2023 Trade Policy Agenda 2022 Annual Report

2023 Trade Policy Agenda

AND

2022 Annual Report

of the

President

of the

United States

on the

Trade Agreements Program

United States Trade Representative

HHHHHHHHHHHHH

FOREWORD

The 2023 Trade Policy Agenda and 2022 Annual Report of the President of the United States on the Trade

Agreements Program are submitted to the Congress pursuant to Section 163 of the Trade Act of 1974, as

amended (19 U.S.C. § 2213). Chapter IV and Annex III of this document meet the requirements of Sections

122 and 124 of the Uruguay Round Agreements Act with respect to the World Trade Organization. This

report includes an annex listing trade agreements entered into by the United States since 1984. This report

also includes an annex on U.S. trade in 2022, for which goods trade data by country are for full year 2022

and full-year services data by country are for 2021 (latest data available).

The Office of the United States Trade Representative (USTR) is responsible for the preparation of this

document and gratefully acknowledges the contributions of all USTR staff to its writing and production.

We note, in particular, the contributions of Laura Buffo, Teresa Howes, Daniel Leibowitz, Amy Morris,

and Andrew O’Neil. Appreciation is extended to partner Trade Policy Staff Committee agencies.

March 2023

LIST OF FREQUENTLY USED ACRONYMS

AD ................................................................................ Antidumping

AfCFTA ....................................................................... African Continental Free Trade Area

AGOA .......................................................................... African Growth and Opportunity Act

APEC ........................................................................... Asia-Pacific Economic Cooperation

APEP ............................................................................ American Partnership for Economic Prosperity

ASEAN ........................................................................ Association of Southeast Asian Nations

CAFTA-DR.................................................................. Dominican Republic–Central America–United

States Free Trade Agreement

CBERA ........................................................................ Caribbean Basin Economic Recovery Act

CBI ............................................................................... Caribbean Basin Initiative

CBP .............................................................................. U.S. Department of Homeland Security Customs

and Border Protection

CVD ............................................................................. Countervailing Duty

DOL ............................................................................. U.S. Department of Labor

DSB .............................................................................. WTO Dispute Settlement Body

DSU ............................................................................. WTO Dispute Settlement Understanding

DST .............................................................................. Digital Services Tax

EU ................................................................................ European Union

FOIA ............................................................................ Freedom of Information Act

GATT ........................................................................... General Agreement on Tariffs and Trade

GATS ........................................................................... General Agreement on Trade in Services

GDP ............................................................................. Gross Domestic Product

GI ................................................................................. Geographical Indication

GPA ............................................................................. WTO Agreement on Government Procurement

GSP .............................................................................. Generalized System of Preferences

ICTIME ........................................................................ Interagency Center on Trade Implementation,

Monitoring, and Enforcement

ILO ............................................................................... International Labor Organization

IP .................................................................................. Intellectual Property

IPEF ............................................................................. Indo-Pacific Economic Framework for Prosperity

ITA ............................................................................... WTO Information Technology Agreement

KORUS ........................................................................ United States–Korea Free Trade Agreement

MENA .......................................................................... Middle East and North Africa

MFN ............................................................................. Most-Favored-Nation

MOU ............................................................................ Memorandum of Understanding

NAFTA ........................................................................ North American Free Trade Agreement

OECD ........................................................................... Organization for Economic Cooperation and

Development

SBA .............................................................................. U.S. Small Business Administration

SCM ............................................................................. WTO Agreement on Subsidies and Countervailing

Measures

SME ............................................................................. Small and Medium-Sized Enterprise

SPS ............................................................................... Sanitary and Phytosanitary

TAA ............................................................................. Trade Adjustment Assistance

TBT .............................................................................. Technical Barriers to Trade

TFA .............................................................................. WTO Trade Facilitation Agreement

TIFA ............................................................................. Trade and Investment Framework Agreement

TPRG ........................................................................... Trade Policy Review Group

TPSC ............................................................................ Trade Policy Staff Committee

TRIMS ......................................................................... Trade-Related Investment Measures

TRIPS ........................................................................... Trade-Related Aspects of Intellectual Property

Rights

TRQ ............................................................................. Tariff-Rate Quota

USAID ......................................................................... U.S. Agency for International Development

USITC .......................................................................... U.S. International Trade Commission

USMCA ....................................................................... United States–Mexico–Canada Agreement

USTR ........................................................................... United States Trade Representative

WTO ............................................................................ World Trade Organization

TABLE OF CONTENTS

THE PRESIDENT’S 2023 TRADE POLICY AGENDA ........................................................................ 1

I. INTRODUCTION ............................................................................................................................... 1

II. ADVANCING A WORKER-CENTERED TRADE POLICY ...................................................... 2

A. Standing up for Workers’ Rights .................................................................................................... 2

B. Accelerating Decarbonization and Promoting Sustainable Environmental Practices ..................... 5

C. Supporting U.S. Agriculture ............................................................................................................ 8

D. Bolstering Supply Chain Resilience ................................................................................................ 9

III. RE-ALIGNING THE U.S.-CHINA TRADE RELATIONSHIP ............................................... 10

IV. ENGAGING WITH KEY TRADING PARTNERS AND MULTILATERIAL

INSTITUTIONS ................................................................................................................................... 11

A. Indo-Pacific Economic Framework for Prosperity ....................................................................... 12

B. Americas Partnership for Economic Prosperity ............................................................................ 13

C. World Trade Organization ............................................................................................................. 13

D. Asia-Pacific Economic Cooperation ............................................................................................. 14

E. Organization for Economic Co-operation and Development ........................................................ 15

F. Bilateral Initiatives ......................................................................................................................... 15

1. European Union ........................................................................................................................ 15

2. Taiwan ....................................................................................................................................... 16

3. Kenya ......................................................................................................................................... 16

4. India ........................................................................................................................................... 17

5. Japan ......................................................................................................................................... 17

6. Korea ......................................................................................................................................... 17

7. Singapore ................................................................................................................................... 18

8. United Kingdom ......................................................................................................................... 18

9. African Continental Free Trade Area ........................................................................................ 18

V. PROMOTING CONFIDENCE IN TRADE POLICY THROUGH ENFORCEMENT ........... 19

VI. PROMOTING EQUITABLE, INCLUSIVE, AND DURABLE TRADE POLICY AND

EXPANDING STAKEHOLDER ENGAGEMENT .......................................................................... 20

A. Promoting Equitable, Inclusive, and Durable Trade Policy .......................................................... 20

B. Engagement and Consultation with Partners and Stakeholders .................................................... 21

THE 2022 ANNUAL REPORT OF THE PRESIDENT ON THE TRADE AGREEMENTS

PROGRAM ................................................................................................................................................. 1

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES ................................................. 1

A. New Trade Initiatives ........................................................................................................................ 1

1. Indo-Pacific Economic Framework for Prosperity (Pillar I: Trade) ............................................... 1

2. United States–Taiwan Initiative on 21st-Century Trade .................................................................. 1

3. United States–Kenya Strategic Trade and Investment Partnership .................................................. 2

4. United States–European Union Trade and Technology Council ..................................................... 2

5. Americas Partnership for Economic Prosperity ............................................................................... 3

6. African Continental Free Trade Area Memorandum of Understanding .......................................... 4

B. Free Trade Agreements in Force ...................................................................................................... 4

1. Australia ........................................................................................................................................... 4

2. Bahrain ............................................................................................................................................. 4

3. Central America and the Dominican Republic ................................................................................ 5

4. Chile ............................................................................................................................................... 11

5. Colombia ........................................................................................................................................ 11

6. Israel ............................................................................................................................................... 13

7. Jordan ............................................................................................................................................. 13

8. Korea .............................................................................................................................................. 15

9. Mexico and Canada ........................................................................................................................ 15

10. Morocco ....................................................................................................................................... 18

11. Oman ............................................................................................................................................ 19

12. Panama ......................................................................................................................................... 19

13. Peru .............................................................................................................................................. 20

14. Singapore ..................................................................................................................................... 22

C. Other Agreements and Trade-Related Initiatives ........................................................................ 22

1. The Americas ................................................................................................................................. 22

2. Europe and the Middle East ........................................................................................................... 24

3. Japan, Republic of Korea, and the Asia-Pacific Economic Cooperation Forum ........................... 27

4. China, Hong Kong, Taiwan, and Mongolia ................................................................................... 29

5. Southeast Asia and the Pacific ....................................................................................................... 30

6. Sub-Saharan Africa ........................................................................................................................ 32

7. South and Central Asia .................................................................................................................. 34

D. Preference Programs ....................................................................................................................... 35

1. Generalized System of Preferences ................................................................................................ 35

2. African Growth and Opportunity Act ............................................................................................ 36

3. Haitian Hemispheric Opportunity Through Partnership Encouragement Act ............................... 38

4. Nepal Trade Preference Program ................................................................................................... 38

5. Caribbean Basin Initiative .............................................................................................................. 38

II. TRADE ENFORCEMENT ACTIVITIES ........................................................................................ 41

A. Overview ........................................................................................................................................... 41

B. Section 301 ........................................................................................................................................ 43

1. China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and

Innovation .......................................................................................................................................... 44

i. United States–China Economic and Trade Agreement .............................................................. 46

ii. Product Exclusions .................................................................................................................... 46

2. European Union – Measures Concerning Meat and Meat Products (Hormones) .......................... 47

3. Digital Services Taxes ................................................................................................................... 49

i. France Digital Services Taxes ............................................................................................... 49

ii. Other Digital Services Taxes ................................................................................................ 49

4. Enforcement of U.S. WTO Rights in European Union Large Civil Aircraft Dispute.................... 54

5. Vietnam’s Acts, Policies, and Practices Related to the Import and Use of Illegal Timber ............ 56

6. Vietnam’s Acts, Policies, and Practices Related to Currency Valuation ....................................... 57

C. Section 201 ........................................................................................................................................ 58

D. WTO and FTA Enforcement .......................................................................................................... 59

E. Other Monitoring and Enforcement Activities ........................................................................... 112

1. Preference Programs Monitoring and Enforcement ..................................................................... 112

2. Special 301 ................................................................................................................................... 115

3. Section 1377 Review of Telecommunications Agreements ........................................................ 117

4. Section 337 ................................................................................................................................... 117

5. Antidumping Actions ................................................................................................................... 119

6. Countervailing Duty Actions ....................................................................................................... 120

7. Subsidies Monitoring and Other Antidumping and Countervailing Duty Enforcement .............. 121

III. OTHER TRADE ACTIVITIES ...................................................................................................... 123

A. Promoting Equitable, Inclusive and Durable Trade Policy and Expanding Stakeholder

Engagement ......................................................................................................................................... 123

1. Overview of Intersectional and Interconnected Strategies and Actions ....................................... 123

2. Advancing Racial Equity and Support for Underserved Communities ....................................... 124

3. Advancing Gender Equity and Equality and Women’s Economic Empowerment in Trade Policy

.......................................................................................................................................................... 127

4. Strengthening Data to Consider and Improve the Distributional Effects of Trade ...................... 131

5. Expanded and Consistent Inclusive Engagement......................................................................... 132

B. Small and Medium-Sized Enterprise Initiative ........................................................................... 133

C. Agriculture and Trade .................................................................................................................. 137

1. Opening Export Markets for American Agriculture .................................................................... 137

2. Bilateral and Regional Activities ................................................................................................. 141

3. Agriculture in the World Trade Organization .............................................................................. 145

4. Enforcing Trade Agreements for American Agriculture ............................................................. 146

D. Digital Trade and Services ............................................................................................................ 146

E. Intellectual Property ...................................................................................................................... 147

F. Manufacturing and Trade ............................................................................................................. 149

G. Trade and the Environment ......................................................................................................... 151

1. Free Trade Agreements and Bilateral Activities .......................................................................... 152

2. Regional, Multilateral, and International Organization Engagement........................................... 158

H. Trade and Labor ........................................................................................................................... 159

1. Free Trade Agreements and Bilateral Activities .......................................................................... 160

2. Preference Programs .................................................................................................................... 165

3. Regional, Multilateral, and International Organization Engagement........................................... 166

4. Combating Forced Labor in Global Supply Chains ..................................................................... 168

5. Trade Adjustment Assistance ....................................................................................................... 170

