December 2007 News

United States Wins WTO “Zeroing” Dispute with Mexico

On December 20, U.S. Trade Representative Susan C. Schwab announced that a WTO panel has once again found in favor of the United States in a case involving the "zeroing" method for calculating anti-dumping duties.  This case concerned a challenge by Mexico on the use of zeroing by the U.S. Department of Commerce. Schwab stated, “This is further proof of what the United States has been saying all along – that WTO rules do not prohibit ‘zeroing’ and that WTO Appellate Body reports to the contrary have overreached.” This marks the third time a WTO panel has found that “zeroing” in assessment proceedings is not prohibited by the WTO Antidumping Agreement.  It is the second time a WTO panel has considered and rejected Appellate Body findings to the contrary; this unprecedented situation reflects that those Appellate Body findings are not settled law.  Mexico has the option of appealing the report to the WTO Appellate Body.

View USTR press release

United States and Vietnam Hold First Meeting Under Trade and Investment Framework Agreement

On December 17, U.S. Trade Representative Susan C. Schwab met with Minister Nguyen Xuan Phuc, chairman of Vietnam's Office of Government, for the first ministerial meeting under the U.S.-Vietnam Trade and Investment Framework Agreement (TIFA).  The meeting was focused on Vietnam’s implementation of its WTO commitments as well as ways to further deepen bilateral trade and investment relations. “We are pleased with Vietnam’s progress to date in implementing its WTO commitments and domestic reform agenda, which have generated striking economic gains and steadily enhanced Vietnam’s regional and global economic competitiveness,” Ambassador Schwab said.  During the discussions, Ambassador Schwab underscored U.S. interest in ensuring that the commitments Vietnam made regarding its distribution and other service sectors are implemented in a transparent and timely manner.  She also urged Vietnam to take additional steps to improve its enforcement of intellectual property protection.  Ambassador Schwab and Minister Phuc welcomed the significant growth in bilateral trade during the past year and the opportunity to further strengthen U.S.-Vietnam trade and investment relations. 

View USTR press release

Cape Verde Accedes to World Trade Organization

On December 18, WTO Director-General Pascal Lamy welcomed the General Council's approval of Cape Verde's accession to the organization as “adding another valuable member to the family and brings us another step closer to universal membership.” He added, “WTO membership is facilitating Cape Verde integration into the global economy and provides a predictable and stable basis for growth and development, particularly pertinent now as Cape Verde is about to graduate from LDC status.”

View WTO press release

U.S. Comments on WTO Trade Negotiations Committee Report

View the text of the December 18 press release issued by Assistant U.S. Trade Representative Peter F. Allgeier regarding WTO Director-General Pascal Lamy’s statement on the Trade Negotiations Committee report. While commenting that several interventions of WTO members “beg for strong rebuttals and restatements of opposing or different positions,” Allgeier underscored the need for “serious reflection… on what we have heard from each other and consideration of where we each might adjust positions to bridge the substantial remaining differences.” He added, “If we don’t do that, we will not succeed.” Although Allgeier noted that “important” U.S. positions in the preliminary texts are not reflected for domestic agricultural subsidies, the NAMA range for coefficients, or in several aspects of the Rules text, he said that the United States “is not insisting that Chairs go backwards and produce revised papers that simply re-insert the full range of every Member’s position.”   Allgeier called on members to build on the “important progress” of the past few months, “rather than tear it down.”

Secretary Gutierrez Praises President Bush’s Signing of U.S.-Peru Trade Promotion Agreement

View the text of Commerce Secretary Carlos M. Gutierrez’s December 14 statement regarding President Bush’s signing of the U.S.-Peru Trade Promotion Agreement. The Secretary said that the President’s signing of the agreement “marks an historic step in strengthening America’s friendship with an ally and opening a new market to U.S. exports.” He added, “The U.S. - Peru Trade Promotion Agreement will give American exporters the same access to the Peruvian market, they have to our market to continue to expand and grow… “ Year-to-date through October U.S. merchandise exports to Peru have reached a record $3.4 billion, 44 percent higher than the $2.3 billion in merchandise exported to Peru during the same period of 2006. Year-to-date merchandise exports to the four pending FTA countries, Peru, Colombia, Panama and S. Korea, totaled $42.0 billion through October, up 14 percent from the $36.9 billion in merchandise exported during the same period of 2006. Bilateral free trade agreements (FTAs) are one of the best ways to open up foreign markets to U.S. exporters.

