423,944 279,759,157 3

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or included."

a Includes 25 EU countries.

A-41
Table A-25 U.S. merchandise trade with Canada, by SITC codes (revision 3), 2003-05

(1,000 dollars)

SITCCode No. Description 2003 2004 

0 Food and live animals 8,167,202 8,450,034 9,51 Beverages and tobacco 454,715 472,654 52 Crude materials, inedible, except fuels 4,371,962 4,692,290 5,3

3 Mineral fuels, lubricants and related materials 3,968,800 5,386,048 8,0

4 Animal and vegetable oils, fats and waxes 257,981 288,416 25 Chemicals and related products, n.e.s. 16,990,467 18,820,375 21,1

6 Manufactured goods classified chiefly by material 20,782,720 23,666,717 26,4

7 Machinery and transport equipment 74,275,974 79,502,194 88,5

8 Miscellaneous manufactured articles 15,056,047 16,195,557 17,39 Commodities and transactions not classified elsewhere in the SITC 4,422,738 5,693,605 5,9

Total all exports commodities 148,748,606 163,167,889 183,2

0 Food and live animals 10,961,510 11,909,676 12,81 Beverages and tobacco 889,857 874,250 82 Crude materials, inedible, except fuels 9,733,277 12,835,713 13,33 Mineral fuels, lubricants and related materials 41,268,537 48,825,684 65,34 Animal and vegetable oils, fats and waxes 361,121 480,205 45 Chemicals and related products, n.e.s. 13,495,946 16,640,280 19,76 Manufactured goods classified chiefly by material 33,239,217 39,890,415 43,4

7 Machinery and transport equipment 84,176,846 92,758,904 98,9

8 Miscellaneous manufactured articles 14,580,450 15,658,452 16,29 Commodities and transactions not classified elsewhere in the SITC 15,309,344 15,786,500 16,2

Total all imports commodities 224,016,104 255,660,079 287,5

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s." stands for "not elsewhere specified."

A-42
Table A–26 Leading U.S. exports to Canada, by Schedule B subheading, 2003–05

(1,000 dollars)

Schedule Bsubheading Description 2003 2004 

8703.23 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 1,500 but not over 3,000 cc 5,181,735 5,257,245 

8703.24 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 3,000 cc 5,157,224 4,647,283 

8708.29 Parts and accessories of bodies (including cabs) for motor vehicles, n.e.s.o.i. 5,192,437 5,311,762 

9880.00 Estimate of non-Canadian low value export shipments; compiled low value and

 not identified by kind shipments to Canada 3,538,755 4,509,237 

8708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 3,957,358 4,289,624 

8704.31 Motor vehicles for transporting goods, with spark-ignition internal-combustion

 piston engine, gross vehicle weight not exceeding 5 mt 3,257,471 3,559,046 

8407.34 Reciprocating spark-ignition piston engines, of a cylinder capacity over 1,000 cc 3,705,931 3,400,726 2711.21 Natural gas, gaseous state 1,077,503 1,920,983 8708.40 Gear boxes for motor vehicles 2,096,680 2,495,050 

8542.21 Electronic monolithic digital integrated circuits 792,460 1,094,510 2710.19 Oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products, not light 849,784 1,046,117 

8409.91 Parts for spark-ignition internal-combustion piston engines 1,315,897 1,446,491 8701.20 Road tractors for semi-trailers 1,010,098 1,391,587 3004.90 Certain medicaments put up in measure doses or in forms or packings for retail

 sale, n.e.s.o.i. 1,571,861 1,533,809 

7606.12 Rectangular plates, sheets and strip, over 0.2 mm thick, of aluminum alloy 914,910 1,158,474 

8704.22 Motor vehicles for goods transport n.e.s.o.i., with compression-ignition internal

 combustion piston engine, weighing 5 to 20 metric tons 570,845 825,341 

8473.30 Parts and accessories for automated data processing machines and units 907,139 1,064,572 

8471.50 Digital processing units other than those of 8471.41 and 8471.49 999,760 944,185 

8408.20 Compression-ignition internal-combustion piston engines 470,953 762,950 

2716.00 Electrical energy 715,999 829,021 8708.39 Brakes and servo-brakes and parts for motor 1,074,253 1,073,427 9032.89 Automatic regulating or controlling instruments and apparatus, n.e.s.o.i. 1,077,048 1,030,760 

8802.40 Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg 400,907 470,697 4902.90 Newspapers, etc. appearing less than 4 times per week 750,344 806,784 

9401.90 Parts of seats (except medical, barbers, dentist, etc.) 644,512 855,124 

 Total of items shown 47,231,867 51,724,803 5

All other 101,516,739 111,443,086 12

 Total of all commodities 148,748,606 163,167,889 18

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inclu

A-43
Table A–27 Leading imports from Canada, by HTS subheading, 2003–05

(1,000 dollars)

HTSsubheading Description 2003 2004 

8703.24 Passenger motor vehicles with spark-ignition internal-combustion reciprocating piston

 engine, cylinder capacity over 3,000 cc 26,064,196 30,237,806 

2711.21 Natural gas, gaseous state 18,249,135 19,481,048 2709.00 Petroleum oils and oils obtained from bituminous minerals, crude 14,086,365 18,888,253 9801.00 U.S. articles exported and returned, not advanced or improved in condition; animals

 exported or returned 9,014,921 8,705,325 

8704.31 Motor vehicles for transporting goods, with spark-ignition internal-combustion piston engine,

 gross vehicle weight not exceeding 5 mt 7,959,664 7,497,576 

4407.10 Coniferous wood sawn or chipped lengthwise, sliced or peeled, of thickness exceeding 6mm 4,570,189 6,688,903 

8708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 4,329,341 4,768,895 8703.23 Passenger motor vehicles with spark-ignition internal-combustion reciprocating piston

 engine, cylinder capacity over 1,500 but not over 3,000 cc 4,391,893 5,564,836 

9999.95 Estimated "low valued" shipments 3,809,534 4,344,464 2710.19 Oils and preparations from petroleum oils and oils from bituminous minerals, minimum 70

 percent by weight of such products, not light 2,571,747 3,143,668 

2710.11 Light oils and preparations from petroleum oils and oils from bituminous minerals, minimum

 70 percent by weight of such products 2,558,353 3,165,699 

8708.29 Parts and accessories of bodies (including cabs) for motor vehicles, n.e.s.o.i. 3,297,211 3,160,575 

8407.34 Reciprocating spark-ignition piston engines, of a cylinder capacity over 1,000 cc 2,393,861 2,876,928 4801.00 Newsprint, in rolls or sheets 2,906,964 2,874,785 2716.00 Electrical energy 1,381,659 1,261,442 8802.40 Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg 2,044,189 1,739,660 4802.61 Uncoated paper/paperboard for writing/printing/other graphic purposes n.e.s.o.i., over 10

 percent fiber by mechanical process, in rolls 1,560,852 1,964,179 

8802.30 Airplanes and aircraft, of an unladen weight over 2,000 kg but not over 15,000 kg 3,161,004 2,232,172 7601.20 Unwrought aluminum alloys 1,467,165 1,766,921 3004.90 Certain medicaments put up in measure doses or in forms or packings for retail sale,

 n.e.s.o.i. 1,322,606 1,552,459 

7601.10 Aluminum, not alloyed, unwrought 1,259,320 1,351,748 4703.21 Chemical woodpulp, soda or sulfate, other than dissolving grades, semibleached or

 bleached, coniferous wood 1,399,435 1,682,332 

2711.12 Propane, liquefied 1,329,489 1,377,993 8701.20 Road tractors for semi-trailers 705,021 1,045,986 4410.21 Oriented strand board and waferboard, of wood, unworked or not further worked than

 sanded 953,221 1,512,389 

 Total of items shown 122,787,335 138,886,040 1All other 101,228,770 116,774,039 1 Total of all commodities 224,016,104 255,660,079 2

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or included."