I. Trade Capacity Building ................................................................................................................ 172

1. The Enhanced Integrated Framework .......................................................................................... 172

2. U.S. Trade-Related Assistance under the World Trade Organization Framework ...................... 172

3. Trade Capacity Building Initiatives for Africa ............................................................................ 174

4. Free Trade Agreements ................................................................................................................ 175

5. Standards Alliance ....................................................................................................................... 175

J. Organization for Economic Cooperation and Development ...................................................... 176

1. Trade Committee Work Program ................................................................................................. 176

2. Trade Committee Dialogue with Non-OECD Members .............................................................. 177

3. Other OECD Work Related to Trade ........................................................................................... 178

IV. THE WORLD TRADE ORGANIZATION ................................................................................... 179

A. Introduction ................................................................................................................................... 179

B. WTO Negotiations and Dialogues ................................................................................................ 180

1. Joint Statement Initiatives ............................................................................................................ 180

2. Other Negotiations ....................................................................................................................... 182

C. General Council Activities ............................................................................................................ 183

D. Council for Trade in Goods .......................................................................................................... 184

1. Committee on Agriculture............................................................................................................ 184

2. Committee on Antidumping Practices ......................................................................................... 185

3. Committee on Customs Valuation ............................................................................................... 185

4. Committee on Import Licensing .................................................................................................. 185

5. Committee on Market Access ...................................................................................................... 186

6. Committee on Rules of Origin ..................................................................................................... 186

7. Committee on Safeguards ............................................................................................................ 186

8. Committee on Sanitary and Phytosanitary Measures ................................................................... 187

9. Committee on Subsidies and Countervailing Measures ............................................................... 187

10. Committee on Technical Barriers to Trade ................................................................................ 188

11. Committee on Trade Facilitation ............................................................................................... 188

12. Committee on Trade-Related Investment Measures .................................................................. 189

13. Committee on Participants on the Expansion of Trade in Information Technology Products ... 189

14. Working Party on State Trading Enterprises.............................................................................. 189

E. Council for Trade-Related Aspects of Intellectual Property Rights ......................................... 190

F. Council for Trade in Services........................................................................................................ 190

1. Committee on Trade in Financial Services .................................................................................. 191

2. Working Party on Domestic Regulation, and Joint Statement Initiative on Services Domestic

Regulation ........................................................................................................................................ 191

3. Working Party on General Agreement on Trade in Services Rules ............................................. 191

4. Committee on Specific Commitments ......................................................................................... 191

G. Other General Council Bodies and Activities ............................................................................. 191

1. Committee on Trade and Environment ........................................................................................ 191

2. Committee on Trade and Development ....................................................................................... 192

3. Committee on Balance-of-Payments Restrictions ........................................................................ 193

4. Committee on Budget, Finance and Administration .................................................................... 193

5. Committee on Regional Trade Agreements ................................................................................. 193

6. Accessions to the World Trade Organization .............................................................................. 194

7. Working Group on Trade, Debt and Finance ............................................................................... 195

8. Working Group on Trade and Transfer of Technology ............................................................... 195

9. Work Program on Electronic Commerce ..................................................................................... 196

H. Dispute Settlement Understanding .............................................................................................. 196

I. Trade Policy Review Body ............................................................................................................. 198

J. Plurilateral Agreements ................................................................................................................. 200

1. Committee on Trade in Civil Aircraft .......................................................................................... 200

2. Committee on Government Procurement ..................................................................................... 200

3. Information Technology Agreement Committee ......................................................................... 201

V. TRADE POLICY DEVELOPMENT ............................................................................................... 203

A. Policy Coordination ....................................................................................................................... 203

B. Transparency and Public Input .................................................................................................... 204

1. Transparency ................................................................................................................................ 204

2. Public Outreach ............................................................................................................................ 205

3. The Trade Advisory Committee System ...................................................................................... 206

4. Tribal, State and Local Government Relations ............................................................................ 209

5. Freedom of Information Act ........................................................................................................ 210

C. Congressional Consultations......................................................................................................... 210

ANNEX I: U.S. TRADE IN 2022.......................................................................................................... 213

I. 2022 Overview ................................................................................................................................. 215

II. Exports ........................................................................................................................................... 217

A. U.S. Goods Exports ..................................................................................................................... 218

B. U.S. Services Exports .................................................................................................................. 219

III. Imports .......................................................................................................................................... 219

A. U.S. Goods Imports ..................................................................................................................... 219

B. U.S. Services Imports .................................................................................................................. 221

IV. The U.S. Trade Balance ............................................................................................................... 222

ANNEX II: U.S. TRADE-RELATED AGREEMENTS AND DECLARATIONS........................... 223

I. Agreements That Have Entered Into Force.................................................................................. 225

II. Agreements That Have Been Negotiated, But Have Not Yet Entered Into Force ................... 253

III. Other Trade-Related Agreements, Understandings and Declarations ................................... 255

ANNEX III : BACKGROUND INFORMATION ON THE WTO ................................................... 269

THE PRESIDENT’S

2023 TRADE POLICY AGENDA

THE PRESIDENT’S 2023 TRADE POLICY AGENDA | 1

THE PRESIDENT’S TRADE POLICY AGENDA

I. INTRODUCTION

The Biden Administration promised to build the economy from the bottom up and the middle out, and we

are doing just that. Unemployment is at its lowest rate in over 50 years. This Administration has seen more

jobs created in two years than any other Administration has seen in four. Manufacturing is rebounding

faster than it has in almost 40 years, while wages are rising, and rising even faster for lower- and middle-

income workers. The American Rescue Plan, the Bipartisan Infrastructure Law, the CHIPS and Science

Act, and the Inflation Reduction Act were historic investments in America, and they are working.

The Biden Administration continues to believe that trade can—and should—be a force for good. Done

right, and in coordination with other policy disciplines, it can grow the middle class, address inequality,

tackle the climate crisis, and level the playing field by promoting fair competition. We remain committed

to upholding a fair and open global trading system—one that puts working families first, raises living

standards, ensures full employment, and promotes sustainable development.

We are continuing to rewrite the story on trade by bringing more people into the process and developing

policies and initiatives that are resilient and sustainable and create broad-based growth. In 2023, our trade

agenda will continue to focus on unlocking new opportunities for American workers and families—while

also supporting and strengthening the middle class, driving decarbonization, and creating good-paying jobs

across the American economy. In the aftermath of the COVID-19 pandemic and Russia’s brutal, illegal

attack on Ukraine, it also means fortifying relationships with our partners and allies and strengthening

critical supply chains to withstand shocks and disruptions to the system and to defend democratic values.

To realize this vision, we are continuing to forge the partnerships necessary to update and enforce the rules

governing the global economy and trade.

In the Indo-Pacific and the Western Hemisphere, the United States is leading with a positive economic

vision through the Indo-Pacific Economic Framework for Prosperity and the Americas Partnership for

Economic Prosperity. With the European Union, we continue to deepen our relationship and intensify

cooperation on pressing challenges, such as the People’s Republic of China’s (PRC) non-market policies

and practices. Further, we are intensifying negotiations on a first-of-its-kind trade arrangement to address

non-market excess capacity and the greenhouse gas emissions of imported steel and aluminum. We are

also continuing to build out the Trade and Technology Council, and the Trade and Labor Dialogue under

its umbrella, to pursue shared priorities, including supply chain resilience, challenges posed by non-market

economies, inclusive digital trade, and the elimination of forced labor.

Additionally, in 2022, we kicked off ambitious initiatives with Taiwan and Kenya to deepen our trade and

economic relationships with both partners, and we aim to make rapid progress on both initiatives in 2023.

At the World Trade Organization (WTO), after working with WTO Members to deliver key outcomes

during the Twelfth Ministerial Conference, the United States is driving the conversation on transforming

the institution to be more responsive to the rapidly changing global economic environment and to the needs

of everyday people.

Moreover, following the successful U.S. Africa Leaders Summit last year, the Administration will continue

to strengthen our partnerships with the African continent and to support regional and continental integration

efforts, with the well-being of workers, women, and youth to inform our work.

2 | THE PRESIDENT’S 2023 TRADE POLICY AGENDA

Our Administration is also fully committed to continued enforcement of our existing trade agreements to

hold our trading partners accountable. This includes utilizing the United States-Mexico-Canada

Agreement’s Rapid Response Mechanism to raise labor standards across North America and drive a race

to the top. We are also using other mechanisms to open, maintain, and enhance access to markets and

address unfair trade practices that harm our workers and businesses and ensure that they enjoy the benefits

that they were promised.

Finally, a vital element of our effort to build an inclusive trade policy agenda is understanding the effects

of our policies on underrepresented and underserved workers and communities, and ensuring that they have

a say in how our policies are designed and implemented going forward. We know that an important part

of making trade work for all Americans is having a better understanding of the effects of past trade policies.

At the Administration’s request, the United States International Trade Commission (USITC) conducted a

first-of-its-kind study of the distributional effects of goods and services trade and trade policy on U.S.

workers. Through an extensive information gathering process, the investigation brought to light what many

already knew: while trade has benefited many, devastating effects have been concentrated in certain

communities. The report also illustrated the gaps around data, and particularly disaggregated data, that can

further inform a more equitable trade policy. USTR will continue working with the USITC and other

partners to design trade policy that addresses inequality and supports the goals and aspirations of all

Americans. USTR will also continue to implement its Equity Action Plan to ensure that racial and gender

equity is embedded in its ecosystem.

By placing workers and everyday people at the center of our trade policy, the Biden Administration will

continue to use trade as a force for good, to build a durable and fair tomorrow by pursuing resilience,

sustainability, and inclusive prosperity.

II. ADVANCING A WORKER-CENTERED TRADE POLICY

A. Standing up for Workers’ Rights

Trading partners should compete on the merits, not on the basis of exploitation. Through the Biden

Administration’s efforts to promote fair competition, we will continue to level the playing field for

American workers. One of the Administration’s top priorities is effective enforcement of the United States-

Mexico-Canada Agreement (USMCA). The USMCA includes the strongest labor provisions in any trade

agreement ever, as well as a ground-breaking enforcement tool, the rapid response mechanism (RRM). The

RRM allows the United States to quickly take action and target specific facilities in Mexico where workers

are being denied their rights to freedom of association and collective bargaining.

From March 2022 through February 2023, the United States successfully used the mechanism to secure

concrete wins for workers at four different facilities.

In April 2022, Mexican labor union Sindicato Nacional Independiente de Trabajadores de Industrias y de

Servicios Movimiento 20/32 (SNITIS) and a U.S.-based policy organization filed an RRM petition

concerning Panasonic Automotive Systems, an automotive parts producer in Reynosa, Mexico. The

petition alleged that workers at the Reynosa facility were being denied the right of free association and

collective bargaining. At the United States’ request, the facility took several actions, including renouncing

a collective bargaining agreement it had signed with a union that lacked lawful bargaining authority;

reimbursing workers for dues the company had deducted from workers’ paychecks on that union’s behalf;

offering reinstatement and backpay to twenty-six workers who were allegedly terminated for participating

in union activity; and reimbursing workers for wages unpaid as a result of a work stoppage at the facility.

THE PRESIDENT’S 2023 TRADE POLICY AGENDA | 3

SNITIS has since won a representation election at the facility and negotiated a collective bargaining

agreement that includes a substantial wage increase.

In May 2022, the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW),

the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), and Sindicato

Nacional de Trabajadores Mineros, Metalúrgicos, Siderúgicos y Similares de la República Mexicana

(SNTMMSSRM) filed an RRM petition concerning Teksid Hierro, an automotive parts producer in

Frontera, Mexico. The petition alleged that workers at the Teksid Hierro automotive parts facility were

being denied the right of free association and collective bargaining. The facility took several actions,

including providing access to the facility for the purpose of carrying out worker representation, paying

union dues withheld from workers and owed to the independent union, and reinstating and offering back

pay to thirty-six workers. SNTMMSSRM has since prevailed in a union representational challenge and

continues to represent workers at the facility for purposes of bargaining.

