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President Trump Signs Two Trade Executive Orders

Friday, March 31, 2017   (0 Comments)
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A Message from the National Association of Manufacturers



President Trump Signs Two Trade Executive Orders: Report on Foreign Market Distortions/Trade Deficits and Improved Mechanisms to Improve Trade Remedy Duty Collection


President Trump signed two trade executive orders (EO), although they have not yet been released. Here is what we understand so far:


1.    Report on Foreign Market Barriers and Trade Deficits: This EO directs the Office of the U.S. Trade Representative and Commerce Department to issue a report within 90 days that identifies systemic trade abuses and non-reciprocal trade practices that are harming U.S. industries. The report will focus particularly on countries with which the United States runs a trade deficit. The report is to detail the major causes of trade deficits by country and product, including the extent to which the deficit is due to trade cheating or other inappropriate behavior; free trade agreements that have not lived up to their forecasted benefits; lax U.S. enforcement, currency manipulation or misalignment; World Trade Organization (WTO) constraints; systematic overcapacity; and other issues. The intent is to use the findings of this report to provide the basis for appropriate trade enforcement and action.


2.    Improved Collection of Trade Remedy Duties: This EO directs the Department of Homeland Security (DHS), working with other agencies, to improve the collection of antidumping duty (AD) and countervailing duty (CVD) orders at the border by improving bonding requirements and to take other measures to address risk assessments. This EO responds to the findings of a July 2016 General Accounting Office (GAO) report that found $2.3 billion in AD and CVD duties went uncollected through May 2015, citing inadequate bonding and risk assessment procedures.


The NAM looks forward to providing input on the EO on foreign market-distorting trade practices in particular and welcomes NAM member input. We will build on the information that the NAM submitted in October 2016 for the National Trade Estimate report, in February 2017 for the Special 301 report on intellectual property rights, and most recently in March 2017 on digital trade. We will also rely on and update our input here and here to the U.S. International Trade Commission for their June 2016 report on the impact of trade agreements. Please provide your input to Linda Dempsey and Ryan Ong. As details on the administration’s expected outreach becomes clearer, we will provide additional information.


USTR Releases 2017 National Trade Estimate Report on Foreign Trade Barriers


USTR released its longstanding annual report on international trade barriers around the world. This is the first such report released under the Trump Administration and an important window to how the new administration plans to elaborate on its 2017 Trade Policy Agenda and 2016 Annual Report approach to market-distorting actions taken by foreign governments. Included with the release is also a fact sheet on digital trade barriers, on which the NAM had issued a detailed submission, a summary of the NTE report’s biggest developments, a fact sheet on technical barriers to trade, and a fact sheet with success stories on opening markets for ag exports.


Section 303 of the Trade and Tariff Act of 1984 imposed an annual requirement on USTR to produce an annual report identifying major foreign barriers to U.S. exports and investment, the effects of those barriers on U.S. commerce and actions taken to eliminate barriers. The 2017 National Trade Estimate (NTE) covers trade barriers in more than 60 markets that protect foreign competitors and block access by U.S. goods and services to critical foreign markets, while also describing efforts by USTR and other U.S. government agencies to address those barriers. Trade barriers in China, India, Indonesia, Russia, Japan and the European Union are featured prominently in the report. USTR’s press release specifically highlighted challenges in China, including industrial overcapacity, cybersecurity challenges and forced technology transfers. The report covers a wide range of priority trade barriers that the NAM highlighted in its October 2016 comments, including import tariffs, export subsidies and limitations, discriminatory localization policies, lack of intellectual property protection, technical barriers to trade, investment restrictions and digital trade. Note that the Special 301 report on intellectual property issues will be issued next month.


The report indicates a clear focus on robust trade enforcement—making sure other countries are playing by the rules to which they have committed—a priority shared by the NAM and its members. While the introductory language of the report was largely unchanged from previous years, the report does indicate a stronger focus on trade deficits, with data on whether a country runs a surplus and a deficit (and how that has changed over the last year) front and center for each country included. For more information about this report and the NAM’s efforts to highlight trade barriers that are impacting manufacturers in the United States, please contact Linda Dempsey and Ryan Ong.

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