Commerce Acting Under Secretary Padilla’s Remarks to China-U.S. Innovation Conference

View the text of Acting Under Secretary of Commerce Christopher Padilla’s remarks to the China-U.S. Innovation Conference in Beijing on December 10. Padilla stated that a decision by China to turn away from its policy of encouraging and welcoming foreign participation in its economy “ would be a costly mistake, because economic openness is vital to fostering an environment in which innovation can thrive.” Noting that the best way for governments to encourage innovation “is generally to leave it alone,” Padilla expressed the hope that China’s leaders “will see the value in protecting IPR, and in promoting innovation through free markets, as the best way to achieve their vision for a prosperous and innovative Chinese society.”

Highlights of Commerce Secretary Gutierrez’s China Visit

During his visit to China to co-chair the U.S.-China Joint Commission on Commerce and Trade (JCCT), Commerce Secretary Carlos M. Gutierrez took part in several other events. The Secretary signed a Memorandum that will bring more Chinese tourists to the U.S. by facilitating group leisure travel from China to the United States and permit U.S. destinations to market themselves in China. Mr. Gutierrez witnessed the signing of two commercial agreements at a ceremony in Beijing, and celebrated China’s approval of the 100th Wal-Mart China store. In his remarks to the China-U.S. Innovation Conference, Secretary Gutierrez discussed the factors needed to sustain the environment for innovation, including continuing to open global markets and ensuring the safety of products.

2007 Report to Congress on China’s WTO Compliance

On December 11, USTR presented to Congress its annual report on China’s compliance with its WTO accession obligations.  The report highlights the status of China's ongoing efforts in such areas as intellectual property rights, industrial policy, agriculture, and services. According to the report’s Executive Summary, the United States has focused its bilateral and multilateral engagement with China on significant market impediments and trade-distortive practices, as well as other Chinese government policies and practices where the United States has needed to respond in order to defend fundamental WTO principles. The three cases the United States brought against China in the WTO in 2007 implicate fundamental WTO obligations, as does the WTO case filed by the United States in 2006 challenging China’s use of prohibited local content requirements in the auto sector.

Meanwhile, the United States’ bilateral engagement produced near-term results in several areas in 2007, including the suspension of overly burdensome testing and certification requirements for medical devices, the granting of biotechnology safety certificate approvals, increased insurance market access, expanded business scopes for foreign banks and securities companies, and a new civil aviation agreement. According to the Executive Summary, “These developments demonstrate the substantial ongoing benefits to the United States – including U.S. workers, businesses, farmers, service providers and consumers – from China’s WTO membership.”

View USTR press release

Outcome of U.S.-China Joint Commission on Commerce and Trade

View the text of the Commerce/USTR fact sheet regarding the 18^th U.S.-China Joint Commission on Commerce and Trade (JCCT), held December 11 in Beijing, China. The U.S. Department of Agriculture also participated in the meeting. Regarding intellectual property rights, China agreed to strengthen enforcement of laws against company name misuse, a practice in which some Chinese companies have registered legitimate U.S. trademarks and trade names without legal authority to do so. On product safety, the parties noted the signing of a Memorandum of Agreement on active pharmaceutical ingredients (APIs). Beyond this, China agreed to address specific loopholes in its regulation of bulk chemicals used as APIs. For medical devices, China agreed to suspend implementation of AQSIQ Decree 95, a regulation that would have produced additional testing and inspection redundancies targeted exclusively at imported medical devices. China confirmed it will submit, by the end of 2007, its initial offer on government agencies that will be covered by the WTO Government Procurement Agreement; China’s joining the GPA will provide American companies access to a $35 billion/year government procurement market. China also made a strong statement reiterating its commitment to open investment and competition policies, and to the principle of non-discrimination in investment regulation.

Gutierrez Says U.S. Exports Will Grow with Colombia Pact

During his remarks at the Heritage Foundation’s December 3 event, “Colombia and the United States: Partners in Security, Partners in Prosperity,” Commerce Secretary Carlos M. Gutierrez discussed the progress that Colombia has made as a nation, and urged approval of the Colombia trade agreement, which will boost U.S. exports. He stated, “I believe not passing a Colombia FTA would be an enormous foreign policy mistake. Worse, it would be a reversal of all that the Colombian people have accomplished and the investment we’ve made in their success.”

