The following is Chapter 1 of the 2017 Trade Policy Agenda and 2016 Annual Report of the President of the United States on the Trade Agreements Program which summarizes President Trump's trade objectives and priorities. The text has been reformatted from the original to fit the style of this website. The full 336-page report may be found by clicking here. Posted March 2, 2017
Pursuant to 19 U.S.C. § 2213(a)(1)(B), we hereby submit the President’s National Trade Policy Agenda for 2017. This submission is normally prepared under the direction of the United States Trade Representative (USTR). In fact, U.S. law provides that the USTR shall have “primary responsibility for developing” United States international trade policy. 19 U.S.C. § 2171(c)(1)(A). U.S. law also provides that the USTR shall “act as the principal spokesman of the President on international trade.” 19 U.S.C. § 2171(c)(1)(E). Accordingly, we intend to submit a more detailed report on the President’s Trade Policy Agenda after the Senate has confirmed a USTR, and that USTR has had a full opportunity to participate in developing such a report. In the meantime, and in order to comply with the statutory deadline of March 1, see 19 U.S.C. § 2213(a), we hereby submit this statement of the trade policy agenda for 2017.
II. THE TRADE POLICY OBJECTIVES AND PRIORITIES OF THE UNITED STATES FOR 2017, AND REASONS THEREFOR
A. Key Principles and Objectives of the Trump Administration’s Trade Policy
In 2016, voters in both major parties called for a fundamental change in direction of U.S. trade policy. The American people grew frustrated with our prior trade policy not because they have ceased to believe in free trade and open markets, but because they did not all see clear benefits from international trade agreements. President Trump has called for a new approach, and the Trump Administration will deliver on that promise.
The overarching purpose of our trade policy – the guiding principle behind all of our actions in this key area – will be to expand trade in a way that is freer and fairer for all Americans. Every action we take with respect to trade will be designed to increase our economic growth, promote job creation in the United States, promote reciprocity with our trading partners, strengthen our manufacturing base and our ability to defend ourselves, and expand our agricultural and services industry exports. As a general matter, we believe that these goals can be best accomplished by focusing on bilateral negotiations rather than multilateral negotiations – and by renegotiating and revising trade agreements when our goals are not being met. Finally, we reject the notion that the United States should, for putative geopolitical advantage, turn a blind eye to unfair trade practices that disadvantage American workers, farmers, ranchers, and businesses in global markets.
In addition to these basic principles, we will focus on the following key objectives:
B. Top Priorities and Reasons Therefor
To achieve the objectives described above, the Trump Administration has identified four major priorities: (1) defend U.S. national sovereignty over trade policy; (2) strictly enforce U.S. trade laws; (3) use all possible sources of leverage to encourage other countries to open their markets to U.S. exports of goods and services, and provide adequate and effective protection and enforcement of U.S. intellectual property rights; and (4) negotiate new and better trade deals with countries in key markets around the world. Each of these priorities – and the reasons they are so important – are discussed in greater detail below.
1. Defending Our National Sovereignty Over Trade Policy
In late 1994, Congress approved the Uruguay Round Agreements Act, thereby paving the way for the United States’ entry into the WTO. WTO members agreed to provisions to ensure that, if a country lost a dispute at the WTO and failed to bring its measure into compliance with WTO rules, to provide compensation, or otherwise to reach a mutually satisfactory solution, the complaining countries would have the right to be authorized to retaliate by imposing trade sanctions on the losing country.
The anchor for this new dispute settlement system was an agreement known as the Understanding on Rules and Procedures Governing the Settlement of Disputes, often called the Dispute Settlement Understanding (DSU). The core provision of the DSU was the express legal requirement that the WTO, through its dispute settlement findings and recommendations, could not “add to or diminish the rights or obligations” of the United States, or other countries under the WTO agreements. This requirement was so critical that it was included not once, but twice in the text of the DSU, once in Article 3 as a specific direction to the WTO’s Dispute Settlement Body in adopting its recommendations, and once in Article 19 as a specific direction to WTO panels and the Appellate Body in setting out their findings and recommendations to be adopted by the DSB. The Clinton Administration and Congress both made clear that this language was essential to winning American support for the DSU.