In June 2022, La Liga Sindical Obrera Mexicana (LSOM), an independent Mexican union, and Comité

Fronterizo de Obreras, a labor organization, filed an RRM petition alleging that workers at the VU

automotive components facility in Piedras Negras were being denied the right of free association and

collective bargaining. As a result of the review, the Government of Mexico and the company took several

actions that remediated identified issues, including educating workers on their rights, providing training to

company personnel, facilitating a written commitment from the employer to remain neutral in a future union

representation election, and holding a supervised union representation election on August 31, 2022, in

which VU workers voted in favor of LSOM. Despite this facility taking positive actions in 2022, there

appears to be backsliding and new denials of rights at the facility. Therefore, on January 30, 2023, the

United States asked Mexico to conduct a second review.

In September 2022, the AFL-CIO, United Steelworkers, and Sindicato Independiente de las y los

Trabajadores Libres y Democráticos de Saint Gobain México, a Mexican union, filed an RRM petition

regarding the Saint Gobain México, S.A. de C.V. Nicolas Bravo 8, a facility in Cuautla, Mexico that exports

automotive glass. The petition contained allegations regarding denials of workers’ rights of free association

and collective bargaining pertaining to a collective bargaining agreement approval vote in July 2022 and

an upcoming vote to determine which union would represent the workers in collective bargaining agreement

negotiations. Workers at the facility elected a new, independent union to represent them in collective

bargaining agreement negotiations, which contributed to the resolution of the concerns in the petition and

resulted in another historic win for workers.

These five actions show that we can work with trading partners to promote workers’ rights and workplace

democracy and form a strong foundation for our ongoing work to advance labor rights in 2023. USTR,

working with the U.S. Department of Labor and other agencies that make up the USMCA Interagency

Labor Committee for Monitoring and Enforcement, will continue to support workers and work with the

Government of Mexico to closely monitor situations that may involve violations of workers’ rights.

In addition to our work under the USMCA, the Administration undertook several efforts that will provide

the foundation for further action in 2023 to advance workers’ rights and raise labor standards to create

sustainable growth, including on addressing forced labor.

 On January 25, 2022, USTR announced that it will develop its first-ever focused trade strategy to

combat forced labor. Following that announcement, on July 6, 2022, USTR published a Federal

interagency review of USTR’s existing trade policies and tools to combat forced labor, to determine

areas that may need strengthening, and to identify gaps that need to be filled. USTR will use this

analysis to establish objectives, priorities, new tools, and key action items to advance development

4 | THE PRESIDENT’S 2023 TRADE POLICY AGENDA

of the strategy. The strategy will bring attention to the U.S. Government toolkit to combat forced

labor, which has been cultivated over the last twenty-five years to prevent this harmful practice, as

well as to protect and provide appropriate remedies for those affected by forced labor, through trade

policy and engagement. As part of the Administration’s commitment to inclusive trade policy

development, USTR has sought to maximize input from stakeholders, including labor

organizations, civil society, survivors of forced labor and human trafficking, and the private sector.

 In September 2022, the G7 Trade Ministers reiterated their joint commitment to use trade policy to

combat forced labor and build upon the 2021 G7 Trade Ministers’ Statement on Forced Labor

expressing their shared interest in tackling forced labor and child labor in global supply chains.

The United States will continue to work with our trading partners through multilateral fora to

highlight, and spur progress on, the scourge of forced labor.

 In addition to our work in the G7, the Administration is working bilaterally with trading partners

to address forced labor in supply chains. In September 2022, we launched the Trade and Labor

Dialogue with the European Union. Through this new mechanism, we are convening labor,

business, and government representatives from both sides of the Atlantic to focus on eliminating

forced labor in global supply chains and understanding the impacts of digital trade on workers. In

January 2023, the United States also signed a Memorandum of Cooperation with Japan to launch a

Task Force on the Promotion of Human Rights and International Labor Standards in Supply Chains

under the U.S.-Japan Partnership on Trade.

 Since the Uyghur Forced Labor Prevention Act was enacted on December 23, 2022, as a member

of the U.S. Department of Homeland Security-led (DHS) Forced Labor Enforcement Task Force

(FLETF), USTR continues to work with DHS to monitor and block the importation of goods made

in whole, or in part, with forced labor. As a result, on June 17, 2022, the FLETF published the

Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced

Labor in the People’s Republic of China, which demonstrates our Administration’s commitment to

fully enforce our laws prohibiting the import of goods made by forced labor. It also highlights our

resolve to fight against the economic exploitation and human rights abuses committed against

Uyghurs and other ethnic and religious minorities in the People’s Republic of China (PRC).

 Eliminating forced labor will also require cooperation and leadership from the private sector. In

July 2021, the United States issued an updated advisory for U.S. businesses whose supply chains

run through the Xinjiang Uyghur Autonomous Region, China, where the PRC and associated

enterprises continue to subject Uyghurs and other ethnic and religious minorities to forced labor.

Signatory agencies of the advisory regularly engage with the private sector on this guidance. The

United States will continue to work with industry to rid supply chains of forced labor and hold bad

actors accountable.

The Biden Administration is also bringing its worker-centered trade policy and commitment to fair

competition to other multilateral fora and to bilateral discussions.

During 2022, the United States continued to support including labor issues in the next generation of trade

agreements by the Asia-Pacific Economic Cooperation (APEC) economies. To further this goal, USTR

established an APEC work program in the Committee on Trade and Investment examining the importance

of multi-stakeholder engagement in trade policy and proposed a project on labor-related technical assistance

and capacity building provisions in regional trade arrangements and free trade agreements. In addition, the

United States supported efforts to promote the importance of multi-stakeholder engagement and hosted an

APEC Economic Committee Panel on Tripartism based on an APEC policy report on the Future of Work.

THE PRESIDENT’S 2023 TRADE POLICY AGENDA | 5

As the host of the APEC this year, the United States will build on this progress and work with other APEC

economies to drive the conversation on making trade work for workers, consumers, and businesses

throughout our region.

In March 2022, USTR and the Association of Southeast Asian Nations (ASEAN) organized the second

United States–ASEAN Trade and Labor Dialogue. The dialogue focused on inclusive approaches to trade

and economic recovery, improving working conditions and business competitiveness, and workforce

development and labor protections in a digital era. Further, USTR continued to support U.S. Government

efforts to address forced labor associated with fishing, including in the context of work with ASEAN

governments, industry, and other stakeholders.

The United States continues to call upon other regional and multilateral organizations to consider how they

can more effectively hear from workers and be relevant in addressing the needs of regular people. In 2023

and beyond, the United States will continue advocating for workers’ rights on the world stage and

collaborating with our partners and allies to improve outcomes for workers across the globe.

B. Accelerating Decarbonization and Promoting Sustainable Environmental

Practices

Combating the climate crisis and promoting environmentally sustainable practices continue to be top

priorities for the Biden Administration. Trade is an indispensable tool to achieve these goals. In 2023, the

United States will continue to use a range of available tools, including new and existing trade initiatives, to

seek higher levels of environmental protection from our trading partners and promote decarbonization

efforts necessary to limit global temperature increase to 1.5 degrees Celsius.

New Agreements and Approaches to Advance Our Climate Goals and Protect the Environment

Collaborating with key trading partners to forge new partnerships and create new approaches is critical to

promote a sustainable trade agenda.

In October 2021, the United States and the EU launched negotiations on the world’s first emissions-based

sectoral arrangement on steel and aluminum trade, known as the Global Arrangement on Sustainable Steel

and Aluminum (Global Arrangement). This will be a paradigm-shifting model that drives decarbonization

while limiting anti-competitive and non-market practices that contribute to worldwide excess capacity. It

will drive investment in green steel and aluminum production in the United States, Europe, and around the

world, reducing emissions in two of the most carbon-intensive industrial sectors and ensuring a competitive

U.S. steel and aluminum industry for decades to come.

In 2023, we will intensify our work to conclude negotiations of the Global Arrangement. This arrangement

will be proof that trade policy is an important part of our climate agenda, and that effective climate action

can—and must—support good-paying, quality jobs.

Another example is our work with Canada on solar panels. In July 2022, the United States and Canada

signed a memorandum of understanding to settle a dispute on trade in solar products under the USMCA.

The MOU also contains a mechanism to ensure that solar product imports from Canada do not undermine

the effectiveness of the existing U.S. safeguard measure on imports of solar products. In 2023, we will use

this MOU to promote greater deployment of solar energy in the United States using products from one of

our closest allies, and foster a more resilient North American supply chain for clean energy products made

without forced labor.

6 | THE PRESIDENT’S 2023 TRADE POLICY AGENDA

Through regional engagements, such as the Indo-Pacific Economic Framework for Prosperity (IPEF) and

the Americas Partnership for Economic Prosperity (Americas Partnership), and our bilateral negotiations

with Kenya and Taiwan, we will pursue opportunities to maintain and improve levels of environmental

protection of our trading partners and increase climate ambition, including to decarbonize our respective

economies. We will seek commitments by our trading partners that will enable and mobilize the

technologies, public and private investment, and technical resources needed to scale up clean energy

infrastructure and facilitate trade in climate-friendly goods, services, and technologies, while generating

high-quality jobs that power economic growth and advance progress toward the goals of the Paris

Agreement commitments.

Additionally, in 2023, the United States will continue to advance our priorities on trade and environment

under the U.S.-EU TTC. This will include continuing work to scope the recently-launched Transatlantic

Initiative on Sustainable Trade, in particular to advance our respective priorities to address the climate crisis

and create a resilient, sustainable, and inclusive trade agenda.

The United States will also continue working to address unsustainable and illegal, unreported, and

unregulated (IUU) fishing practices that are destroying the marine ecosystem. For decades, IUU fishing

has been a global problem affecting ocean ecosystems, threatening economic and food security, and putting

law-abiding fishermen and seafood producers at a disadvantage. The United States has been a leader in

combating IUU fishing and, through implementation of our National Strategy for Combating Illegal,

Unreported, and Unregulated Fishing, we will continue to work to curtail the global trade in seafood and

seafood products derived from IUU fishing and promote global maritime security. We will also enhance

existing activities with new initiatives to form a comprehensive set of actions to address IUU fishing and

associated forced labor, including working to prevent importation of IUU fish and fish products or those

associated with forced labor.

Additionally, in June 2022, we worked with other WTO Members to conclude the Agreement on Fisheries

Subsidies, the first ever multilateral trade agreement with the environment at its core. The Agreement

prohibits subsidies to vessels or operators engaged in IUU fishing, for fishing overfished stocks, and for

fishing on the unregulated high seas. Further, the Agreement contains strong transparency provisions that

will add significant understanding of the universe of fish subsidies. The Biden Administration will work

with other Members to both bring this new Agreement into force and to continue negotiations to build on

this Agreement with additional disciplines on subsidies that contribute to overfishing and overcapacity and

to enhance transparency related to forced labor on fishing vessels.

The United States also seeks to continue to protect our shared environment, including oceans and marine

resources, and those whose livelihoods depend on them, from the harm caused by plastic pollution. In

2022, the United States supported the launch of multilateral negotiations for an international agreement on

ocean plastic pollution. In 2023, we will continue this effort, recognizing the role that trade plays as both

a contributor to the problem of plastic pollution, and its potential to serve as an important part of the

solution.

Further, the United States will continue to support and promote more resource-efficient and circular

economy approaches in other international fora, including the WTO’s Committee on Trade and

Environment and the Trade and Environmental Sustainability Structured Discussions, and at the

Organization for Economic Co-operation and Development (OECD).

The environment will also be a priority during our APEC host year this year, under the theme of “Creating

a Resilient and Sustainable Future for All.” APEC 2023 provides the United States a unique opportunity

THE PRESIDENT’S 2023 TRADE POLICY AGENDA | 7

to promote efforts that advance APEC economies’ contributions to addressing environmental and climate

challenges.

For example, we are leading a Recyclable Materials Policy Program (RMPP) under the Committee on Trade

and Investment. Under this program, the United States will host a workshop on compostable bioplastics

and will continue to support and expand the work of the RMPP to help develop the capacity of APEC

economies to identify and frame domestic policies that promote solid waste management and recycling

infrastructure. In 2023, we will also further APEC work in areas such as remanufactured goods; verifying

the environmental contributions of certain goods, services, and technologies; and enabling the development,

deployment, and uptake of relevant new technologies, such as zero-emission and autonomous vehicles.

Enforcing Environmental Provisions Through Existing Agreements and Tools

We will also continue to take innovative approaches through our existing agreements and tools to advance

our climate and environmental goals.