View text of Secretary’s remarks

Korean and U.S. Commerce Ministers Discuss Economic Relations, U.S.-Korea FTA

View the text of a Commerce Department press release which was issued after Commerce Secretary Carlos M. Gutierrez met with South Korean Commerce, Industry, and Energy Minister Kim Youngju on December 3 to discuss bilateral economic relations and the U.S.-Korea Free Trade Agreement (FTA). Regarding the FTA, the Secretary stated that it “…would benefit the U.S. economy by giving American exporters the tools to expand and grow in this large developed market with major commercial opportunities… [and] help solidify the overall U.S. relationship with Korea, a key partner in the dynamic Asia-Pacific region.” However, in order for this FTA to be possible, Mr. Gutierrez noted to Minister Kim that “it is essential that Korea open its market to American beef, and for Korea to base its beef import measures on international standards and relevant scientific evidence.”

Secretary Gutierrez Praises Senate Passage of U.S.-Peru Trade Promotion Agreement

On December 4, Commerce Secretary Carlos M. Gutierrez issued a statement applauding the U.S. Senate’s passage of the U.S.-Peru Trade Promotion Agreement. He stated, “With this final vote, Congress will boost both nations’ economies and remove barriers for U.S. exports to that market.” The Secretary added, “Bipartisan cooperation to pass this agreement in both the House and Senate sets a positive tone for our common agenda to give American businesses, workers and farmers the tools needed to compete and win globally as well as promote peace and prosperity with U.S. allies.”

Commerce/USTR Statement on WTO Negotiating Group on Rules’ Draft Texts

View the text of the joint Commerce/USTR statement regarding the draft texts released by the WTO Negotiating Group on Rules. According to the statement, “While the U.S. is very disappointed with important aspects of this draft text, we believe it provides a basis for further negotiations.

View the draft WTO Negotiating Group on Rules texts

Commerce Secretary Gutierrez Commends Resolution of WTO Dispute with China on Prohibited Subsidies

In a November 29 press release, Secretary of Commerce Carlos M. Gutierrez commended U.S. Trade Representative Susan Schwab’s announcement that China had agreed to terminate subsidies that the United States alleged were illegal under WTO rules. Schwab announced the United States and China had signed a Memorandum of Understanding (MOU) that should lead to full elimination of these prohibited subsidies, which China had been providing across the spectrum of industrial sectors in China—including steel, wood products, information technology, and others.  The Secretary called the announcement “an important development in our trade relationship with China.” He added, “This resolution shows that the intelligent use of trade enforcement tools, combined with results-oriented dialogue, can produce real results. Foreign government subsidies distort the free flow of goods and adversely affect American business in the global marketplace.” Under the MOU, China has committed to complete a series of steps by January 1, 2008 to ensure that the WTO-prohibited subsidies cited in the U.S. complaint have been permanently eliminated, and that they will not be re-introduced in the future.  At the same time, if for any reason China does not meet its MOU commitments, the United States has the right to re-start WTO proceedings. 

View USTR press release

Libya Lays Out Welcome Mat for U.S. Trade and Investment

The Libyan government is courting U.S. businesses to open trade and investment links as the country works to rejoin the international community. During a November 13 meeting with U.S. businessmen, Libya Economy, Trade and Investment Minister Ali Al-Esawi cited oil, tourism, communications and information technology as sectors of the Libyan economy that are eager for U.S. investment. The U.S. Embassy in Libya cautions, however, that despite Libya’s stated welcome to international business, foreign investment in that country is an uncertain prospect. Libya and the United States are exploring the possibility of negotiating a Trade and Investment Framework Agreement (TIFA). TIFAs have been negotiated predominantly with countries that are in the beginning stages of opening up their economies to international trade and investment. Meanwhile, the National US-Arab Chamber of Commerce (NUSACC) is preparing to bring a group of U.S. business people to Libya December 4-10. This NUSACC mission to Libya is its second since the United States removed Libya from the list of state sponsors of terrorism and restored diplomatic relations in 2006.

View USIS Washington File report