At the time, the American people were assured that, by the express terms of the DSU itself, this dispute settlement process would not alter the terms of what the United States had agreed to in the WTO I. THE PRESIDENT’S 2017 TRADE POLICY AGENDA | 3 Agreements, and what Congress thereafter expressly approved when it passed the Uruguay Round Agreements Act. In other words, the United States entered into written agreements that contained rules on a range of matter such as trade-related aspects of intellectual property rights, import licensing, sanitary and phytosanitary standards, antidumping, technical standards, subsidies and countervailing duties, investment measures, and safeguards. The United States also entered into the DSU, which contained a clear and express legal limitation that the WTO dispute settlement process could not add to U.S. obligations or diminish U.S. rights under those agreements. By insisting on and negotiating the express terms of these agreements, the United States established clear and firm parameters for the role of the WTO in regulating trade.
Given this history, it is important to recall also that Congress had made clear that Americans are not directly subject to WTO decisions. The Uruguay Round Agreements Act states that, if a WTO dispute settlement report “is adverse to the United States, [the U.S. Trade Representative shall] consult with the appropriate congressional committees concerning whether to implement the report’s recommendation and, if so, the manner of such implementation and the period of time needed for such implementation,” confirming that these WTO reports are not binding or self-executing. 19 U.S.C. § 3533(f). The Uruguay Round Agreements Act also specifically provides that “No provision of any of the Uruguay Round Agreements, nor the application of any such provision to any person or circumstance, that is inconsistent with any law of the United States shall have effect.” 19 U.S.C. § 3512(a)(1). In other words, even if a WTO dispute settlement panel – or the WTO Appellate Body – rules against the United States, such a ruling does not automatically lead to a change in U.S. law or practice. Consistent with these important protections and applicable U.S. law, the Trump Administration will aggressively defend American sovereignty over matters of trade policy.
2. Strictly Enforcing U.S. Trade Laws
For decades, Congress has maintained a series of laws designed to prevent the U.S. market from being distorted by unfair practices such as injuriously dumped or subsidized imports, or by harmful surges of imports. These laws have been a critical aspect of the bargain between the U.S. government and American workers, farmers, ranchers, and businesses (large and small) that has long supported the free and fair trade system in this country. These laws have also reflected the core principles and legal rights of the multilateral trading system since its founding in 1947 with the General Agreement on Tariffs and Trade (GATT). It is notable that Article VI of the GATT in the strongest language possible, states that injurious dumping “is to be condemned.” Trade remedies are a foundation to the implementation of the WTO agreements, and to avoid market distortions, and it is critical that WTO members fully recognize their centrality to the international trading system.
Consistent with the strong textual foundation in the GATT and WTO Agreement, Title VII of the Tariff Act of 1930 provides the United States with the authority to impose antidumping (AD) and countervailing duties (CVD) on imports that are either “dumped” (sold at less than their fair value) or subsidized – if such imports cause or threaten material injury to a domestic industry. The AD/CVD laws are fully consistent with our WTO obligations – and, indeed, the WTO agreements specifically provide for such laws. For decades, domestic producers have had the right to file cases seeking AD and/or CVD relief. The U.S. Department of Commerce also has the right to self-initiate such cases if circumstances warrant. Other long-standing laws address other situations in which government action may be appropriate.
Under Section 201 of the Trade Act of 1974, the President may impose relief if increasing imports are a substantial cause of serious injury to a domestic industry. This “safeguard” provision, used most recently by President George W. Bush in response to a harmful surge of steel imports, can be a vital tool for industries needing temporary relief from imports to become more competitive. USTR has the authority to ask for a safeguard investigation in the appropriate circumstances.
Section 301 of the Trade Act of 1974 authorizes the USTR to take appropriate action in response to foreign actions that violate an international trade agreement or are unjustifiable, or unreasonable or discriminatory, and burdens or restricts United States commerce. Investigations leading to these important actions may be initiated pursuant to requests by private U.S. workers and businesses or a determination by the USTR. Properly used, section 301 can be a powerful lever to encourage foreign countries to adopt more market-friendly policies.