A-44
Table A–28 U.S. merchandise trade with China, by SITC codes (revision 3), 2003–05

(1,000 dollars)

SITCCode No.

Description

2003 2004 

0 Food and live animals 790,805 1,303,938 1,1

1 Beverages and tobacco 11,488 35,506 2 Crude materials, inedible, except fuels 6,726,992 7,931,789 9,6

3 Mineral fuels, lubricants and related materials 129,627 220,952 1

4 Animal and vegetable oils, fats and waxes 102,630 34,393 5 Chemicals and related products, n.e.s. 3,561,020 4,666,949 5,36 Manufactured goods classified chiefly by material 1,933,410 2,124,827 3,0

7 Machinery and transport equipment 11,289,215 13,440,422 16,3

8 Miscellaneous manufactured articles 1,894,113 2,499,787 2,89 Commodities and transactions not classified elsewhere in the SITC 267,637 347,721 3

Total all exports commodities 26,706,938 32,606,283 38,8

0 Food and live animals 1,995,720 2,338,365 2,71 Beverages and tobacco 31,721 40,307 2 Crude materials, inedible, except fuels 773,219 1,043,298 1,3

3 Mineral fuels, lubricants and related materials 456,724 985,382 94 Animal and vegetable oils, fats and waxes 9,456 12,368 5 Chemicals and related products, n.e.s. 2,984,683 3,732,060 5,16 Manufactured goods classified chiefly by material 16,161,703 21,872,164 28,0

7 Machinery and transport equipment 60,478,484 86,401,526 108,9

8 Miscellaneous manufactured articles 66,917,133 77,376,206 92,49 Commodities and transactions not classified elsewhere in the SITC 1,811,300 2,357,838 2,8

Total all imports commodities 151,620,144 196,159,513 242,6

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s." stands for "not elsewhere specified."

A-45
Table A–29 Leading U.S. exports to China, by Schedule B subheading, 2003–05

(1,000 dollars)

Schedule Bsubheading

Description

2003 2004 

8802.40 Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg 2,167,638 1,614,676 

1201.00 Soybeans, whether or not broken 2,830,335 2,328,762 8542.21 Electronic monolithic digital integrated circuits 1,556,009 1,666,867 5201.00 Cotton, not carded or combed 733,080 1,406,669 7602.00 Aluminum waste and scrap 234,219 320,833 7404.00 Copper waste and scrap 407,516 477,013 8473.30 Parts and accessories for automated data processing machines and units 418,071 460,226 7204.49 Ferrous waste and scrap, n.e.s.o.i. 365,318 456,008 8803.30 Parts of airplanes or helicopters, n.e.s.o.i. 265,611 308,124 

4101.50 Whole raw bovine or equine hides and skins, weight exceeding 16 kg, fresh,

 pickled or preserved but not tanned or further prepared 304,037 381,839 

8112.92 Unwrought gallium, hafnium, indium, niobium, or rhenium and powders thereof 11,302 45,766 

3100.00 Fertilizers 457,034 311,266 4707.10 Waste and scrap of unbleached kraft paper or paperboard or of corrugated paper

 or paperboard 178,948 212,916 

8542.29 Electronic monolithic integrated circuits, other than digital 182,763 284,478 

7204.29 Waste and scrap, of non-stainless alloy steel 171,509 198,652 

8479.89 Machines and mechanical appliances having individual functions, n.e.s.o.i. 291,403 535,732 

8708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 263,178 291,145 

9880.00 Estimate of non-Canadian low value export shipments; compiled low value and

 not identified by kind shipments to Canada 166,611 221,087 

8517.90 Parts of telephonic or telegraphic apparatus 176,226 260,579 7204.21 Waste and scrap, of stainless steel 64,486 157,425 3907.40 Polycarbonates, in primary forms 125,634 157,209 2905.31 Ethylene glycol (ethanediol) 108,634 186,472 5502.00 Artificial filament tow 107,040 163,640 8517.50 Other apparatus for carrier-current line systems or for digital line systems 133,299 138,151 3902.10 Polypropylene, in primary forms 121,997 158,716 

 Total of items shown 11,841,900 12,744,250 1

All other 14,865,038 19,862,033 2

 Total of all commodities 26,706,938 32,606,283 3

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inclu

A-46
Table A–30 Leading U.S. imports from China, by HTS subheading, 2003–05

(1,000 dollars)

Schedule Bsubheading

Description

2003 2004 

8471.60 Input or output units for automated data processing machines 7,275,003 11,016,763 1

8471.30 Portable digital automated data processing machines not exceeding 10 kg, with

 at least a CPU, keyboard and display 4,158,253 7,715,796 1

8473.30 Parts and accessories for automated data processing machines and units 6,075,213 8,648,661 

8525.20 Transmission apparatus incorporating reception apparatus 2,875,724 5,543,066 

6403.99 Footwear not covering the ankles, with outer soles of rubber or plastics or

 composition leather and uppers of leather 4,620,638 4,862,980 

8520.90 Other sound recording or reproducing equipment, n.e.s.o.i. 286,459 1,410,090 8521.90 Video recording or reproducing apparatus, whether or not including a video

 tuner, other than magnetic tape-type 2,463,196 3,017,130 

6402.99 Footwear with outer soles and uppers of rubber or plastics n.e.s.o.i. 2,167,679 2,311,944 

9403.60 Wooden furniture, other than of a kind used in the bedroom 1,868,817 2,293,291 

8525.40 Still image video cameras and other video camera recorders 1,379,631 2,163,247 9503.90 Other toys and models, n.e.s.o.i. 2,437,545 2,376,812 9504.10 Video games used with television receiver and parts and accessories 2,108,226 1,958,229 

8471.70 Automatic data processing storage units 1,721,964 2,120,053 9504.90 Game machines except coin-operated; board games; mah-jog; dominoes; dice 1,408,447 1,795,482 

8528.12 Incomplete or unfinished color reception apparatus for televisions 782,028 1,001,067 

8471.49 Other digital automated data processing machines, entered in the form of

 systems 270,345 874,471 

9999.95 Estimated "low valued" shipments 1,229,871 1,652,271 8504.40 Static converters 1,299,404 1,695,118 8528.21 Video monitors, color 357,812 710,557 9505.10 Articles for Christmas festivities and parts and accessories thereof 1,724,489 1,825,413 4202.92 Trunks, cases, bags and similar containers, with outer surface of plastic sheeting

 or of textile materials 1,331,661 1,609,091 

9403.20 Metal furniture, other than of a kind used in offices 1,278,779 1,453,558 

8472.90 Automatic banknote dispensers, coin-sorting, pencil-sharpening, perforating or

 stapling, and other office machines, n.e.s.o.i. 1,256,808 1,398,126 

8471.80 Other units of automated data processing machines 625,884 1,249,163 

6403.91 Footwear covering the ankles, with outer soles and uppers of rubber or plastics,

 excluding waterproof footwear 1,466,649 1,608,406 

 Total of items shown 52,470,524 72,310,786 8

All other 99,149,620 123,848,728 15

 Total of all commodities 151,620,144 196,159,513 24

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inclu

A-47
Table A–31 U.S. merchandise trade with Mexico, by SITC codes (revision 3), 2003–05