The USMCA provides another important example of how trade policy, when done right, is a powerful tool

to advance responsible climate action. The Agreement includes the most comprehensive environmental

commitments of any U.S. trade agreement, including provisions to address wildlife trafficking, illegal

logging and IUU fishing, fisheries subsidies, marine litter, and air and water pollution. The Biden

Administration is using the full range of tools at its disposal to confront these issues.

On February 10, 2022, USTR requested consultations with Mexico under the environment chapter of the

USMCA, concerning the effectiveness of Mexico’s enforcement of its environmental laws and compliance

with its USMCA environment commitments relating to the protection of the vaquita, the prevention of

illegal fishing, and trafficking of totoaba fish. Since that time, USTR has led a number of technical-level

consultations, working through an extensive list of questions regarding Mexico’s efforts and capacity to

enforce its laws and regulate fishing activities in the Upper Gulf of California. As a result, USTR developed

and submitted a draft plan of action to Mexico in August 2022, to which we received a counterproposal in

January 2023. USTR will continue to work closely with Mexico on the development, implementation, and

monitoring of this plan of action.

Another example is our work on illegally-harvested timber, which harms the environment, depletes natural

resources, and disadvantages U.S. workers and businesses who use lawful and sustainable means to make

their goods.

In October 2021, the United States announced an agreement with Vietnam that addresses U.S. concerns in

the Vietnam Timber Section 301 investigation. This was the first Section 301 investigation to address an

environmental concern, and the agreement secures commitments that will help keep illegally harvested or

traded timber out of the supply chain and protect the environment and natural resources.

In April 2022, the United States and Vietnam convened the first meeting of the Timber Working Group

(TWG) under that agreement, which was established to facilitate coordination between the parties and

oversee the implementation of the Timber Agreement. The second meeting of the TWG was convened in

November 2022. These meetings established a strong basis for further collaboration on implementation of

the Timber Agreement. In 2023, the Biden Administration will continue to closely monitor Vietnam’s

implementation of this agreement. Further, we will also work to identify other trading partners that engage

in practices related to the import and use of illegal timber, and we are prepared to take action to address this

serious environmental concern, as needed.

8 | THE PRESIDENT’S 2023 TRADE POLICY AGENDA

Moreover, the United States will continue to monitor implementation of environmental provisions of all

our trade agreements, including the United States – Chile Free Trade Agreement, the United States – Peru

Trade Promotion Agreement, and the United States – Panama Trade Promotion Agreement.

The Biden Administration will continue to use all available tools—and create new ones as needed—to use

trade policy to tackle the climate crisis and to protect the environment.

C. Supporting U.S. Agriculture

The Biden Administration also recognizes that farmers, ranchers, fishers, and food manufacturers are key

to our worker-centered trade policy, and we are fighting to achieve quick, economically meaningful wins

for them. From 2000 to 2022, annual U.S. agricultural exports grew from $58 billion to a record $202

billion.

In 2023, our Administration will continue to improve economic opportunities for U.S. farmers, ranchers,

and food manufacturers by expanding market access opportunities in foreign markets through the

negotiation of agreements that include provisions intended to eliminate or reduce nontariff barriers that can

hamper market access for U.S. agricultural products. The Administration will seek to include in these

agreements enforceable provisions that build on WTO obligations, including provisions to ensure that

sanitary and phytosanitary (SPS) measures are science-based, developed through transparent, predictable

processes, and implemented in a nondiscriminatory manner.

U.S. farmers are integral to the Biden Administration’s worker-centered trade policy, and they will see

more open trade in 2023 as a result of our ongoing efforts.

 In January 2023, we brought into force an amendment to Japan’s beef safeguard mechanism under

the U.S. – Japan Trade agreement. The updated agreement will allow U.S. beef exporters to more

reliably meet Japan’s growing demand for high-quality beef, providing more predictability and

reducing the probability that safeguard duties will be imposed on exports of U.S. beef in the future.

 In January 2023, the United States and the EU signed the U.S. – EU Tariff Rate Quota Agreement

that provides certainty to U.S. exporters regarding access to the EU market following the UK’s exit

from the EU, and secures favorable market access outcomes for U.S. agricultural products such as

rice, wheat, and corn.

 In February 2023, India announced a 70% cut to tariffs on U.S. pecan exports, removing a

longstanding barrier to U.S. agricultural trade. This was a big win for farmers and was a result of

the successfully revitalized United States – India Trade Policy Forum. In 2023, USTR will continue

to work with India to open market access for U.S. agricultural goods in India.

These outcomes demonstrate the Biden Administration’s continued commitment to work constructively

with our trading partners to provide greater economic opportunity for U.S. producers.

Enforcement also plays a critical role in promoting predictability and leveling the playing field in

agricultural trade. The Biden Administration will continue enforcing our existing agreements so U.S.

producers can compete on a level playing field in global markets.

For example, the United States is holding Canada to its commitments through enforcement action under the

USMCA. The United States has raised concerns under the USMCA previously about Canada’s dairy tariff

rate quota (TRQ) allocation measures. In December 2021, a USMCA dispute settlement panel found

THE PRESIDENT’S 2023 TRADE POLICY AGENDA | 9

Canada’s dairy TRQ allocation measures to be inconsistent with Canada’s USMCA obligations. In

response to the adverse findings of the panel, Canada introduced changes to its TRQ allocation measures,

but these new policies are still inconsistent with Canada’s obligations under the USMCA.

In May 2022, the United States requested, for the second time, dispute settlement consultations under the

USMCA to address dairy restrictions by Canada that are contrary to its USMCA commitments.

Specifically, we challenged Canada’s dairy TRQ allocation measures that deny allocation access to eligible

applicants, including retailers, food service operators, and other types of importers, and impose new

conditions on the allocation and use of the TRQs. In January 2023, the United States announced the

establishment of a panel to review Canada’s measures, and the panel is expected to issue a report later this

year. These actions demonstrate the Biden Administration’s commitment to ensuring that U.S. dairy

producers receive the full benefits of the USMCA to market and sell U.S. products to Canadian consumers.

Additionally, the United States continues to engage with Mexico to address concerns with Mexico’s policies

regarding agricultural biotechnology, which threaten to cause serious economic harm to U.S. farmers and

Mexican livestock producers, and stifle important innovations needed to help producers respond to pressing

climate and food security challenges. If our concerns are not resolved, the United States will consider all

options to fix this problem, including by taking formal steps under the USMCA.

In 2023, the Biden Administration will continue to ensure that our trade agreements benefit American

workers, including farmers, and will use our enforcement tools as necessary to ensure that our trading

partners deliver on their commitments and that U.S. agricultural producers receive the benefits negotiated

in existing FTAs. This includes leveling the playing field for U.S. farmers by monitoring the treatment of

products of agricultural biotechnology and advocating for non-discriminatory, science-based treatment of

U.S. agricultural products by our trading partners. We will also monitor the practices of other trading

partners to ensure that U.S. agricultural products are not subject to unfair, unjustified, or discriminatory

restrictions.

D. Bolstering Supply Chain Resilience

The pandemic, followed by Russia’s full-scale invasion of Ukraine, illustrated the dangers of concentrated

supply chains and inadequate consideration of geopolitical risk in making sourcing decisions. Further, the

concentration of our supply chains in China contributes to our vulnerability, especially for critical

technologies. That is why strengthening our supply chains is a critical component of the Biden

Administration’s efforts to advance our worker-centered trade policy, create sustainable economic growth,

and ensure that the system is more resilient in the face of supply shocks.

To begin addressing these challenges, President Biden signed Executive Order 14017 (America’s Supply

Chains) in 2021, directing a whole-of-government approach to assess vulnerabilities in, and strengthen the

resilience of, critical U.S. supply chains. Pursuant to the Executive Order, the Biden Administration

conducted a 100-day review for four priority product areas: semiconductors, large capacity batteries,

critical minerals and materials, and pharmaceuticals and active pharmaceutical ingredients.

USTR is actively engaged and coordinated with like-minded trade partners to develop durable solutions

that advance supply chain resilience in these critical areas. And the Task Force has already started to deliver

results, including: (1) addressing food insecurity in the wake of Russia’s further invasion of Ukraine; (2)

tackling forced labor in global supply chains; (3) continued collaboration with partners on developing

solutions to tackle supply chain issues; (4) facilitating trade in safe and effective medicines and minimizing

drug shortages; (5) securing smoother and more efficient movement of essential goods during a pandemic;

and (6) protecting the uninterrupted flow of trade in North America during an emergency.

10 | THE PRESIDENT’S 2023 TRADE POLICY AGENDA

Supply chain resilience is also at the heart of all our trade initiatives, including the IPEF – which has a pillar

dedicated to this issue – and the Americas Partnership. The Administration is also highlighting this issue

bilaterally, including with partners like the European Union and Kenya, and in multilateral fora like the G7,

G20, and APEC.

Over the next year, the Biden Administration will continue its work to strengthen supply chains to promote

economic security, national security, good-paying jobs and worker protections, and the health of small- and

medium-sized businesses, with strong standards for environmental sustainability and community

engagement. Further, steps to address identified supply chain vulnerabilities and develop the foundation

for increased resilience will be an important component of the United States’ ongoing engagement with its

trade partners.

III. RE-ALIGNING THE U.S.-CHINA TRADE RELATIONSHIP

The U.S.-China economic and trade relationship is one of profound consequence. As the two largest

economies in the world, the bilateral relationship affects not just the two participants, but the entire globe.

The Biden Administration acknowledges that this relationship is complex and competitive. With respect

to trade, competition must be fair. China’s approach to trade drives frictions in many of China’s

relationships—not just ours. China, as a large, non-market economy, is uniquely able to distort the

marketplace through unfair, anticompetitive practices, which harm workers and businesses in the United

States and in other countries, including some of our closest allies and partners. By unduly concentrating

production of certain goods in China, these non-market policies and practices also undermine supply chain

resilience and harm consumers that, in the long run, are deprived of the innovation and choice that fair

competition would produce.

To successfully counter the range of threats posed by China, we must be frank about the challenges we

face.

China employs a wide array of unfair, distortive measures that provide substantial support to Chinese

industries across the economy, often in pursuit of specific aims in terms of production, capabilities, and

market share. China has also limited market access for imported goods and services and restricted the

ability of foreign manufacturers and services suppliers to do business in China. Further, it has used various,

often illicit, means to secure foreign intellectual property and technology to pursue its industrial policy

objectives.

China fails to provide its people with the most basic of labor rights, including the right to organize and

bargain collectively. Low operating costs resulting from artificially low wages and poor worker protections

remain some of the key reasons why companies have chosen to offshore production there. Moreover, the

use of state-sponsored forced labor, including in the Xinjiang Uyghur Autonomous Region, is an affront to

human dignity and a further example of China’s unfair economic practices.

Similarly, China’s environmental policies make it a manufacturing destination of choice for production

processes that would be barred in other countries. China’s unfair, non-market practices are also reflected

in its approach to the environment, including: its weak environmental regulation and enforcement;

subsidies that contribute to overfishing; illegal fishing practices; decimation of the infrastructure for

recyclable commodities through a vast web of import bans; and overproduction of industrial goods. China’s

policies are also harmful to the environment, including its tolerance of imports of illegally harvested

wildlife products, which enables a major source of demand.

THE PRESIDENT’S 2023 TRADE POLICY AGENDA | 11

The Biden Administration is taking a holistic and pragmatic approach to our relationship grounded in the

principles of our worker-centered trade policy.

It starts with the groundbreaking domestic investments enacted through the President’s leadership, which

allow the United States to engage and compete with China from a position of strength. This includes, for

example, repairing our roads and bridges through the Bipartisan Infrastructure Law, bolstering our capacity

for critical technologies through the CHIPS and Science Act, and manufacturing clean energy technology

here at home and in that of free trade partners through the Inflation Reduction Act. In addition, we are

taking steps to build supply chain resilience that will defend American workers and consumers from the

harms wrought by China’s trade and economic abuses. We are also considering all existing tools—and will

potentially seek new ones as needed—to combat the harms of China’s state-led, non-market practices.