The Trump Administration believes that it is essential to both the United States and the world trading system that all U.S. trade laws be strictly and effectively enforced. We strongly support true market based competition – and we welcome the partnership of any country that agrees with us. Unfortunately, however, large portions of the global economy do not reflect market forces. Important sectors of the global economy, and significant markets around the world, have been at times distorted by foreign government subsidies, theft of intellectual property, currency manipulation, unfair competitive behavior by state-owned enterprises, violations of labor laws, use of forced labor, and numerous other unfair practices
The Trump Administration will not tolerate unfair trade practices that harm American workers, farmers, ranchers, services providers, and other businesses large and small. These practices lower living standards for all Americans by distorting U.S. and global markets and preventing resources from being allocated in the most efficient manner. These practices distort global efficiencies by preventing developing or emerging economies from competing against non-market based rivals that drive them from markets before they can even get a foothold. And, when the WTO adopts interpretations of WTO agreements that undermine the ability of the United States and other WTO Members to respond effectively to these real world unfair trade practices with remedies expressly allowed under WTO rules, those interpretations undermine confidence in the trading system. None of these outcomes is in the interest of the United States or a healthy global economy. Accordingly, the Trump Administration will act aggressively as needed to discourage this type of behavior – and encourage true market competition.
3. Using Leverage to Open Foreign Markets
The Trump Administration believes that U.S. workers, farmers, ranchers, services providers, and businesses large and small should have a free and fair chance to compete around the world. Such access benefits the U.S. economy, as Americans would have larger and more competitive markets in which to sell their goods and services. Indeed, exports – of manufactured goods, agricultural products, and services – are an important and essential aspect of the U.S. economy. Exports already support millions of high-paying jobs for American citizens, and the Administration wants to see them grow. At the same time, increased market access for American goods and services will also help the global economy, as everyone benefits from a system that rewards hard work and innovation.
Unfortunately, U.S. exports face significant barriers in many markets. The causes of market obstruction and closure are numerous. In some instances, trading partners maintain high tariffs and other non-tariff barriers, which block market access to U.S. goods and agricultural exports. In others, foreign producers can benefit from subsidies that give them an unfair advantage over their U.S. competitors. Other countries have looked to harm U.S. companies by blocking or unreasonably restricting the flow of digital data and services, or through theft of trade secrets. In still others, foreign countries can use technical barriers – such as unnecessary regulations on particular items – to limit competition, including in the services sector. Concerns have also been raised over currency practices and their impact on the competitiveness of U.S. goods and services. These are only a few examples of the tactics that can be used to block or impede the competitiveness of U.S. exporters.
For decades, the U.S. government has engaged in efforts to break down such barriers and open foreign markets to U.S. competition. The Trump Administration recognizes that such efforts are inherently difficult, as foreign governments often have strong political reasons to protect certain industries in their home markets. However, the status quo is unsustainable – for too long Americans have lost business to other countries, in part because our businesses and workers are not being given a fair opportunity to compete abroad.
There are at least two fundamental challenges that we must finally address. The first challenge is that the WTO rules, and those of some bilateral and plurilateral trade agreements, are often written with the implicit understanding that countries implementing those rules are pursuing free-market principles. In a world in which there are several important players in the global economy that do not fully adhere to the 5 free-market principles in the organization of their economic systems, systematic analysis of such economies relative to economic principles must become more acute. Furthermore, the drafting, implementation, and application of trading rules must find ways to adjust.
The second challenge is that WTO rules, and those of bilateral and plurilateral trade agreements, are often written with the implicit understanding that countries implementing those rules have functional legal and regulatory systems that are transparent. In practice, transparent systems are critical to the functioning of trade rules because transparency enables stakeholders and governments to understand the rules of the road, and prepare effective diplomatic or legal challenges to those rules when they are not in conformity with international obligations. Once again, the world in which we find ourselves is one in which there are a number of important players whose legal and regulatory systems are not sufficiently transparent. These countries make it difficult for the global trading system to hold them accountable. The inability of the system to hold those countries accountable in turn leads to a loss of confidence in the system.
It is time for a more aggressive approach. The Trump Administration will use all possible leverage to encourage other countries to give U.S. producers fair, reciprocal access to their markets. The purpose of this effort is to ensure that more markets are truly open to American goods and services and to enhance, rather than restrict, global trade and competition.