(1,000 dollars)

SITCCode No. Description 2003 2004 

0 Food and live animals 5,355,649 5,882,117 6,61 Beverages and tobacco 106,655 109,898 12 Crude materials, inedible, except fuels 3,350,363 3,583,687 3,9

3 Mineral fuels, lubricants and related materials 2,827,585 3,231,745 5,3

4 Animal and vegetable oils, fats and waxes 372,564 489,354 45 Chemicals and related products, n.e.s. 9,544,166 11,777,129 13,7

6 Manufactured goods classified chiefly by material 12,288,490 14,618,422 16,2

7 Machinery and transport equipment 35,808,119 39,725,284 41,3

8 Miscellaneous manufactured articles 9,781,618 9,660,912 9,79 Commodities and transactions not classified elsewhere in the SITC 3,672,889 3,939,156 4,0

Total all exports commodities 83,108,096 93,017,703 101,6

0 Food and live animals 5,247,899 6,116,690 6,91 Beverages and tobacco 1,738,693 1,813,501 2,0

2 Crude materials, inedible, except fuels 782,920 1,000,217 1,2

3 Mineral fuels, lubricants and related materials 14,746,109 18,924,398 24,94 Animal and vegetable oils, fats and waxes 26,406 33,773 5 Chemicals and related products, n.e.s. 2,235,183 2,911,222 3,36 Manufactured goods classified chiefly by material 9,459,428 12,106,713 13,7

7 Machinery and transport equipment 75,681,179 83,717,657 88,3

8 Miscellaneous manufactured articles 21,295,025 21,707,996 21,79 Commodities and transactions not classified elsewhere in the SITC 5,986,412 6,626,603 6,7

Total all imports commodities 137,199,254 154,958,771 169,2

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s." stands for "not elsewhere specified."

A-48
Table A–32 Leading U.S. exports to Mexico, by Schedule B subheading, 2003–05

(1,000 dollars)

Schedule Bsubheading Description 2003 2004 

9880.00 Low value export shipments (non-Canadian) 3,003,106 3,347,992 

2710.11 Light oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products 1,550,647 2,124,858 

8708.29 Parts and accessories of bodies (including cabs) for motor vehicles, n.e.s.o.i. 2,030,302 2,106,568 

8703.24 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cyl capacity over 3,000 cc 1,189,891 1,637,777 

8708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 1,622,317 1,863,393 

8408.20 Compression-ignition internal-combustion piston engines 1,052,566 1,496,783 

3926.90 Articles of plastics and articles of other materials of headings 3901 to 3914,

 n.e.s.o.i. 1,394,885 1,456,909 

8538.90 Parts for electrical apparatus for electrical circuits; for electrical control n.e.s.o.i. 953,621 1,206,238 2710.19 Oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products, not light 597,869 481,423 

8703.23 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 1,500 but not over 3,000 cc 1,065,094 1,037,171 

8536.90 Electrical apparatus for switching or protecting electrical circuits, n.e.s.o.i. 833,699 978,299 

8473.30 Parts and accessories for automated data processing machines and units 1,090,401 1,072,728 

8542.21 Electronic monolithic digital integrated circuits 813,480 822,927 7326.90 Articles of iron or steel n.e.s.o.i. 726,397 766,680 8704.31 Motor vehicles for transporting goods, with spark-ignition internal-combustion

 piston engine, gross vehicle weight not exceeding 5 mt 680,201 869,623 

1201.00 Soybeans, whether or not broken 990,093 784,919 8529.90 Parts, except antennas, for transmission, radar, radio, television, etc., n.e.s.o.i. 579,350 788,898 3923.10 Boxes, cases, crates and similar articles, of plastics 587,198 628,476 8542.29 Electronic monolithic integrated circuits, other than digital 661,835 782,914 1005.90 Corn (maize), other than seed 660,959 683,694 3902.10 Polypropylene, in primary forms 319,487 411,329 8414.90 Parts for air or vacuum pumps, air or other gas compressors/fans, and ventilating

 or recycling hoods incorporating a fan 288,446 397,005 

4819.10 Cartons, boxes and cases corrugated paper and paperboard 522,806 581,766 8503.00 Parts of electric motors, generators and sets 540,426 559,752 8544.49 Insulated electric conductors, for a voltage not exceeding 80 volts, not fitted with

 connectors, n.e.s.o.i. 400,411 434,710 

 Total of items shown 24,155,488 27,322,832 3

All other 58,952,608 65,694,872 7

 Total of all commodities 83,108,096 93,017,703 10

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inclu

A-49
Table A–33 Leading U.S. imports from Mexico, by HTS subheading, 2003–05

(1,000 dollars)

HTSsubheading Description 2003 2004 2709.00 Petroleum oils and oils obtained from bituminous minerals, crude 13,629,630 17,186,105 28528.12 Incomplete or unfinished color reception apparatus for televisions 5,202,728 7,270,548 

8703.23 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 1,500 but not over 3,000 cc 5,619,590 5,347,834 

8544.30 Insulated ignition wiring sets and other wiring sets of a kind used in vehicles,

 aircraft or ships 4,220,588 4,153,783 

9801.00 U.S. articles exported and returned, not advanced or improved in condition;

 animals exported or returned 3,953,642 4,257,519 

8471.50 Digital processing units other than those of 8471.41 and 8471.49 3,198,490 4,253,867 

8703.24 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 3,000 cc 5,837,537 5,580,421 

8704.21 Trucks, n.e.s.o.i., diesel engine, gross vehicle weight not exceeding 5 mt 2,781,912 3,417,792 8704.31 Motor vehicles for transporting goods, with spark-ignition internal-combustion

piston engine, gross vehicle weight not exceeding 5 mt 3,652,196 2,822,123 

9401.90 Parts of seats (except medical, barbers, dentist, etc.) 3,172,250 3,095,072 8708.29 Parts and accessories of bodies (including cabs) for motor vehicles, n.e.s.o.i. 1,826,850 2,228,682 8708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 1,745,652 2,032,188 

8525.20 Transmission apparatus incorporating reception apparatus 1,463,742 2,074,212 

9999.95 Estimated "low valued" shipments 1,558,083 1,776,065 8407.34 Reciprocating spark-ignition piston engines, of a cylinder capacity over 1,000 cc 1,354,805 1,779,050 

6203.42 Men's or boys' trousers, bib and brace overalls, breeches and shorts not knitted

 or crocheted, of cotton 1,481,010 1,442,601 

8537.10 Boards, panels, consoles, other components incorporating apparatus for control

 or distribution of electricity, for voltage not exceeding 1,000 volts 1,437,350 1,420,425 

2710.11 Light oils and preparations from petroleum oils and oils from bituminous

 minerals, minimum 70 percent by weight of such products 650,443 995,897 

2203.00 Beer made from malt 1,067,879 1,163,408 

8527.21 Radio broadcast receivers for motor vehicles 1,436,115 1,334,202 9018.90 Medical, surgical, dental or veterinary sciences instruments, appliances, and

 parts, n.e.s.o.i. 1,096,934 1,218,264 

8409.91 Parts for spark-ignition internal-combustion piston engines 881,083 1,174,384 

8473.30 Parts and accessories for automated data processing machines and units 1,258,548 1,148,517 

8529.90 Parts, except antennas, for transmission, radar, radio, television, etc., n.e.s.o.i. 631,210 1,239,133 

8517.50 Other apparatus for carrier-current line systems or for digital line systems 1,566,000 1,664,472 

 Total of items shown 70,724,267 80,076,563 8

 All other 66,474,987 74,882,208 8

 Total of all commodities 137,199,254 154,958,771 16

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inclu

A-50
Table A–34 U.S. merchandise trade with Japan, by SITC codes (revision 3), 2003–05

(1,000 dollars)

SITCCode No.

