According to its website, “The Office of the U.S. Trade Representative (USTR) is responsible for developing and coordinating U.S. international trade, commodity, and direct investment policy, and overseeing negotiations with other countries. The head of USTR is the U.S. Trade Representative, a cabinet member who serves as the President’s principal trade advisor, negotiator, and spokesperson on trade issues.” On March 31, Representative Katherine Tai’s office released its 2022 National Trade Estimate Report on Foreign Trade Barriers.
This is the 37th year that this report has been published. It reviews foreign barriers to U.S. exports of goods and services, U.S. direct investment, and U.S. electronic commerce in sixty-four key foreign markets that account for ninety-nine percent of U.S. goods trade and eighty-five percent of U.S. services trade. According to Representative Tai, “The 2022 NTE Report identifies a range of important challenges and priorities to guide the Biden Administration’s effort to craft trade policy that reflects our country’s values and builds a better America.” Many of these barriers in foreign markets have existed for many years, while others reflect the digital age that we now live in.
Barriers in agricultural sectors continue to be an issue for U.S. companies attempting to export their products to foreign markets. The USTR report cites countries such as China and Indonesia for implementing “opaque and burdensome facility registration requirements” that make it difficult for U.S. dairy and meat products to enter those markets. It also states that countries such as Turkey require sanitary and phytosanitary regulations that are not based on science, which are an obstacle to U.S. exports to that country.
In terms of industrial policies, the report highlights interventionist and discriminatory policies that China implements to stifle foreign competitors in that country, in order to carry out its state-led, non-market approach to its economy and trade. Recently, China appears to have increased its efforts in the high-technology and advanced manufacturing areas. This part of the report comes as no surprise, as American companies have complained for years that China has been intentionally keeping them out of key markets and stealing their technologies and intellectual property.
Digital trade barriers are also highlighted in the report, as the USTR cites restrictive data policies in China, India, Indonesia, South Korea, Russia, Turkey, and Vietnam. It provides the example of proposed policies in India that require the localization requirements and restrictions on cross-border data flow. The European Union’s technological sovereignty and digital sovereignty are also mentioned as measures that promote unfair competition for U.S. companies.
While technical regulations or conformity assessment are policies that the report states can be legitimately applied to enforce issues such as safety, they are often used as overt barriers in keeping foreign competitors out of the marketplace. It mentions Mexico and Panama as using these regulations in their quest to keep foreign cheese, potatoes, and onions out of their markets. Egypt is noted as taking an extraordinary time frame to register trademarks and foreign production plants in that nation.
I remember reading when I was in college about a U.S. ski manufacturer that was attempting to break into Japan. The Japanese government required that the skis have their testing and safety certification done before they could be sold in Japan. Time after time the company sent its testing results with no success. Exasperated, the company appealed directly to the Japanese government and was finally told that even though the company had tests conducted in countries around the world, the skis had not been tested on Japanese snow, which supposedly could be different from snow in other parts of the world. This is an extreme example of how technical requirements are blatantly used to keep foreign competition out.
Labor is another sector of the report that impedes trade for U.S. companies. It cites forced labor and human rights abuses by China in its Xinjiang Uyghur region. These particular abuses have been in the news for the past several years. In Latin America, it lists barriers to trade such as unacceptable work conditions, child labor, collective bargaining, and forced labor in countries such as the Dominican Republic, Honduras, Guatemala, and Peru. Child labor, which was a hot topic of discussion 20 years ago, seems to have faded into the background, although this practice continues to exist, particularly in many developing countries.
While a lot of progress in eradicating barriers to trade has been made in the last thirty years, it is clear from the report that a lot of work still needs to be done in order to make sure that U.S. companies are given a fair shake when entering many foreign markets.