Such a policy will help grow the global economy by breaking down long-standing trade barriers and promoting increased competition.
4. Negotiating New and Better Trade Deals
Since the late 1980’s, the United States has entered into a wide variety of trade deals, including the North American Free Trade Agreement, the Uruguay Round Agreements that created the WTO, China’s 2001 Protocol of Accession to the WTO, and a series of trade agreements. Together, these and other agreements have created a framework for globalization that establishes the rules and conditions that govern U.S. trade and investment. For years, Americans have been promised that this system would lead to stronger economic growth and greater opportunities for U.S. workers and businesses. And, in fact, this system has generated substantial benefits to some American workers, farmers, ranchers, services providers, and other businesses – particularly in the form of increased export opportunities.
Unfortunately, a review of what has happened since 2000 – the last full year before China joined the WTO – shows a period of slowed GDP growth, weak employment growth, and sharp net loss of manufacturing employment in the United States. Many factors contribute to this, notably the financial crisis of 2008-2009 and the broad impact of automation. But the trade data are striking. Rather than showing that the results of this system have lived up to expectations, they portray a very different reality:
These are alarming results. They reflect numerous challenges facing U.S. policy other than trade – and the Trump Administration is committed to taking all possible steps to create a more vibrant, and more competitive, economy. We intend to work with the Congress to lower taxes, reduce regulations, increase funding for infrastructure, and take other steps to stimulate U.S. economic growth. At the same time, these figures indicate that while the current global trading system has been great for China, since the turn of the century it has not generated the same results for the United States.
There are significant reasons to be concerned with other major agreements as well. For years now, the United States has run trade deficits in goods with our trading partners in the North American Free Trade Agreement (NAFTA). In 2016, for example, our combined trade deficit in goods with Canada and Mexico was more than $74 billion. As long ago as 2008, both Barack Obama and Hillary Clinton called for the United States to renegotiate NAFTA – and to withdraw from NAFTA if such renegotiations were unsuccessful.
Further, the largest trade deal implemented during the Obama Administration – our free trade agreement with South Korea – has coincided with a dramatic increase in our trade deficit with that country. From 2011 (the last full year before the U.S.-Korea FTA went into effect) to 2016, the total value of U.S. goods exported to South Korea fell by $1.2 billion. Meanwhile, U.S. imports of goods from South Korea grew by more than $13 billion. As a result, our trade deficit in goods with South Korea more than doubled. Needless to say, this is not the outcome the American people expected from that agreement.
Plainly, the time has come for a major review of how we approach trade agreements. For decades now, the United States has signed one major trade deal after another – and, as shown above, the results have often not lived up to expectations. The Trump Administration believes in free and fair trade, and we are looking forward to developing deeper trading relationships with international partners who share that belief. But, going forward, we will tend to focus on bilateral negotiations, we will hold our trading partners to higher standards of fairness, and we will not hesitate to use all possible legal measures in response to trading partners that continue to engage in unfair activities.
III. NEXT STEPS
The Trump Administration has already begun making progress on the objectives and priorities described above. By withdrawing from the Trans-Pacific Partnership (TPP), the President sent a clear signal that the United States would take a new approach to trade issues, and paved the way for potential bilateral talks with the remaining TPP countries. The President has begun his consultations with Congress on the ways in which future trade agreements can work for all Americans more effectively than they have in the past. The President has also put together a strong team of officials who are committed to defending America’s national sovereignty, enforcing U.S. trade laws, and using American leverage to open markets for our goods and services. We anticipate more activity on all of these fronts in the near future.
For more than 20 years, the United States government has been committed to trade policies that emphasized multilateral and other agreements designed to promote incremental change in foreign trade practices, as well as deference to international dispute settlement mechanisms. The hope was that such a system could obtain better treatment for U.S. workers, farmers, ranchers, and businesses. Instead, we find that in too many instances, Americans have been put at an unfair disadvantage in global markets. Under these circumstances, it is time for a new trade policy that defends American sovereignty, enforces U.S. trade laws, uses American leverage to open markets abroad, and negotiates new trade agreements that are fairer and more effective both for the United States and for the world trading system, particularly those countries committed to a market-based economy. The Trump Administration is committed to this policy to increase the wages of American workers; give our farmers, ranchers, services providers, and agricultural businesses a better chance to grow their exports; strengthen American competitiveness in both goods and services; and provide all Americans with a better and fairer chance to improve their standard of living.