Critically, we are bringing renewed focus to engagement with our partners and allies, who also suffer harm

from China’s unfair trade and economic practices. We share values and an essential interest in fair, market-

based competition. The ability to defend against unfair Chinese practices requires that market economies

act in concert to confront policies and practices that are fundamentally at odds with a global trading system

based on market competition.

A key initiative is the U.S.-EU Cooperate Framework for Large Civil Aircraft. In 2021, we reached

agreement to set aside longstanding aircraft disputes and suspend tariffs for five years, in order to strengthen

our cooperative and strategic relationship. The United States and the EU are working to deepen their shared

understanding of China’s state-directed industrial targeting goals to more effectively defend our market-

oriented aerospace workers, companies, and sector from the PRC’s non-market economic policies and

practices.

In particular, as noted above, the Biden Administration will continue holding China accountable for its use

of state-sponsored forced labor, which is not just an extreme form of unfair competition but a moral stain.

Consistent with the statutory ban on the importation of goods made in whole or in part with forced labor,

the Administration issued an updated Xinjiang Supply Chain business advisory in 2021. Going forward,

the Biden Administration will continue holding China accountable for its use of state-sponsored forced

labor and working with our trading partners to eradicate the use of forced labor throughout global supply

chains. The United States will continue implementation and enforcement of the Uyghur Forced Labor

Prevention Act.

We are also mindful of the effects that trade actions can have on American businesses, especially small

businesses, and workers. In May 2022, USTR commenced the statutory four-year review process by

notifying representatives of domestic industries that benefit from the Section 301 tariffs on imports from

the PRC of the possible termination of those actions and of the opportunity for the representatives to request

continuation. In September 2022, USTR announced that because requests for continuation were received,

the tariff actions had not terminated and USTR would conduct a review of the tariff actions. USTR will

continue a targeted tariff exclusions process to ensure that our economic interests are being served, and we

will keep open the option of further tariff exclusions processes as warranted.

IV. ENGAGING WITH KEY TRADING PARTNERS AND

MULTILATERIAL INSTITUTIONS

Growing the middle class, opening new markets, addressing inequality, and incentivizing climate and

environmental action are goals we share with many of our trading partners. Working with others to craft

12 | THE PRESIDENT’S 2023 TRADE POLICY AGENDA

trade policies that promote these goals reflects the American leadership that many of our trading partners

are seeking, and the Biden Administration continues to meet the challenge.

Using trade policy as a tool to achieve these shared goals, USTR continues to step up its engagement with

partners, allies, multilateral institutions and international organizations. These actors and institutions play

a pivotal role in cultivating meaningful outcomes to address shared concerns.

The Biden Administration has repaired previously strained relationships with partners and allies and

recommitted the United States to the world’s international institutions. We are applying the principles of

our worker-centered trade policy to resolve long-standing disputes, and to create new partnerships and

frameworks fit for jointly tackling our greatest shared challenges. We are also leading the effort to revitalize

our international institutions to ensure that they effectively address the needs of everyday people.

President Biden’s strategy has already borne fruit, leading to mutually beneficial outcomes that advance

the goals of shared prosperity and open the door to still greater cooperation.

A. Indo-Pacific Economic Framework for Prosperity

The Biden Administration is committed to engaging economically with partners in the Indo-Pacific region.

In the coming decades, we believe that competitiveness will largely be defined by how well countries are

able to harness technology and digital sectors of our economies and the coming energy and climate

transition to promote inclusive growth—and working with our partners and allies in the Indo-Pacific will

be critical to achieving these goals.

The Indo-Pacific is one of the most dynamic regions in the world, and it is one of strategic importance to

the United States. Additionally, the region is home to some of our closest allies and trading partners,

including some with which we have longstanding trade agreements. By working closely with allies and

partners to bolster our economic engagement in the Indo-Pacific, we can establish a new path forward that

supports the global competitiveness of American workers and businesses and furthers the shared interests

of our allies in the years to come.

That is why we launched the IPEF in May 2022. This framework will promote inclusive growth for workers

and businesses, advance strong labor standards, and tackle climate change. The framework is also central

to the Biden Administration’s economic strategy in the Indo-Pacific and complements our national security

goals in the region.

The IPEF will be a model for the rest of the world that unlocks enormous economic value. It is a 21st

century framework designed to tackle 21st century challenges and opportunities, including: fair and resilient

trade (including labor, digital and other elements); supply chain resilience; infrastructure, decarbonization,

and clean energy; and tax and anti-corruption. USTR is leading efforts to craft a trade agreement with

partners that includes high-standard provisions in a range of areas, including labor; environment; digital

trade; agriculture; transparency and good regulatory practices; services domestic regulation; competition

policy; trade facilitation; inclusivity; and technical assistance and economic cooperation.

In September 2022, trade ministers met in Los Angeles, California, to announce a statement outlining the

details of our plans for further work in those areas. And in December 2022, we held the first in-person

negotiating round in Brisbane, Australia, where we started text-based negotiations on the following topics:

trade facilitation, agriculture, services domestic regulation, and transparency and good regulatory practices.

In addition to text-based discussions, USTR officials held detailed conceptual discussions for the following

topics under Pillar I: environment, labor, digital economy, competition policy, and inclusivity. In 2023,

THE PRESIDENT’S 2023 TRADE POLICY AGENDA | 13

the United States will continue intensive negotiations with our IPEF partners to deliver a high-standard

agreement with cutting-edge trade rules.

B. Americas Partnership for Economic Prosperity

In our own hemisphere, we are pursuing the Americas Partnership to enhance our strong regional bonds in

line with a shared vision for inclusive, people-centered economic growth. The Americas Partnership will

foster regional competitiveness, resilience, shared prosperity, and inclusive and sustainable investment,

while tackling the climate crisis, by seeking high-standard agreements in these critical areas.

In January 2023, the United States hosted a virtual ministerial meeting to move this initiative forward, with

representatives from the initial Western Hemisphere countries who endorsed the principles and high-level

goals of the initiative. Those countries are Barbados, Canada, Chile, Colombia, Costa Rica, the Dominican

Republic, Ecuador, Mexico, Panama, Peru, and Uruguay. This significant group represents roughly 90

percent of the Western Hemisphere’s GDP and nearly two thirds of its people.

The United States has deep economic ties in the region, including free trade agreements with nine of our

initial partners. The Americas Partnership will strengthen and expand our efforts to drive regional

economic growth by focusing on the drivers of bottom-up and middle-out economic growth, good-quality

jobs, and our competitiveness. Our workers, our companies, and our people benefit from our close

economic ties and deep partnership with our closest neighbors. Through the Americas Partnership, we will

ensure that our hemisphere remains among the most dynamic economic regions in the world.

The Americas Partnership is a flexible framework that will be open to all countries that share our values

and vision for a prosperous hemisphere. We will move quickly toward execution of the Americas

Partnership, starting with preparations for future negotiations on commitments and other areas of

cooperation. Our Administration will continue to consult closely with labor, environmental groups, civil

society, industry and businesses, and Congress as we make progress on this important initiative.

C. World Trade Organization

The Biden Administration is committed to the World Trade Organization (WTO). Consistent with our

approach to trade policy more broadly, our Administration believes the WTO should be a force for good

that supports a race to the top and addresses global challenges as they arise.

The WTO was founded on shared values of fair, market-oriented competition, transparency and the rule of

law, raising living standards and ensuring full employment, sustainable development, and respect for

governments’ responsibility to promote our citizens’ welfare and security.

The United States still believes these fundamental values support peace, prosperity, and economic security.

The WTO, however, has not kept pace with the rapidly changing global economy, and the inability of

current rules to effectively constrain unfair trade and economic practices have only become clearer. Most

recently, WTO dispute settlement panels have strayed from the WTO’s founding principles by casting

judgment on the national security decisions of its Members. The WTO must improve its capacity to respond

to the needs of everyday people, and urgent reform is critical to support the needs of our society, including

on workers’ rights, supply chain fragility, and the climate.

That is why the Biden Administration is leading and partnering on a WTO reform agenda that reflects the

priorities of our worker-centered approach—one that protects our planet; improves labor standards;

advances gender equity, equality, and empowerment; facilitates an inclusive digital economy; and

14 | THE PRESIDENT’S 2023 TRADE POLICY AGENDA

contributes to shared prosperity. We aim to restore efficacy to the negotiating arm and promote genuine

transparency; improve the understanding of and respect for Members’ WTO commitments; and equip the

organization to effectively account for the unfair, non-market policies and practices that are at odds with

the fundamental premise of market-based competition and that create and perpetuate significant global

market distortions.

The Biden Administration understands that change will take time, and we are simultaneously working to

deliver results on achievable outcomes through the WTO’s existing structure. Despite skepticism, the

United States worked with WTO Members to deliver concrete outcomes during the Twelfth Ministerial

Conference in June 2022. These outcomes touched on important issues that directly affect working people

everywhere, including a modification of intellectual property protections for COVID vaccines; an extension

of the moratorium on customs duties on electronic transmissions; a multilateral agreement on fisheries

subsidies disciplines; and a Ministerial Declaration on food insecurity, and a work program to respond to

modern sanitary and phytosanitary (SPS) challenges to feed a growing global population.

Additionally, to better inform our discussions with WTO Members following the outcome on COVID-19

vaccines, USTR has requested that the United States International Trade Commission (USITC) provide a

public report on available data and information regarding access to COVID-19 diagnostics and therapeutics.

As a part of its investigation, the USITC will solicit comments from the public and hold a public hearing.

The United States will continue engaging with WTO Members in 2023 to make progress on these and other

issues and to transform the organization to address the challenges of our time.

D. Asia-Pacific Economic Cooperation

As part of our enduring commitment to the region and broad-based economic growth, the United States is

excited to serve as the Asia-Pacific Economic Cooperation (APEC) host in 2023, with the theme of

“Creating a Resilient and Sustainable Future for All.” The United States is taking full advantage of our

host year to collaborate with like-minded partners to showcase the importance of engagement with the

APEC region for American prosperity.

As an incubator of ideas and a catalyst for collaboration, APEC is uniquely positioned to explore how the

United States and our partners in the region can work together to build a more durable and resilient global

economy. The United States is fully committed to working with APEC economies to make resiliency,

sustainability, and inclusivity core values in trade policy and to advance the needs of workers, consumers,

and businesses throughout the region.

Throughout this year, we are energizing existing avenues of work in APEC, and we are also developing

new efforts, in order to more meaningfully mainstream APEC’s prioritization of sustainability and inclusion

into its ongoing work on trade and investment. That includes lifting up workers and women entrepreneurs,

empowering small businesses to enter the market, grow, and compete, and using trade to pursue

decarbonization and protect our planet.

These topics are more important than ever as we continue to face a world full of challenges and

uncertainty—the economic fallout from COVID-19, Russia’s continued aggression in Ukraine, fragile

supply chains, growing inequality, and a worsening climate crisis. Throughout our host year and beyond,

the United States will continue to work with other APEC economies to promote sustainable, inclusive, and

resilient growth throughout our region and to unlock economic opportunities for those who have been

underserved, marginalized, and underrepresented in all of our populations.

THE PRESIDENT’S 2023 TRADE POLICY AGENDA | 15

E. Organization for Economic Co-operation and Development

The Organization for Economic Cooperation and Development (OECD) has also recognized that trade must

work for all, and it is another venue that provides the Administration with an opportunity to advance our

worker-centered trade agenda.

An ongoing priority for the Biden Administration is the resolution of long-standing U.S. concerns about

discriminatory digital services taxes (DSTs). As part of the historic 2021 OECD/G20 Inclusive

Framework’s Two-Pillar Solution on global taxation, U.S. trading partners around the globe made a

political agreement to withdraw existing DSTs and other similar measures as the global tax reform is

implemented, and not to adopt any such new measures that target and discriminate against American

companies and their workers. USTR continues to monitor the imposition of DSTs by our trading partners

and will evaluate all of its available options, including under our trade agreements and domestic statutes, if

other countries move forward with new measures or fail to withdraw existing measures.

Our engagement in the OECD is also serving to deepen a shared understanding of how China subsidizes

key industries and the important role played by Chinese state-owned enterprises as both the recipients and

providers of industrial subsidies. Through innovative analytical tools, the OECD is producing findings that

will enable the United States to advance discussions on these critical issues together with likeminded

partners.