Description

2003 2004 

0 Food and live animals 8,018,240 7,341,523 7,41 Beverages and tobacco 1,344,165 1,290,983 1,22 Crude materials, inedible, except fuels 2,913,597 3,033,508 2,8

3 Mineral fuels, lubricants and related materials 582,076 890,923 64 Animal and vegetable oils, fats and waxes 69,598 75,097 5 Chemicals and related products, n.e.s. 6,614,001 7,466,115 7,96 Manufactured goods classified chiefly by material 2,329,240 2,577,212 2,8

7 Machinery and transport equipment 18,401,743 18,708,425 18,7

8 Miscellaneous manufactured articles 7,197,891 7,524,430 7,99 Commodities and transactions not classified elsewhere in the SITC 1,391,601 1,584,545 1,7

Total all exports commodities 48,862,153 50,492,760 51,4

0 Food and live animals 363,891 381,878 41 Beverages and tobacco 58,808 56,467 2 Crude materials, inedible, except fuels 233,239 282,715 33 Mineral fuels, lubricants and related materials 209,700 206,614 54 Animal and vegetable oils, fats and waxes 23,682 25,654 5 Chemicals and related products, n.e.s. 7,933,164 8,186,376 8,26 Manufactured goods classified chiefly by material 6,582,939 7,508,907 7,9

7 Machinery and transport equipment 89,238,622 97,605,383 104,2

8 Miscellaneous manufactured articles 10,211,700 11,394,373 11,89 Commodities and transactions not classified elsewhere in the SITC 3,629,310 3,886,333 4,1

Total all imports commodities 118,485,056 129,534,698 137,8

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s." stands for "not elsewhere specified."

A-51
Table A–35 Leading U.S. exports to Japan, by Schedule B subheading, 2003–05

(1,000 dollars)

Schedule Bsubheading

Description

2003 2004 

8802.40 Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg 2,585,362 2,875,057 

8803.30 Parts of airplanes or helicopters, n.e.s.o.i. 1,844,288 1,495,000 1005.90 Corn (maize), other than seed 1,599,289 1,888,811 

9801.10 Value of repairs or alterations of previously imported articles, repaired or altered

 prior to exportation from United States 713,690 927,943 

2402.20 Cigarettes containing tobacco 928,838 869,520 1201.00 Soybeans, whether or not broken 957,493 1,010,560 

8411.91 Parts for turbojets or turbopropellers 596,764 726,190 

8542.21 Electronic monolithic digital integrated circuits 1,421,596 1,005,774 8473.30 Parts and accessories for automated data processing machines and units 801,109 744,477 9880.00 Low value export shipments (non-Canadian) 550,423 563,820 3004.90 Certain medicaments put up in measure doses or in forms or packings for retail

 sale, n.e.s.o.i. 241,070 358,927 

8479.89 Machines and mechanical appliances having individual functions, n.e.s.o.i. 573,694 703,468 9018.90 Medical, surgical, dental or veterinary sciences instruments, appliances, and

 parts, n.e.s.o.i. 466,013 473,980 

1001.90 Wheat and meslin, excluding durum wheat 478,270 524,803 0203.19 Meat of swine, n.e.s.o.i, fresh or chilled 387,219 456,642 9018.39 Medical etc. needles n.e.s.o.i., catheters, cannulae and the like; parts and

 accessories thereof 527,668 530,379 

4403.20 Coniferous wood in the rough, not treated 427,699 499,041 

2844.20 Uranium and its compounds enriched in u235; plutonium and its compounds 783,288 685,808 3822.00 Composite diagnostic or laboratory reagents, except pharmaceuticals 376,082 432,690 

2804.61 Silicon, containing by weight not less than 99.99 percent of silicon 185,710 231,327 

8708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 613,488 551,770 8543.89 Electrical machines and apparatus, having individual functions, n.e.s.o.i. 162,322 362,866 9018.19 Electro-diagnostic apparatus n.e.s.o.i., and parts 281,260 331,132 

8456.91 Machine tools n.e.s.o.i. for dry etching patterns on semiconductor materials 117,634 344,338 0203.29 Meat of swine, n.e.s.o.i., frozen 242,782 322,734 

 Total of items shown 17,863,052 18,917,056 1

All other 30,999,101 31,575,704 3

 Total of all commodities 48,862,153 50,492,760 5

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inclu

A-52
Table A–36 Leading U.S. imports from Japan, by HTS subheading, 2003–05

(1,000 dollars)

HTSsubheading Description 2003 2004 

8703.24 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 3,000 cc 15,729,733 18,447,784 

8703.23 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 1,500 but not over 3,000 cc 15,203,935 11,229,201 

8473.30 Parts and accessories for automated data processing machines and units 3,491,260 3,534,393 8703.22 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine over 1,000 but over 1,500 cc 1,191,134 2,381,704 

8525.40 Still image video cameras and other video camera recorders 3,365,198 3,364,356 8708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 2,598,681 3,006,905 8708.40 Gear boxes for motor vehicles 2,031,014 2,857,625 9801.00 U.S. articles exported and returned, not advanced or improved in condition;

 animals exported or returned 2,245,718 2,407,331 

8429.52 Self-propelled mechanical shovels and excavators, with a 360-degree revolving

 superstructure 928,009 1,482,360 

9999.95 Estimated "low valued" shipments 1,317,317 1,424,542 8409.91 Parts for spark-ignition internal-combustion piston engines 1,129,966 1,263,704 3004.90 Certain medicaments put up in measure doses or in forms or packings for retail

 sale, n.e.s.o.i. 1,324,876 1,313,027 

8542.21 Electronic monolithic digital integrated circuits 1,306,104 1,454,984 8473.40 Parts and accessories for duplicating, addressing, stapling, and other office

 machines, n.e.s.o.i. 874,451 1,156,316 

9504.90 Game machines except coin-operated; board games; mah-jog; dominoes; dice 446,847 424,054 8528.12 Incomplete or unfinished color reception apparatus for televisions 738,143 1,089,239 8701.90 Tractors, n.e.s.o.i. 740,766 999,388 8407.34 Reciprocating spark-ignition piston engines, of a cylinder capacity over 1,000 cc 1,209,652 950,113 8471.60 Input or output units for automated data processing machines 1,375,114 1,313,768 8803.30 Parts of airplanes or helicopters, n.e.s.o.i. 841,011 863,488 8472.90 Automatic banknote dispensers, coin-sorting, pencil-sharpening, perforating or

 stapling, and other office machines, n.e.s.o.i. 881,231 1,082,042 

8711.40 Motorcycles and cycles with auxiliary motor, with reciprocating internal

 combustion piston engine, cylinder capacity 500 to 800 cc 628,785 699,640 

8708.29 Parts and accessories of bodies (including cabs) for motor vehicles, n.e.s.o.i. 911,147 894,297 

8407.21 Outboard motors for marine propulsion 673,473 742,547 8711.50 Motorcycles and cycles, with an auxiliary motor, with a reciprocating internal

 combustion piston engine, cylinder capacity over 800 cc 561,871 786,265 

 Total of items shown 61,745,436 65,169,072 

All other 56,739,620 64,365,626  Total of all commodities 118,485,056 129,534,698 1

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

Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or included."