 At this time, the Trump Administration is not proposing legislation with respect to the objectives or priorities outlined in this statement. See 19 U.S.C. § 2213(a)(3)(A)(iii).
 According to 19 U.S.C. § 2213(a)(3)(A)(iv), the President should report on “the progress that was made during the preceding year in achieving” the trade policy objectives and priorities discussed above. Since the Trump Administration did not take office until January 20, 2017, our statement is limited to progress since that date.
Click here to view the complete technical textiles events calendar that includes show information links.
BeaverLake6 Report is pleased to provide an exclusive interview with Li Lingshen, Ph.D., Vice President of the China National Textile and Apparel Council, and President of the China Nonwovens & Industrial Textiles Association, the overseeing organization for the technical textiles industry in China. Click here to read the interview.
IFAI Expo 2018 was the first show under IFAI's new CEO/President Steve Schiffman. In a quick conversation on the first day, Mr. Schiffman thought event attendance was on target with the expectation of a 500 increase over the 4500 total participants (counting both exhibitors and visitors) they had in 2017 in New Orleans. Similarly, a conversation with one of the managers of ACMA, a partner in CAMX, said their pre-registration had already topped the 6500 they had last year in Orlando. (Keep in mind, though, the 2017 CAMX show had to be rescheduled from September to December because of Hurricane Irma.) Click here to read more about the shows. Posted October 19, 2018
Positive Reviews but Still Uncertainty. On November 16, 2018, two of the US textile industry associations testified before the US International Trade Commission (ITC) in a special hearing to determine the economic impact of the proposed United States-Mexico-Canada Agreement (USMCA). The leaders of the American Apparel & Footwear Association (AAFA) and the National Council of Textile Organizations (NCTO) provided statements on how they feel the new agreement will affect their member companies.
The two organizations clearly have different biases; however, in looking over the AAFA and NCTO statements, it appears to me that while the organizations both clearly said they were not offering an endorsement yet of the agreement, they gave general overall approval for USMCA, acknowledging the 1992 North American Free Trade Agreement (NAFTA) needed updating. Both organizations are taking a wait-and-see attitude to more fully look at how the agreement impacts the complex supply chain of textiles and apparel. [Click here to continue.]
Posted November 21, 2018
NAFTA Replacement Agreement Negotiated. On October 1, President Donald Trump announced the US, Mexico and Canada had reached an agreement whichreplaces the North American Free Trade Agreement (NAFTA) that went into effect in 1994. The new United States-Mexico-Canada Agreement (USMCA) contains provisions and language that has an impact on the technical textiles industry; the most important are 1) a special section covering textiles and apparel and 2) rules of origin that will require 75% of automotive content (under NAFTA 62.5%) be made in North America. Mexico and Canada are the two largest importers of US made technical textiles and the automotive industry is the largest intended end market of these technical textiles. Click here to go to the United States Trade Representative's website and read the "Textiles and Apparel Goods" chapter. Posted October 3, 2018
Are you looking for a quick understanding of the China technical textiles industry? Through our special relationship with China Nonwovens & Industrial Textiles Association (CNITA) and their China Textile publication, BeaverLake6 Report is pleased to post the English-translation of the recently issued "Status Quo of China's Nonwovens and Industrial Textiles Industry, 2017." The report covers the different levels of the industry, geographic export demographics, and forecast the needs in the major end market applications. Click here to read the report in our China Textile website section. Posted June 18, 2018
I am pleased to announce the second part of my report 2018 State of the U.S.Technical Textiles Industry has been published by Textile World magazine.
This first part features a general industry overview, plus an evaluation of the status and impact of US trade positions.
The second part, featured in the April/May issue will cover major end markets for technical textiles such as automotive and military.
Click here to go to the Textile World website to download a copy.
Steve Warner, Publisher
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