USTR will also continue to pursue a mutually supportive trade and environment agenda at the OECD, and

through its co-lead role to the meetings of the Joint Working Party on Trade and Environment, will advance

work on trade and environmental services, circular economy and trade, and enabling reverse supply chains.

F. Bilateral Initiatives

President Biden has used trade policy as a tool to rebuild relationships with partners to advance a worker-

centered trade policy. Some of these engagements were held under the auspices of existing trade

agreements, including free trade agreements and trade and investment framework agreements (TIFAs),

while others led to the formation of new partnerships.

1. European Union

The United States and the European Union (EU) share an economic relationship of critical importance, as

well as the goals of growing the middle class, addressing inequality, and incentivizing responsible

environmental stewardship. Geostrategic challenges, including Russia’s full-scale invasion of Ukraine and

increased assertiveness of autocratic regimes, have reinforced the importance of our shared democratic

values, commitment to universal human rights, and leadership role in upholding liberal rules-based order.

The Biden Administration believes that a strong U.S.-EU partnership is key to realizing this vision.

2022 cemented our progress in cooperating to promote shared goals and manage challenges and irritants.

Since Russia’s invasion of Ukraine, the Administration has worked closely with the EU to hold Russia

accountable—including through close coordination on aggressive sanctions. We will also continue to

partner with the EU to marshal significant levels of security assistance, humanitarian aid, and direct

economic support for Ukraine.

Additionally, through negotiations on the Global Arrangement on Sustainable Steel and Aluminum, we are

demonstrating that trading partners can come together and align on common objectives and use trade tools

16 | THE PRESIDENT’S 2023 TRADE POLICY AGENDA

to decarbonize our economies and drive cleaner trade. In 2023, we will work to conclude negotiations of

the Global Arrangement.

In December 2022, the United States and the EU held the first Ministerial Meeting of the Working Group

on large civil aircraft to review progress and deepen efforts to defend the interests of our aerospace workers

and companies from the PRC’s non-market economic policies.

Since holding the inaugural ministerial meeting of the U.S.-EU Trade and Technology Council (TTC) in

September 2021, our governments have met regularly to collaborate on a number of concrete areas, such

as challenges posed by non-market policies and practices and economic coercion; avoiding unnecessary

barriers to trade in emerging technology products and services; promoting and protecting labor rights and

decent work; combatting child and forced labor; expanding resilient and sustainable global supply chains;

and trade and environment.

Specifically, on labor, we kicked off the Trade and Labor Dialogue to bring together labor, business, and

government representatives from both sides of the Atlantic to focus on eliminating forced labor in global

supply chains and better incorporating key stakeholder insights into our work.

Going forward, the Biden Administration will also seek to use the TTC to cooperate on the development

and deployment of new technologies that are based on our shared democratic values, including respect for

human rights, and that encourage compatible standards and regulations as appropriate, while respecting the

sovereign right to regulate.

Additionally, in 2023, we will continue to host the U.S. – EU Small- and Medium-Sized (SME) Workshop

to identify ways to expand bilateral trade and investment and to enhance broad and inclusive SME

participation in that trade and investment.

2. Taiwan

The United States has a long-standing and dynamic trade relationship with Taiwan, a vibrant democracy

and important trading partner in the region. Building on this history, in June 2022, the United States and

Taiwan launched the United States – Taiwan Initiative on 21st Century Trade under the auspices of the

American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United

States. In August 2022, the two sides announced the negotiating mandate for this initiative, which calls for

reaching agreement on high-standard commitments and economically meaningful outcomes in a number of

trade areas, including trade facilitation, regulatory practices, agriculture, anticorruption, small- and

medium-sized enterprises, digital trade, labor, environment, standards, state-owned enterprises, and non-

market policies and practices. Since then, the two sides have pursued an ambitious schedule of meetings—

including most recently in January 2023—in an effort to make progress as quickly as possible. The United

States places a high priority on partnering with Taiwan to further deepen and strengthen our trade and

investment relationship.

3. Kenya

The United States will continue working with Kenya to deepen our trade and investment relationship,

including by advancing worker-centered trade policies and promoting regional and continental economic

integration in Africa. On July 14, 2022, the United States and Kenya launched the United States – Kenya

Strategic Trade and Investment Partnership (STIP). The STIP builds on our cooperation to date and will

pursue enhanced engagement leading to high standard commitments in a wide range of areas with a view

to increasing investment; promoting sustainable and inclusive economic growth; benefiting workers,

consumers, and businesses (including micro-, small-, and medium-sized enterprises (MSMEs)); and

THE PRESIDENT’S 2023 TRADE POLICY AGENDA | 17

supporting African regional economic integration. The first round of conceptual discussions was held in

February 2023.

In the coming months, the Biden Administration will hold further conversations with the Kenyan

government on important issues, including: agriculture; anti-corruption; digital trade; environment and

climate change action; good regulatory practices; MSMEs; workers’ rights; supporting participation of

women, youth, and others in trade; standards collaboration; and trade facilitation and customs procedures.

The Biden Administration also views this approach as one to be built upon to include other areas of mutual

interest and to serve as a model for engagement with other willing countries on the African continent.

4. India

The United States and India share a dynamic and important trade and investment relationship. In 2021, the

United States and India relaunched the United States – India Trade Policy Forum (TPF), which had not met

since 2017. In January 2023, the United States and India convened the 13th meeting of the TPF in

Washington. Our governments discussed the tremendous potential for growth between our economies and

how we can work together to bring a positive impact to working people in both countries. Additionally,

the new TPF Working Group on Resilient Trade will provide a structured framework for discussions of

issues of mutual interest, including trade facilitation, labor, environment, and good regulatory practices, all

with a view towards building a more resilient future for our economies. The United States will continue to

partner with India to tackle shared challenges, build resilient supply chains, and promote a transparent,

rules-based trading system for market economies and democracies.

5. Japan

Japan has long been a valued trading partner of the United States, as well as a close ally. Following the

Section 232 tariff agreement to allow historically-based sustainable volumes of Japanese steel products to

enter the U.S. market without the application of Section 232 tariffs, the United States and Japan held several

meetings of the United States – Japan Partnership on Trade. This initiative reaffirms the shared

commitment to strengthen the U.S.-Japan alliance through regular engagement to advance an agenda of

cooperation as well as to address bilateral trade issues of concern to either side. Through our meetings, we

discussed specific initiatives and efforts in a range of areas, including labor and environment-related

priorities, a supportive digital ecosystem for all, third country concerns, trade facilitation, and multilateral

cooperation.

Our governments are also resolving concerns and pursuing common goals through the Partnership,

including a Memorandum of Cooperation to launch a Task Force on the Promotion of Human Rights and

International Labor Standards in Supply Chains. The United States will use this Partnership to deepen our

cooperation and advance sustainable, resilient, inclusive, and competitive trade policies that lift up our

people and economies.

6. Korea

Korea is a valued trading partner and a close ally. The United States – Korea Free Trade Agreement

(KORUS) continues to be both a reflection of that close relationship and the foundation upon which we can

build to make it even more cooperative.

Following our convening of the KORUS Joint Committee in 2021, the United States and Korea held a

meeting of the Labor Affairs Council in April 2022. The council discussed steps to strengthen workers’

rights and respect for freedom of association, explore a trilateral cooperation project with the International

Labor Organization, eliminate forced labor from shared supply chains, and consider areas of future

18 | THE PRESIDENT’S 2023 TRADE POLICY AGENDA

cooperation and technical capacity building. During the public portion of the meeting, workers, employers,

civil society organizations and other attendees discussed issues related to the KORUS Labor Chapter’s

implementation, particularly related to freedom of association and trade union rights.

Going forward, we are committed to working with Korea to address our shared concerns, such as supply

chain challenges, sustainable trade, emerging technologies, the digital economy, and trade facilitation.

7. Singapore

Singapore has long been a critical partner and was the first the first Asian economy to sign a free trade

agreement with the United States. Since convening a United States – Singapore Free Trade Agreement

Joint Committee Meeting in October 2021, our governments have been meeting regularly to press forward

with work on the environment, labor, digital trade, supply chains, and intellectual property, among other

issues. The United States will continue working closely with Singapore on these and other matters in 2023.

8. United Kingdom

In 2023, the United States and the United Kingdom (UK) will continue to deepen our trade relationship and

work to promote trade based on fair competition, address forced labor in supply chains, and address the

challenges posed by distortive policies of non-market economies. We will continue efforts in the large civil

aircraft Working Group to explore concrete ways to more effectively address the challenge posed by the

PRC’s non-market policies and practices. We will also continue to work together on reforming and

strengthening the WTO so it better serves the lives and livelihood of all people, and also explore ways to

boost investment in clean energy technology.

Additionally, we will continue to host the U.S. – UK Small- and Medium-Sized (SME) Dialogue to identify

ways to expand bilateral trade and investment and to enhance broad and inclusive SME participation in that

trade and investment. USTR will also hold events in the United States and the United Kingdom to hear

directly from our respective stakeholders on the way forward for U.S.-UK trade ties. We will engage in

robust discussions and outline considerations for advancing our trading relationship to support our worker-

centered trade policy.

9. African Continental Free Trade Area

The United States will continue to engage with the African Continental Free Trade Area (AfCFTA)

Secretariat to support regional and continental economic integration, attract investment in supply chains

within the continent, and improve the livelihoods of African workers, including and especially women and

youth under the AfCFTA.

To further this goal, in December 2022, the United States and the AfCFTA Secretariat signed a

Memorandum of Understanding on Cooperation for Trade and Investment between the United States and

the African Continental Free Trade Area, during the United States – Africa Business Forum. The MOU

sets up an annual high-level engagement between the United States and the AfCFTA Secretariat, as well as

quarterly meetings of technical working groups, to discuss issues to be identified by the participants. The

working groups will bring together representatives from the AfCFTA Secretariat, USTR, the interagency,

and other stakeholders to exchange information on best practices and facilitate an open dialogue to enhance

the relationship between the United States and the AfCFTA Secretariat, the AfCFTA State Parties, and

related stakeholders.

The Biden Administration recognizes that it is impossible to meet today's defining challenges on trade

without African contributions and leadership. The United States is committed to working with the African

THE PRESIDENT’S 2023 TRADE POLICY AGENDA | 19

Union, including the African Union Commission and the AfCFTA in 2023 and beyond to develop a lasting

partnership with the continent. We will build upon the progress made during the African Growth and

Opportunity Act (AGOA) ministerial meeting in December 2022 and look forward to a constructive AGOA

forum this year to further improve AGOA—including how we can increase the utilization rates, particularly

among smaller and less-developed countries, as well as ensure that the program’s benefits fully reach all

segments of society.

V. PROMOTING CONFIDENCE IN TRADE POLICY THROUGH

ENFORCEMENT

The Biden Administration is committed to vigorously enforcing our trade agreements as a critical element

of pushing a global race to the top. Enforcement is a key component of our worker-centered trade policy

agenda. We are using all of the tools at our disposal to combat unfair, non-market practices, defend

American jobs, and create broad-based economic prosperity. American workers and businesses can

compete with anyone when the playing field is level and competition is fair, and trade policy is an

indispensable tool in achieving those goals. We are shaping a global trading system that enforces labor and

environmental standards, protects intellectual property, and ensures that regulations are science-based and

predictable.

As discussed above, the Biden Administration has already taken unprecedented action to utilize trade policy

as a tool to defend U.S. economic interests. Under the United States – Mexico – Canada Agreement

(USMCA), we have used the rapid response mechanism (RRM) to secure significant outcomes for workers

on seven occasions. We also established—and ultimately prevailed in—the first dispute settlement panel

proceeding under the USMCA on Canada’s dairy tariff-rate quota administration. The United States has

also repeatedly engaged with Canada and Mexico on a number of issues, including to ensure that U.S.

agricultural products receive fair treatment, that the regulatory environment is fair and transparent, and that

all U.S. goods receive fair treatment.