A-53
Table A–37 U.S. merchandise trade with Taiwan, by SITC codes (revision 3), 2003–05

(1,000 dollars)

SITC Code No. Description 2003 2004 

0 Food and live animals 1,282,519 1,419,860 1,501 Beverages and tobacco 75,513 64,794 72 Crude materials, inedible, except fuels 1,129,097 1,097,461 1,3

3 Mineral fuels, lubricants and related materials 91,869 117,137 54 Animal and vegetable oils, fats and waxes 18,306 7,477 5 Chemicals and related products, n.e.s. 2,474,515 3,484,875 2,896 Manufactured goods classified chiefly by material 882,954 917,210 987 Machinery and transport equipment 8,080,104 10,164,562 10,8

8 Miscellaneous manufactured articles 1,765,622 2,697,632 2,46

9 Commodities and transactions not classified elsewhere in the SITC 310,087 371,667 4

Total all exports commodities 16,110,588 20,342,675 20,52

0 Food and live animals 235,053 254,641 251 Beverages and tobacco 9,958 10,351 2 Crude materials, inedible, except fuels 123,678 154,508 183 Mineral fuels, lubricants and related materials 89,645 287,345 334 Animal and vegetable oils, fats and waxes 4,350 5,289 5 Chemicals and related products, n.e.s. 702,087 812,122 1,06 Manufactured goods classified chiefly by material 4,230,633 5,418,881 5,46

7 Machinery and transport equipment 18,851,290 20,208,848 20,07

8 Miscellaneous manufactured articles 6,245,621 6,327,104 6,19 Commodities and transactions not classified elsewhere in the SITC 997,351 982,874 1,1

Total all imports commodities 31,489,663 34,461,963 34,57

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s." stands for "not elsewhere specified."

A-54
Table A–38 Leading U.S. exports to Taiwan, by Schedule B subheading, 2003–05

(1,000 dollars)

Schedule Bsubheading Description 2003 2004 

8542.21 Electronic monolithic digital integrated circuits 2,258,464 1,722,179 8802.40 Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg 682,378 892,991 8479.89 Machines and mechanical appliances having individual functions, n.e.s.o.i. 445,455 986,706 

8542.29 Electronic monolithic integrated circuits, other than digital 859,551 1,015,892 1005.90 Corn (maize), other than seed 511,763 593,780 

8803.30 Parts of airplanes or helicopters, n.e.s.o.i. 358,713 403,701 1201.00 Soybeans, whether or not broken 419,314 302,034 8456.91 Machine tools n.e.s.o.i. for dry etching patterns on semiconductor materials 124,550 499,987 9031.41 Optical instruments for inspecting semiconductor wafers or devices, or

 photo masks or reticles used in manufacturing these items 136,140 415,132 

8479.90 Parts of machines and mechanical appliances having individual functions,

 n.e.s.o.i. 121,671 266,186 

9030.82 Other instruments and apparatus for measuring or checking semiconductor

 wafers or devices 246,042 460,131 

9880.00 Low value export shipments (non-Canadian) 198,169 253,186 9001.90 Lenses, except contact and spectacle, prisms, mirrors and other optical elements,

 unmounted, other than of glass not optically worked 116,201 147,451 

2902.43 Para-xylene 130,369 194,558 

8475.90 Parts of machines for assembling electric/electronic lamps, tubes or flashbulbs, in

 glass envelopes, for manufacturing or hot working glass 12,027 65,841 

8473.30 Parts and accessories for automated data processing machines and units 235,116 220,531 7003.19 Cast glass and rolled glass, in nonwired sheets, not body tinted, opacified,

 flashed, nor having an absorbent or reflecting layer 154,342 110,506 

2926.10 Acrylonitrile 87,393 192,248 1001.90 Wheat and meslin, excluding durum wheat 136,371 188,511 8543.89 Electrical machines and apparatus, having individual functions, n.e.s.o.i. 88,031 306,855 5201.00 Cotton, not carded or combed 117,023 142,805 8710.00 Tanks and other armored fighting vehicles, motorized, whether or not fitted with

 weapons, and parts of such vehicles 33,527 53,460 

8464.20 Grinding or polishing machines for working stone, ceramics, concrete,

 asbestos-cement or like mineral materials or for cold working glass 68,521 185,517 

2902.50 Styrene (vinylbenzene; phenylethylene) 40,035 197,587 8419.89 Machinery, plant or laboratory equipment, for the treatment of material involving

 temperature change, not for domestic purposes, n.e.s.o.i. 12,422 43,331  Total of items shown 7,593,586 9,861,103 

All other 8,517,002 10,481,572  Total of all commodities 16,110,588 20,342,675 

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or included."

A-55
Table A–39 Leading U.S. imports from Taiwan, by HTS subheading, 2003–05

(1,000 dollars)

HTSsubheading Description 2003 2004 8542.21 Electronic monolithic digital integrated circuits

1,924,768 2,387,572 

8473.30 Parts and accessories for automated data processing machines and units 2,279,611 2,630,972 

8523.90 Prepared magnetic media for sound or similar recording, unrecorded, n.e.s.o.i. 902,971 1,036,280 

8528.12 Incomplete or unfinished color reception apparatus for televisions 219,628 614,222 

8542.29 Electronic monolithic integrated circuits, other than digital 841,171 1,049,912 

8525.20 Transmission apparatus incorporating reception apparatus 115,138 253,024 

8471.80 Other units of automated data processing machines 1,061,791 972,174 

9801.00 U.S. articles exported and returned, not advanced or improved in condition;

 animals exported or returned 594,438 541,589 

8471.60 Input or output units for automated data processing machines 846,750 740,815 8526.91 Radio navigational aid apparatus 286,628 336,244 7318.15 Threaded screws and bolts, of iron or steel, n.e.s.o.i., whether or not with their

 nuts or washers 306,812 415,440 

9999.95 Estimated "low valued" shipments 384,843 425,034 

7318.14 Self-tapping screws of iron or steel 304,022 366,679 

8471.30 Portable digital automated data processing machines not exceeding 10 kg, with at

 least a CPU, keyboard and display 2,165,675 1,243,289 

8534.00 Printed circuits 350,584 410,154 8528.21 Video monitors, color 137,509 153,854 8708.29 Parts and accessories of bodies (including cabs) for motor vehicles, n.e.s.o.i. 246,912 289,279 

8504.40 Static converters 239,441 294,554 8512.20 Electrical lighting or visual signaling equipment, for use on cycles or motor

 vehicles, except for use on bicycles 232,628 281,756 

9506.91 Gymnasium, playground or other exercise articles and equipment; parts and

 accessories thereof 254,856 266,287 

8712.00 Bicycles and other cycles (including delivery tricycles), not motorized 170,124 200,755 8481.80 Taps, cocks, valves and similar appliances, n.e.s.o.i. 256,816 285,389 

8708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 173,150 238,967 7318.16 Nuts, threaded, of iron or steel 191,550 242,728 

8528.30 Video projectors 151,032 342,258 

 Total of items shown 14,638,847 16,019,230 1

All other 16,850,816 18,442,733 1

 Total of all commodities 31,489,663 34,461,963 3

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inclu

A-56
Table A–40 U.S. merchandise trade with Korea, by SITC codes (revision 3), 2003–05

(1,000 dollars)

SITCCode No.

