U.S. Urged to Remove Restrictive Trade Measures

WTO forum also lauds U.S. for a generally open trade and investment policy.

GENEVA — Trading partners praised the U.S. at a World Trade Organization session here for maintaining an open trade and investment regime, but took issue with problematic policies in cotton, the maintenance of high tariffs in sectors such as textiles and apparel, and plans to scan all U.S.-bound container cargo by July 2014.

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“As a result of the United States’ open markets, nominal U.S. imports of goods and services increased by 36 percent between 2009 and 2011 to $2.66 trillion,” said Michael Punke, U.S. ambassador to the WTO. “This is equal to $7.3 billion of imports of goods and services per day, or $5 million per minute.

“In 2011, nearly 70 percent of all U.S. imports, including those under preference programs, entered the United States duty free,” Punke said during a two-day review of U.S. trade policy that ended Thursday.

However, during the proceedings, countries such as China, Brazil and Turkey voiced concerns over high tariffs still in place in problematic sectors.

“While 37 percent of the U.S. tariff lines are duty free, 7 percent of them are tariff peaks, mostly on products of interest to developing countries, such as textiles and clothing, agricultural products and footwear,” said Yi Xiaozhun, China’s WTO ambassador.

The Turkish delegation noted that higher levels of tariffs in textiles and apparel “are important impediments” for their exporters.

The politically sensitive cotton sector also came under heavy fire.

“U.S. policies on cotton and on export credit guarantees are emblematic,” said Roberto Azevedo, Brazil’s WTO ambassador.

Similarly, China’s Yi argued that U.S. support measures for cotton “vividly demonstrate how key interests of developing countries are seriously undermined.”

Plans to usher in 100 percent scanning of maritime containers and air cargo drew a stream of concern, including from Japan, the European Union, Brazil and Australia, that the measures might be costly and trade restrictive. These nations urged the U.S. to rethink and adjust the requirements.

Singapore, one of the world’s busiest transport hubs, said it understands the U.S. emphasis on safety and security, but said, “We believe a careful balance can be struck when in risk management such that they do not lead to onerous measures which become unintended barriers to traders.”

In May, U.S. Homeland Security Secretary Janet Napolitano issued a report and letter to Congress extending to July 2014 the deadline for implementing 100 percent scanning, the U.S. delegation noted in response to written questions. Pressed on who would bear the costs, the U.S. said estimates for potential costs incurred outside the U.S. to implement the scanning regime vary by country.

The large number of U.S. rules of origin also came under the spotlight by WTO delegations, and in the U.S. trade policy review report by the WTO secretariat used as reference for the discussion.

“The proliferation of differing rules of origin, their complexity and lack of transparency continue to be of concern to some,” the WTO said.

With regard to preferential rules of origin, the report outlines that each free-trade agreement “has unique rules of origin” and that in some there are “significant differences in the origin rules applied across…industries.”

The case of textiles and apparel, it notes, “is one important example, with its ‘yarn forward’” rule for many products that essentially requires three levels or steps of origin-confirming process for the yarn, fabric and apparel in order to confer origin or allow for regional value content calculation. Other industry sectors often require a simple one-step change in tariff heading or subheading to confer origin.

Some major trading powers, including China and Brazil, also called on the U.S. to show leadership in the troubled Doha Round of global trade talks aimed at reducing tariffs.

Yi said the U.S. could “re-engage” in the Doha talks “in a more proactive approach,” and pointed out that when strong leadership of the U.S. is required at the multilateral front, the U.S. seemed to have deviated and prioritized “regional and bilateral initiatives.”

Asked to comment on the leadership issue, Punke told WWD, “We’re very proud of the role that we’re playing, in terms of leadership in this institution, on the issues across the board, including Doha.”