Continuing to vigorously enforce the USMCA’s standards will continue to be a top priority for the Biden

Administration in 2023. We have established a dispute settlement panel to address our concerns with

Canada’s revised dairy restrictions that are contrary to its USMCA commitments. We are currently

consulting with Mexico to address our concerns with Mexico’s measures that undermine American

companies and U.S.-produced energy in favor of Mexico’s state-owned electrical utility and state-owned

oil and gas company, Petróleos Mexicanos (PEMEX). We are also engaged in environmental consultations

with Mexico under the USMCA’s Environment Chapter relating to the protection of the critically

endangered vaquita porpoise, the prevention of illegal fishing, and trafficking of totoaba fish. We will

continue to use all available enforcement mechanisms to robustly uphold the USMCA’s groundbreaking

standards.

We are also thoroughly deploying domestic enforcement tools to protect our economic interests.

USTR’s Special 301 Report highlights the adequacy and effectiveness of U.S. trading partners’ protection

and enforcement of intellectual property (IP) rights. IP-intensive industries support more than 60 million

U.S. jobs—from the independent inventor just starting out to the documentary filmmaker studying critical

social issues. Robust protection and enforcement in foreign countries help protect these jobs and ensure

that Americans can fairly compete in global marketplaces.

Similarly, the 2022 Notorious Markets List, released on January 31, is worker-centered in its focus. It

identifies examples of online and physical markets that reportedly engage in or facilitate substantial

20 | THE PRESIDENT’S 2023 TRADE POLICY AGENDA

policy, this year’s publication highlights the impact of online piracy on U.S. workers and examines how

online piracy can impact the wages, residuals, pensions, and health care benefits that workers in the creative

industries depend on.

In addition, the Administration will continue to administer its preference programs in line with our worker-

centered agenda and in accordance to the statutory eligibility criteria. After using all diplomatic means

available to induce the governments to remediate the issues, President Biden announced in November 2022

the termination of Burkina Faso’s eligibility for the African Growth and Opportunity Act (AGOA) trade

preference program. Our Administration is deeply concerned by the unconstitutional changes in

government in Burkina Faso and urges the country to take necessary actions to return to elective democracy.

The United States remains committed to and continues to work with Burkina Faso to meet the clear statutory

benchmarks toward reinstatement in the AGOA program.

The United States also opposes acts, policies and practices by foreign countries that are intended to

undervalue their currencies in order to gain an unfair competitive advantage over American businesses and

workers. Under the Biden Administration, the U.S. government has deployed the full range of available

tools to put effective pressure on countries that have been judged to intervene excessively in the foreign

exchange market. The Biden Administration is committed to examining the currency practices of all major

U.S. trading partners and holding them to account as necessary.

The Biden Administration will continue to monitor the practices of our trading partners and hold them

accountable for meeting the standards established under our trade agreements. Further, we will also

continue to review our existing trade tools, identify ways to strengthen them, and create new tools as

necessary to achieve meaningful results that level the playing field for U.S. workers and businesses. In

2023, we will continue to work with Congress to fully evaluate the efficacy of our current trade tools and

identify areas where new tools may be needed.

VI. PROMOTING EQUITABLE, INCLUSIVE, AND DURABLE

TRADE POLICY AND EXPANDING STAKEHOLDER

ENGAGEMENT

Trade policy, when done correctly, can play a critical role in advancing equitable and resilient economic

growth for underserved and marginalized communities, here in the United States and with trading partners

who share concerns about rising inequality. The Biden Administration is committed to thorough and

thoughtful engagement as we develop and implement the President’s trade policy agenda.

Inclusive engagement is a key component to ensuring that our resulting trade policies are durable and

equitable, and to building trusted, sustained lines of communication with those communities that will be

affected by those decisions. As such, the Biden Administration will continue to expand the tables we set

and meet with communities across the country—including Tribal nations, Indigenous communities, and

African and Asian American and Native Hawaiian and Pacific Islander communities—to ensure that the

voices of all stakeholders are heard and respected as we evaluate and make these decisions.

A. Promoting Equitable, Inclusive, and Durable Trade Policy

In strengthening the nation’s competitiveness and expanding the benefits of trade, racial and gender equity

are core elements of U.S. trade and investment policy. An intersectional, interconnected framework is

particularly important in emerging sectors where the United States has the potential to be competitive and

THE PRESIDENT’S 2023 TRADE POLICY AGENDA | 21

create well-paying U.S.-based jobs through trade. For these reasons, many of President Biden’s first actions

directed the whole of government to embed equity in their policy goals, objectives, and outcomes.

As a result, the 2022 Annual Trade Report includes updates on USTR initiatives to advance racial and

gender equity in U.S. trade policy. In addition, all U.S. trade policy tools, engagements, and new trade

initiatives incorporate and reflect the core principles outlined in the Executive Orders on Advancing Racial

Equity and Support for Underserved Communities Through the Federal Government and Worker

Organizing and Empowerment, the United States’ historic, first National Strategy on Gender Equity and

Equality, and the Presidential Memoranda on Tribal Consultation and Strengthening the Nation-to-Nation

Relationship and on Advancing the Human Rights of LGBTQI+ Persons around the World.

In particular, in April 2022, USTR released its Equity Action Plan, developed in accordance with President

Biden’s Executive Order on Advancing Racial Equity and Support for Underserved Communities Through

the Federal Government. Through an intersectional, interconnected, whole-of-agency approach, the Plan

includes incorporating racial and gender equity into the following trade and investment-related policy

actions: (1) annual public updates on strategies and activities; (2) strengthening data to consider and

improve the distributional effects of trade; (3) advisory committee administration, including questions

posed to cleared advisors, training, and guidance; and (4) expanded and consistent USTR engagement with

underserved and marginalized communities.

Additionally, the U.S. Trade Representative continues to play a constructive, active role as the co-chair of

the White House Initiative and President’s Advisory Commission on Asian American Native Hawaiian and

Pacific Islanders, and as a member of the Gender Policy Council and White House Council on Native

American Affairs (WHCNAA). On January 17, 2023, the White House convened federal government

officials and community leaders to release the Biden Administration’s first-ever National Strategy to

Advance Equity, Justice, and Opportunity for Asian American, Native Hawaiian, and Pacific Islander (AA

and NHPI) Communities. The National Strategy includes detailed plans from thirty-two federal agencies,

including USTR, which build on the Administration’s previous actions to promote safety and equity for

AA and NHPI communities.

Further, data continues to be critical to informing our work with like-minded partners to advance inclusive

growth and trade policy. In October 2021, USTR requested that the U.S. International Trade Commission

(USITC) conduct an independent, two-part investigation of the distributional effects of goods and services

trade and trade policy on U.S. workers by skill, wage and salary level, gender, race/ethnicity, age, and

income level, especially as they affect underrepresented and underserved communities.

On November 14, 2022, the USITC released its report cataloging information on the distributional effects

of trade and trade policy on underrepresented and underserved communities. USTR will use the results of

the USITC’s investigation to advance inclusive growth, economic resilience and competitiveness, and data

needs in U.S. trade policy, including supporting efforts to close data gaps and improving data accessibility,

granularity, and scope. USTR will continue to work with the USITC as it strengthens its capacity to analyze

the distributional effects of trade actions on U.S. workers.

B. Engagement and Consultation with Partners and Stakeholders

The Biden Administration recognizes Congress’ important role in crafting U.S. trade and investment policy.

We welcome and seek guidance and feedback from Members of Congress to share their views and

constituents’ priorities regarding trade policy. USTR consults with Congressional committees and the

leadership of both parties in the U.S. Senate and U.S. House of Representatives, holds meetings and calls

with Members and their staff, participates in Congressional hearings and leads congressional delegations

22 | THE PRESIDENT’S 2023 TRADE POLICY AGENDA

overseas to meet with trading partners and multilateral organizations. USTR also engages Members of

Congress in their districts and states meeting with constituents, including workers, farmers, businesses, and

community-based stakeholders. In addition, we share negotiating text with Members of Congress and

appropriately cleared staff prior to sharing it with stakeholders outside of the federal government or with

foreign countries. In 2023, the Biden Administration will continue to actively engage with Congress and

work with Members to ensure their feedback informs trade policy.

Additionally, the Biden Administration is committed to engaging with a wide range of diverse stakeholders,

including historically marginalized and underserved communities, as we develop and implement our trade

policy agenda. USTR will continue connecting with stakeholders with diverse perspectives and experiences

throughout the country to listen, learn, and build trusted relationships and lines of communication to

develop inclusive policy that delivers equitable results.

Our Administration has also regularly consulted and briefed the 28 advisory committees that USTR

manages and co-leads as we seek to hear input from labor unions, environmental groups, consumer groups,

nongovernmental organizations, state and local governments, industry, and academia. In addition to

seeking cleared advisor feedback on how to improve the administration of advisory committees, USTR will

continue to invite and challenge cleared advisors to consider and advise on advancing innovative, equitable

trade and investment policy, and encourage diverse and inclusive perspectives to apply to serve on trade

advisory committees.

THE 2022 ANNUAL REPORT

OF THE PRESIDENT

ON THE TRADE AGREEMENTS PROGRAM

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 1

I. AGREEMENTS, NEGOTIATIONS, AND

OTHER INITIATIVES

A. New Trade Initiatives

1. Indo-Pacific Economic Framework for Prosperity (Pillar I: Trade)

In May 2022, the United States launched the Indo-Pacific Economic Framework for Prosperity (IPEF) with

Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand,

Philippines, Singapore, Thailand, and Vietnam.

IPEF will advance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness

for participating economies. Through this initiative, the IPEF partners aim to contribute to cooperation,

stability, prosperity, development, and peace within the region. This framework will offer tangible benefits

that fuel economic activity and investment, promote sustainable and inclusive economic growth, and benefit

workers, consumers, and businesses (including micro, small, and medium-sized enterprises), across the

region. The 14 IPEF partners represent 40 percent of global GDP and 28 percent of global goods and

services trade.

The launch began discussions of future negotiations on the following pillars: (I) Trade; (II) Supply Chains;

(III) Clean Economy; and, (IV) Fair Economy. The IPEF is designed to be flexible, and IPEF partners are

not required to join all four pillars.

The Office of the U.S. Trade Representative (USTR) is leading for the United States on the Trade Pillar,

the Department of Commerce is leading on Pillars II and III; and the two agencies are co-leading on Pillar

IV.

On September 9, 2022, USTR and IPEF partners issued a ministerial statement outlining the scope of

negotiations for the Trade Pillar. Current Trade Pillar partners are: Australia, Brunei Darussalam, Fiji,

Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and

Vietnam. In December 2022, IPEF partners met in Australia for the first round of negotiations.

Through the IPEF Trade Pillar negotiations, the United States seeks to build high-standard, inclusive, free-

and fair-trade commitments and to develop new, creative, and economically-meaningful approaches to

trade policy in the Indo-Pacific region. USTR endeavors to advance U.S. trade policy goals of resilience,

sustainability, and inclusivity by negotiating commitments in the following areas: labor, environment,

digital economy, agriculture, transparency and good regulatory practices, competition policy, trade

facilitation, inclusivity, and technical and economic cooperation.

2. United States–Taiwan Initiative on 21st-Century Trade

On June 1, 2022, the United States announced the launch of the U.S.–Taiwan Initiative on 21st-Century

Trade under the auspices of the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural

Representative Office in the United States (TECRO). After a public comment period and public hearing

with stakeholders, the two sides announced the official negotiating mandate on August 17, 2022, and then

commenced formal negotiations.

2 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

The U.S.–Taiwan Initiative on 21st-Century Trade is intended to develop concrete ways to deepen the

economic and trade relationship between the two economies, advance mutual trade priorities based on

shared values, and promote innovation and inclusive economic growth for workers and businesses. The

two sides have developed an ambitious roadmap for reaching agreements with high-standard commitments

and economically meaningful outcomes in the following trade areas: (1) agriculture; (2) anticorruption; (3)

digital trade; (4) environment; (5) good regulatory practices; (6) labor; (7) non-market policies and

practices; (8) small and medium-sized enterprises; (9) standards; (10) state-owned enterprises; and, (11)

trade facilitation.

On November 8 and November 9, 2022, the United States and Taiwan, under the auspices of AIT and

TECRO, held two days of productive conceptual discussions on the U.S.-Taiwan Initiative on 21st-Century

Trade. During the meetings, the two sides exchanged views on the key concepts to be addressed in several

of the trade areas set out in the negotiating mandate for the initiative.