Description

2003 2004 

0 Food and live animals 2,232,449 1,864,871 1,71 Beverages and tobacco 91,026 59,116 2 Crude materials, inedible, except fuels 1,972,313 2,200,541 2,0

3 Mineral fuels, lubricants and related materials 318,318 436,767 54 Animal and vegetable oils, fats and waxes 46,044 27,398 5 Chemicals and related products, n.e.s. 3,333,499 4,458,716 4,36 Manufactured goods classified chiefly by material 986,691 1,102,452 1,07 Machinery and transport equipment 11,177,486 11,897,899 13,1

8 Miscellaneous manufactured articles 1,947,944 2,547,989 2,8

9 Commodities and transactions not classified elsewhere in the SITC 418,929 398,729 4

Total all exports commodities 22,524,700 24,994,480 26,2

0 Food and live animals 189,010 206,467 21 Beverages and tobacco 52,783 64,715 2 Crude materials, inedible, except fuels 218,392 245,658 33 Mineral fuels, lubricants and related materials 280,880 549,354 1,14 Animal and vegetable oils, fats and waxes 872 443 5 Chemicals and related products, n.e.s. 897,719 1,194,069 1,7

6 Manufactured goods classified chiefly by material 3,278,754 4,172,082 4,8

7 Machinery and transport equipment 27,818,955 34,241,539 31,0

8 Miscellaneous manufactured articles 3,476,707 3,528,613 2,8

9 Commodities and transactions not classified elsewhere in the SITC 715,499 861,238 8

Total all imports commodities 36,929,570 45,064,177 43,1

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s." stands for "not elsewhere specified."

A-57
Table A–41 Leading U.S. exports to Korea, by Schedule B subheading, 2003–05

(1,000 dollars)

Schedule Bsubheading Description 2003 2004 

8542.21 Electronic monolithic digital integrated circuits 3,297,215 2,868,416 

8802.40 Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg 1,073,863 1,129,467 

8479.89 Machines and mechanical appliances having individual functions, n.e.s.o.i. 424,542 692,464 

8456.91 Machine tools n.e.s.o.i. for dry etching patterns on semiconductor materials 56,368 325,116 8542.29 Electronic monolithic integrated circuits, other than digital 430,066 765,654 8803.30 Parts of airplanes or helicopters, n.e.s.o.i. 351,540 401,350 

2926.10 Acrylonitrile 273,117 496,546 9001.90 Lenses, except contact and spectacle, prisms, mirrors and other optical elements,

 unmounted, other than of glass not optically worked 142,594 253,306 

2902.43 Para-xylene 90,989 236,526 

9880.00 Low value export shipments (non-Canadian) 215,880 237,990 4101.50 Whole raw bovine or equine hides and skins, weight exceeding 16 kilograms,

 fresh, pickled or preserved but not tanned or further prepared 288,304 257,645 

1005.90 Corn (maize), other than seed 44,377 544,707 8411.91 Parts for turbojets or turbopropellers 131,945 170,342 

8708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 101,964 231,965 8542.10 Cards incorporating an electronic integrated circuit ("smart" cards) 44,090 92,264 8411.12 Turbojets of a thrust exceeding 25 kN 20,012 101,286 1201.00 Soybeans, whether or not broken 282,550 284,594 2902.30 Toluene 99,368 237,015 7204.49 Ferrous waste and scrap, n.e.s.o.i. 250,403 347,375 

2902.50 Styrene (vinylbenzene; phenylethylene) 99,977 222,581 9030.82 Other instruments and apparatus for measuring or checking semiconductor

 wafers or devices 45,277 191,331 

1001.90 Wheat and meslin, excluding durum wheat 207,642 230,934 

2710.19 Oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products, not light 32,114 51,921 

8543.11 Ion implanters for doping semiconductor materials 97,923 130,935 3100.00 Fertilizers 117,350 125,456 

 Total of items shown 8,219,469 10,627,185 1

All other 14,305,231 14,367,295 1

 Total of all commodities 22,524,700 24,994,480 2

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inclu

A-58
Table A–42 Leading U.S. imports from Korea, by HTS subheading, 2003–05

(1,000 dollars)

HTSsubheading Description 2003 2004 

8703.23 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 1,500 but not over 3,000 cc 5,418,198 7,093,612 

8525.20 Transmission apparatus incorporating reception apparatus 5,582,714 8,035,760 

8703.24 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 3,000 cc 1,718,135 2,457,285 

8542.21 Electronic monolithic digital integrated circuits 2,782,309 3,182,640 

8473.30 Parts and accessories for automated data processing machines and units 1,490,724 2,113,138 

2710.19 Oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products, not light 157,251 388,697 

8471.60 Input or output units for automated data processing machines 998,497 1,002,121 

9801.00 U.S. articles exported and returned, not advanced or improved in condition;

 animals exported or returned 512,378 613,170 

8708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 205,108 332,260 

8528.12 Incomplete or unfinished color reception apparatus for televisions 521,699 712,466 

8905.20 Floating or submersible drilling or production platforms 328,780 0 8529.90 Parts, except antennas, for transmission, radar, radio, television, etc., n.e.s.o.i. 221,071 479,715 4011.10 New pneumatic tires, of rubber, of a kind used on motor cars, including station

 wagons and racing cars 279,674 380,059 

8542.29 Electronic monolithic integrated circuits, other than digital 443,380 552,344 8429.52 Self-propelled mechanical shovels and excavators, with a 360-degree revolving

 superstructure 96,656 260,252 

8418.10 Combined refrigerator-freezers, fitted with separate external doors 65,627 170,228 

8471.70 Automatic data processing storage units 370,019 325,046 8509.10 Vacuum cleaners, with self-contained electric motor 144,905 236,931 

2902.20 Benzene 34,050 156,891 4011.20 New pneumatic tires, of rubber, of a kind used on buses or trucks 164,813 216,976 9999.95 Estimated "low valued" shipments 173,722 222,361 4810.19 Writing/graphic paper and paperboard, coated with kaolin, not over 10 fiber

 obtained by a mechanical process, in sheets, n.e.s.o.i. 192,362 205,746 

8528.21 Video monitors, color 234,180 245,926 8803.30 Parts of airplanes or helicopters, n.e.s.o.i. 82,778 109,957 8521.90 Video recording or reproducing apparatus, whether or not including a video tuner,

 other than magnetic tape-type 262,542 297,003  Total of items shown 22,481,571 29,790,586 2

All other 14,447,999 15,273,591 1

 Total of all commodities 36,929,570 45,064,177 4

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inclu

A-59
Table A–43 U.S. merchandise trade with India, by SITC codes (revision 3), 2003–05

(1,000 dollars)

SITC CodeNo.

Description

2003 2004 

0 Food and live animals 122,384 145,023 21 Beverages and tobacco 1,443 1,794 2 Crude materials, inedible, except fuels 387,807 392,258 5

3 Mineral fuels, lubricants and related materials 133,849 297,693 34 Animal and vegetable oils, fats and waxes 25,839 26,335 5 Chemicals and related products, n.e.s. 1,104,567 1,066,614 1,4

6 Manufactured goods classified chiefly by material 198,906 294,896 57 Machinery and transport equipment 1,798,156 2,293,729 2,8

8 Miscellaneous manufactured articles 487,108 650,093 89 Commodities and transactions not classified elsewhere in the SITC 107,125 126,765 2

Total all exports commodities 4,367,182 5,295,201 6,9

0 Food and live animals 872,800 912,820 91 Beverages and tobacco 18,668 19,135 2 Crude materials, inedible, except fuels 190,822 206,254 3

3 Mineral fuels, lubricants and related materials 229,036 250,843 54 Animal and vegetable oils, fats and waxes 30,514 99,538 5 Chemicals and related products, n.e.s. 1,126,507 1,185,734 1,5

6 Manufactured goods classified chiefly by material 5,313,349 6,571,196 7,17 Machinery and transport equipment 1,007,889 1,340,609 1,9

8 Miscellaneous manufactured articles 4,088,418 4,714,343 5,99 Commodities and transactions not classified elsewhere in the SITC 155,524 202,968 2

Total all imports commodities 13,033,530 15,503,440 18,7

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s." stands for "not elsewhere specified."

A-60
Table A–44 Leading U.S. exports to India, by Schedule B subheading, 2003–05

(1,000 dollars)

Schedule Bsubheading Description 2003 2004 20058802.40 Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg 172,741 200,369 3100.00 Fertilizers 105,299 114,357 2701.12 Bituminous coal, whether or not pulverized, but not agglomerated 1,136 111,105 

9880.00 Low value export shipments (non-Canadian) 82,309 99,824 7204.49 Ferrous waste and scrap, n.e.s.o.i. 663 41,936 8525.20 Transmission apparatus incorporating reception apparatus 50,283 102,941 7113.19 Articles of jewelry and parts thereof, of precious metal (excluding silver) 37,295 55,397 2707.99 Oils and products of the distillation of high temperature coal tar, n.e.s.o.i.; similar

 products with predominate aromatic constituent 61,836 113,832 

0802.11 Almonds, fresh or dried, in shell 70,114 66,815 8471.49 Other digital automated data processing machines, entered in the form of

 systems 59,050 79,950 

8431.43 Parts for boring or sinking machinery, n.e.s.o.i. 55,428 73,847 

8517.90 Parts of telephonic or telegraphic apparatus 57,179 81,031 

8524.31 Discs for laser reading systems, for reproducing phenomena other than sound or

 image 33,007 75,207 

8411.91 Parts for turbojets or turbopropellers 65,385 74,302 2710.19 Oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products, not light 55,048 54,022 

8471.80 Other units of automated data processing machines 53,011 63,890 

8517.50 Other apparatus for carrier-current line systems or for digital line systems 38,457 69,688 

8473.30 Parts and accessories for automated data processing machines and units 52,468 68,627 2926.10 Acrylonitrile 39,903 66,336 8802.30 Airplanes and aircraft, of an unladen weight over 2,000 kg but not over 15,000 kg 23,802 20,334 

7102.39 Nonindustrial diamonds, n.e.s.o.i. 5,230 31,026 7208.51 Flat-rolled products of iron/nonalloy steel, width 600 millimeters or more, not in

 coils, hot-rolled, over10 millimeters thick, n.e.s.o.i. 235 10,052 

8803.30 Parts of airplanes or helicopters, n.e.s.o.i. 48,930 47,744 7204.21 Waste and scrap, of stainless steel 10,708 27,483 8471.50 Digital processing units other than those of 8471.41 and 8471.49 36,523 51,239 

 Total of items shown 1,216,039 1,801,355 

All other 3,151,143 3,493,846  Total of all commodities 4,367,182 5,295,201 

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inclu

A-61
Table A–45 Leading U.S. imports from India, by HTS subheading, 2003–05

(1,000 dollars)

HTSsubheading Description 2003 2004 

7102.39 Nonindustrial diamonds, n.e.s.o.i. 2,563,526 2,852,130 7113.19 Articles of jewelry and parts thereof, of precious metal (excluding silver) 1,128,626 1,426,546 6206.30 Women's or girls' blouses, shirts and shirt-blouses, of cotton, not knitted or

 crocheted 339,271 305,115 

2710.19 Oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products, not light 151,858 97,213 

6205.20 Men's or boys' shirts of cotton, not knitted or crocheted 198,108 252,781 0306.13 Shrimps and prawns, including in shell, cooked by steaming or by boiling in water,

 frozen 382,664 335,078 

6204.52 Women's or girls' skirts and divided skirts, of cotton, not knitted or crocheted 63,126 81,457 6110.20 Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or

 crocheted, of cotton 165,521 202,440 

0801.32 Cashew nuts, fresh or dried, shelled 182,398 249,772 2710.11 Light oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products 74,912 129,764 

6302.60 Toilet and kitchen linen, of terry toweling or similar terry fabrics, of cotton 145,929 194,543 7210.49 Flat-rolled iron or nonalloy steel, not corrugated, 600 mm or more wide, plated or

 coated with zinc other than electrolytically 89,140 461,042 

6302.31 Bed linen, other than printed, of cotton, not knitted or crocheted 106,308 138,549 6105.10 Men's or boys' shirts, of cotton, knitted or crocheted 148,968 138,061 8708.99 Parts and accessories for motor vehicles, n.e.s.o.i. 94,258 146,759 5701.10 Carpets and other textile floor coverings, knotted, whether or not made up, of wool

 or fine animal hair 158,315 176,772 

6802.93 Worked monumental or building stone n.e.s.o.i., of granite 95,885 143,963 8701.90 Tractors, n.e.s.o.i. 74,891 94,731 6204.62 Women's or girls' trousers, etc., of cotton, not knitted or crocheted 60,663 72,858 6203.42 Men's or boys' trousers, bib and brace overalls, breeches and shorts not knitted

 or crocheted, of cotton 55,073 88,256 

8504.40 Static converters 110,890 102,717 3004.90 Certain medicaments put up in measure doses or in forms or packings for retail

 sale, n.e.s.o.i. 111,315 94,736 

9801.00 U.S. articles exported and returned, not advanced or improved in condition;

 animals exported or returned 85,541 117,434 

9404.90 Articles of bedding and similar furnishings n.e.s.o.i., fitted with springs or any

 material, stuffed, or of cellular rubber or plastics 82,873 88,403 

7305.19 Line pipe used in oil or gas pipelines, external diameter over 406.4 millimeters, of

 iron or steel, riveted or similarly closed, n.e.s.o.i. 0 0  Total of items shown 6,670,061 7,991,121 All other 6,363,469 7,512,318  Total of all commodities 13,033,530 15,503,440 

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or included."

A-62
Table A–46 U.S. merchandise trade with Russia, by SITC codes (revision 3), 2003–05

(1,000 dollars)

SITCCode No. Description 2003 2004 

0 Food and live animals 530,824 706,593 81 Beverages and tobacco 44,269 88,855 2 Crude materials, inedible, except fuels 30,743 63,550 

3 Mineral fuels, lubricants and related materials 7,409 10,016 4 Animal and vegetable oils, fats and waxes 5,704 5,072 5 Chemicals and related products, n.e.s. 303,784 235,671 36 Manufactured goods classified chiefly by material 104,437 125,188 17 Machinery and transport equipment 1,082,370 1,254,055 1,8

8 Miscellaneous manufactured articles 202,749 252,597 29 Commodities and transactions not classified elsewhere in the SITC 14,574 13,380 

Total all exports commodities 2,326,864 2,754,976 3,6

0 Food and live animals 259,289 230,870 31 Beverages and tobacco 78,271 79,385 2 Crude materials, inedible, except fuels 87,594 135,512 13 Mineral fuels, lubricants and related materials 3,047,668 4,150,799 7,6

4 Animal and vegetable oils, fats and waxes 67 51 5 Chemicals and related products, n.e.s. 1,604,184 1,539,092 1,7

6 Manufactured goods classified chiefly by material 2,531,636 4,821,375 4,8

7 Machinery and transport equipment 149,088 110,172 18 Miscellaneous manufactured articles 593,172 532,216 29 Commodities and transactions not classified elsewhere in the SITC 30,526 37,483 1

Total all imports commodities 8,381,496 11,636,955 15,3

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s." stands for "not elsewhere specified."

A-63
Table A–47 Leading U.S. exports to Russia, by Schedule B subheading, 2003–05

(1,000 dollars)

Schedule Bsubheading Description 2003 2004 

0207.14 Chicken cuts and edible offal, including livers, frozen 366,505 489,184 8431.43 Parts for boring or sinking machinery, n.e.s.o.i. 204,333 168,654 8703.23 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 1,500 but not over 3,000 cc 14,240 53,810 

8473.30 Parts and accessories for automated data processing machines and units 42,189 63,027 8703.24 Passenger motor vehicles with spark-ignition internal-combustion reciprocating

 piston engine, cylinder capacity over 3,000 cc 17,335 40,257 

8414.80 Air pumps and air or other gas compressors, n.e.s.o.i.; ventilating or recycling

 hoods incorporating a fan, n.e.s.o.i. 13,182 3,617 

8431.49 Parts and attachments for derricks, cranes, self-propelled bulldozers, graders, and

 other grading, scraping machinery, n.e.s.o.i. 25,115 35,318 

2401.20 Tobacco, partly or wholly stemmed/stripped 5,568 70,606 8802.40 Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg 11,700 54,750 

8701.90 Tractors, n.e.s.o.i. 18,101 19,651 8802.30 Airplanes and aircraft, of an unladen weight over 2,000 kg but not over 15,000 kg 0 3,200 8433.51 Combine harvester-threshers 2,746 16,365 8431.39 Parts for lifting, handling, loading, or unloading machinery, n.e.s.o.i. 22,732 31,184 3912.11 Cellulose acetates, nonplasticized, in primary forms 19,823 20,210 2844.10 Natural uranium and its compounds; uranium alloys, dispersions, ceramic

 products, and mixtures containing natural uranium or its compounds 101,596 89 

8705.90 Special purpose motor vehicles, other than those principally designed for the

 transport of persons or goods, n.e.s.o.i. 2,902 5,815 

0203.29 Meat of swine, n.e.s.o.i., frozen 3,258 21,357 8701.20 Road tractors for semi-trailers 4,962 10,063 5907.00 Textile fabrics otherwise impregnated, coated or covered; painted canvas being

 theatrical scenery, studio back-cloths or the like 3,800 12,878 

0802.12 Almonds, fresh or dried, shelled 15,217 21,565 

8429.52 Self-propelled mechanical shovels and excavators, with a 360-degree revolving

 superstructure 4,940 9,068 

0303.78 Whiting (Merluccius spp.) and hake (Urophycis spp.), excluding fillets, livers, and

 roes, frozen 1,183 11,375 

8413.70 Centrifugal pumps, for liquids, n.e.s.o.i. 39,651 93,186 8467.81 Chain saws, for working in the hand, hydraulic or with self-contained nonelectric

 motor 5,085 11,115 

8502.39 Other electric generating sets, n.e.s.o.i. 2,552 0 

 Total of items shown 948,715 1,266,344 All other 1,378,149 1,488,632  Total of all commodities 2,326,864 2,754,976 

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or included."

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Table A–48 Leading U.S. imports from Russia, by HTS subheading, 2003–05

(1,000 dollars)

HTSsubheading

Description

2003 2004 

2710.19 Oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products, not light 1,175,468 1,683,924 

2710.11 Light oils and preparations from petroleum oils and oils from bituminous minerals,

 minimum 70 percent by weight of such products 732,683 1,025,565 

2709.00 Petroleum oils and oils obtained from bituminous minerals, crude 650,387 818,147 

7601.10 Aluminum, not alloyed, unwrought 829,907 1,319,944 2844.20 Uranium and its compounds enriched in u235; plutonium and its compounds 910,890 824,963 

7408.11 Wire of refined copper, with a maximum cross sectional dimension over 6

 millimeters 95,218 131,842 

7601.20 Unwrought aluminum alloys 100,685 310,464 7110.21 Palladium, unwrought or in powder form 183,338 249,960 7207.12 Semifinished iron/nonalloy steel products, under 0.25 percent carbon,

 rectangular/not square, width not less than twice thickness 29,075 388,366 

7502.10 Nickel, not alloyed, unwrought 220,811 238,635 0306.14 Crabs, including in shell, cooked by steaming or by boiling in water, frozen 202,984 179,180 

7201.10 Nonalloy pig iron containing 0.5 percent or less phosphorus by weight, in primary

 forms 92,996 304,524 

2713.11 Petroleum coke, not calcined 174,984 170,709 2711.29 Petroleum gases and other gaseous hydrocarbons, other than natural gas, in a

 gaseous state 102,517 131,170 

4412.14 Plywood consisting of sheets of wood, each ply not exceeding 6 mm in thickness,

 at least one outer ply of nonconiferous wood, n.e.s.o.i. 101,155 152,917 

7606.12 Rectangular plates, sheets and strip, over 0.2 mm thick, of aluminum alloy 38,241 65,425 

2901.21 Ethylene 54,882 56,843 7102.39 Nonindustrial diamonds, n.e.s.o.i. 106,241 125,773 

2814.10 Anhydrous ammonia 236,626 174,842 7110.11 Platinum, unwrought or in powder form 165,550 126,114 3102.80 Mixtures or urea and ammonium nitrate in aqueous or ammoniacal solution 26,971 87,900 

2711.14 Ethylene, propylene, butylene, and butadiene, liquefied 50,729 81,841 

2208.60 Vodka 77,033 77,790 

9801.00 U.S. articles exported and returned, not advanced or improved in condition;

 animals exported or returned 9,154 9,318 

7209.16 Flat-rolled products of iron or nonalloy steel, in coils, cold-rolled, width of 600 or

 more and thickness over 1 to 3 millimeters 0 131,362  Total of items shown 6,368,524 8,867,521 1

All other 2,012,972 2,769,434 

 Total of all commodities 8,381,496 11,636,955 1

Source: Compiled from official statistics of the U.S. Department of Commerce.Note: Because of rounding, figures may not add to totals shown. The abbreviation "n.e.s.o.i." stands for "not elsewhere specified or inclu

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