The United States and Taiwan intend to use the U.S.–Taiwan Initiative on 21st-Century Trade and their

ongoing engagement with stakeholders to advance and deepen the important U.S.–Taiwan economic and

trade relationship, to promote shared values, and to address shared challenges and opportunities.

3. United States–Kenya Strategic Trade and Investment Partnership

U.S. officials met with Kenyan Government officials in Nairobi from May 3 to May 6, 2022 to discuss a

wide range of topics and help identify key areas of convergence that deepened mutual understanding

between both countries.

On July 14, 2022, the U.S. Trade Representative and the Cabinet Secretary for Kenya's Ministry of

Industrialization, Trade and Enterprise Development, issued a joint statement launching the United States–

Kenya Strategic Trade and Investment Partnership (STIP). They decided that the United States and Kenya

would pursue enhanced engagement leading to high standard commitments in a wide range of areas with a

view to increasing investment; promoting sustainable and inclusive economic growth; benefiting workers,

consumers, and businesses (including micro, small, and medium-sized enterprises); and, supporting African

regional economic integration. They identified an initial set of issues where the United States and Kenya

intend to develop an ambitious roadmap for enhanced cooperation with the goal of negotiating high-

standard commitments in order to achieve economically meaningful outcomes.

On November 3, 2022, the U.S. Trade Representative met virtually with the Cabinet Secretary for Kenya’s

Ministry of Investments, Trade, and Industry, and on December 12, 2022, the two met in person in

Washington DC. During both meetings, the two noted the shared objectives of their governments as

reflected in the July 14, 2022 joint statement launching the United States–Kenya STIP. They highlighted

how the initiative aligns with the Government of Kenya’s domestic objective of greater economic

inclusiveness as well as its objective of advancing African regional economic integration, and discussed

plans to begin expert engagement in early 2023 on the issues identified in the joint statement.

4. United States–European Union Trade and Technology Council

The United States–European Union Trade and Technology Council (TTC) was the principal coordination

mechanism through which the United States engaged the EU on trade policy during 2022. Across ten TTC

working groups, the United States and the EU are pursuing policy outcomes on trade and technology that

align with shared values and promote a rules-based economic system.

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 3

The TTC held its second ministerial meeting in Paris, France on May 16, 2022 and its third ministerial on

December 5, 2022 in College Park, Maryland. The U.S. Trade Representative co-chaired the two

ministerial meetings along with the U.S. Secretaries of State and Commerce, and the European Commission

Executive Vice Presidents.

During the second half of 2022, the two sides exchanged information and analysis on the market situation

of U.S. and EU medical device companies in China, with the goal of developing stronger joint and

coordinated responses to non-market policies and practices that are harming U.S. and EU companies.

In the December 5, 2022 ministerial, the United States and the EU announced plans to identify and address

policies of economic coercion pursued by autocratic governments and to explore potential coordinated or

joint efforts, bilaterally and with likeminded partners, to improve each side’s response to that coercion.

In December 2022, the TTC also launched a new Transatlantic Initiative on Sustainable Trade. This

initiative will enhance work across the TTC that strives to support the transition to low-carbon economies

by identifying actions in key areas of trade and environmental sustainability that support the shared twin

goals of a green and sustainable global economy and increased transatlantic trade and investment

In conjunction with the TTC, the U.S. Trade Representative, the U.S. Department of Labor, and the

European Commission Executive Vice President for Trade led a high-level meeting of the new tripartite

U.S.–EU Trade and Labor Dialogue (TALD), convening senior U.S. and EU labor and business leaders on

December 5, 2022, for a discussion on combating forced labor in global supply chains. Combating forced

labor and exploring the impact of digital trade on workers will serve as priority issues for the TALD.

For further discussion of labor-related activities, see Chapter III.H.1 Trade and Labor Free Trade

Agreements and Bilateral Activities.

The United States and the EU also announced in December their intention to compile and exchange

information on each side’s respective initiatives to use digital technology to simplify or reduce the cost of

doing business with governments, with the aim of potentially developing joint best practices on the use and

promotion of compatible digital tools. The two sides will continue work aimed at identifying potential

sector-specific and cross-sectoral initiatives in which strengthened cooperation on conformity assessment

could enhance transatlantic trade. The two sides will also explore ways in which new digital applications,

where permissible, can help U.S. and EU stakeholders better utilize existing mutual recognition agreements.

For more information on the initiatives launched by the TTC, see the U.S.–EU Joint Statement of the Trade

and Technology Council issued by the U.S. and EU TTC co-chairs.

5. Americas Partnership for Economic Prosperity

At the Summit of the Americas in June 2022, President Biden announced the Americas Partnership for

Economic Prosperity (APEP). APEP will include partners from across the Americas open to high standards

and initial consultations will include: reinvigorating regional economic institutions and mobilizing

investment; making more resilient supply chains; updating the basic bargain by making public investments

and innovations in public administration to make life better and fairer for our respective citizens; creating

clean energy jobs and advancing decarbonization and biodiversity; and, ensuring sustainable and inclusive

trade.

4 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

6. African Continental Free Trade Area Memorandum of Understanding

The U.S. Trade Representative and the African Continental Free Trade Area (AfCFTA) Secretary General

signed a Memorandum of Understanding (MOU) on December 14, 2022 at the U.S.–Africa Business Forum

during the U.S.–Africa Leaders Summit in Washington, D.C.

The MOU is framed on supporting the implementation of the AfCFTA, including its Protocol on Women

and Youth in Trade; promoting equitable, sustainable, and inclusive trade; boosting competitiveness and

attracting investment to the continent; diversifying trade to underserved groups; and, helping African

countries move into more advanced manufacturing in closer partnership with U.S. companies operating

across the continent. The MOU sets up an annual engagement between the U.S. Government and the

AfCFTA Secretariat to discuss the implementation of the MOU as well as quarterly meetings of technical

working groups (TWGs) to discuss areas of mutual interest. The TWGs will comprise experts from the

AfCFTA Secretariat, the Office of the United States Trade Representative, other U.S. Government

agencies, and other stakeholders. The TWGs will exchange information on best practices and have an open

dialogue to enhance the relationship between the United States and the AfCFTA Secretariat, the AfCFTA

State Parties, and related stakeholders.

B. Free Trade Agreements in Force

1. Australia

The United States–Australia Free Trade Agreement (FTA) entered into force on January 1, 2005.

Operation of the United States–Australia Free Trade Agreements

The United States–Australia Joint Committee is the central oversight body for the FTA. The United States

met regularly with Australia throughout 2022 to monitor implementation of the FTA and review concerns

about market access. On March 16, 2022, the United States and Australia held an FTA Joint Committee

meeting in Canberra, Australia. The two governments discussed a number of trade priorities and committed

to convening a meeting of the FTA Sanitary and Phytosanitary (SPS) Committee to discuss market access

concerns. On September 22, 2022, the United States and Australia held an FTA SPS Committee meeting.

The United States continued to work closely with Australia to deepen the bilateral trade relationship and

coordinate on issues of regional and international importance.

Agriculture

For a discussion of agriculture-related activities, see Chapter III.C.2 Agriculture and Trade Bilateral and

Regional Activities.

2. Bahrain

The United States–Bahrain Free Trade Agreement (FTA) entered into force on August 1, 2006. Under the

FTA, as of August 1, 2006, Bahrain provides duty-free access to 100 percent of the two-way trade in

industrial and consumer products, and trade in most agricultural products. In addition, under the FTA,

Bahrain opened its services market, which provides opportunities for U.S. financial services providers and

U.S. companies that offer telecommunication, audiovisual, express delivery, distribution, health care,

architecture, and engineering services. Under the 2018 United States–Bahrain Memorandum of

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 5

Understanding on Trade in Food and Agriculture Products, Bahrain continues to accept existing U.S. export

certifications for food and agricultural products.

The United States–Bahrain Bilateral Investment Treaty, which took effect in May 2001, covers investment

issues between the two countries.

Operation of the United States–Bahrain Free Trade Agreement

The United States–Bahrain Joint Committee is the central oversight body for the FTA. The Joint Committee

did not meet during 2022.

Labor

During 2022, the Office of the U.S. Trade Representative (USTR) and the U.S. Department of Labor

continued to monitor and engage with the Government of Bahrain on labor rights in Bahrain, in particular

with respect to employment discrimination and freedom of association related concerns that had been

highlighted initially during consultations that began in 2013 under the United States–Bahrain FTA.

For further discussion of labor-related activities, see Chapter III.H.1 Trade and Labor Free Trade

Agreements and Bilateral Activities.

3. Central America and the Dominican Republic

On August 5, 2004, the United States signed the Dominican Republic–Central America–United States Free

Trade Agreement (CAFTA–DR) with five Central American countries (Costa Rica, El Salvador,

Guatemala, Honduras, and Nicaragua) and the Dominican Republic. The Agreement has been in force

since January 1, 2009 for all seven countries that signed the CAFTA–DR. It entered into force for the

United States, El Salvador, Guatemala, Honduras, and Nicaragua in 2006, for the Dominican Republic on

March 1, 2007, and for Costa Rica on January 1, 2009.

The CAFTA–DR eliminates tariffs, reduces barriers to services, and promotes transparency and customs

and administrative efficiencies, facilitating intra-regional supply chains and integrated operations and

fostering greater prosperity, formal employment and inclusive economic opportunities throughout the

region. U.S. export and investment opportunities with Central America and the Dominican Republic have

continued to grow under the CAFTA–DR. All of the CAFTA–DR Parties have committed to strengthening

trade facilitation, regional supply chains, and implementation of the Agreement. U.S. consumer and

industrial goods may enter duty free in all the other CAFTA–DR member country markets. U.S. textile

and apparel goods meeting the Agreement’s rules of origin enter the other CAFTA–DR countries’ markets

duty free and quota free. Under the CAFTA–DR, tariff-rate quotas (TRQs) for sensitive agricultural

products will increase annually through 2025, after which the TRQs will be eliminated and the affected

products will enter other CAFTA–DR countries duty free.

Operation of the Dominican Republic–Central America–United States Free Trade Agreement

The CAFTA–DR Free Trade Commission is the central oversight body for the CAFTA–DR. The Free

Trade Commission is responsible for monitoring the implementation and administration of the Agreement,

including strengthening implementation, enhancing opportunities for small and medium-sized enterprises

(SMEs), and addressing labor and environmental issues. The CAFTA–DR Coordinators, who are technical

level staff of the Parties, maintain ongoing communication to follow up on agreements reached by the Free

6 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

Trade Commission. In addition, Coordinators advance technical and administrative implementation issues

under the CAFTA–DR, and define the agenda for meetings of the Free Trade Commission.

Agriculture

For a discussion on agriculture-related activities, see Chapter III.C.2 Agriculture and Trade Bilateral and

Regional Activities.

Environment

For a discussion on environment-related activities, see Chapter III.G.1 Trade and the Environment Free

Trade Agreements and Bilateral Activities.

Labor

Ongoing CAFTA–DR labor capacity building activities, including the exchange of views on best practices,

support efforts to promote labor rights and improve the enforcement of labor laws in the CAFTA–DR

countries. In 2022, both the U.S. Department of Labor (DOL) and the U.S. Agency for International

Development (USAID) continued to fund labor-related technical assistance projects that supported

CAFTA–DR objectives. The Department of State funded programs in Central America to combat labor

violence and to ensure employers create more gender-inclusive workplaces where gender discrimination is

appropriately addressed.

Dominican Republic

In June 2022, the Office of the U.S. Trade Representative (USTR) and the Government of the Dominican

Republic (GODR) announced the formation of a technical working group to improve labor law enforcement

in the Dominican sugar sector. The working group, which includes officials from the countries’ responsible

trade, labor, and foreign affairs ministries, takes into account the commitment of the two countries to

enforce labor laws, including those regarding forced labor, improve labor conditions under the CAFTA-

DR and in accordance with international standards, and continue their long-standing partnership on

addressing these issues.

In addition, the United States continued to engage throughout 2022 with the GODR, the sugar industry, and

civil society groups on the concerns identified in a 2013 DOL report, issued in response to allegations in a

submission from the public under the CAFTA–DR that the GODR had failed to enforce the country’s labor

laws in the sugar sector.

 In March 2022, a U.S. Government delegation visited sugarcane producing worksites and worker

communities to engage workers and civil society representatives and reiterated to the Ministries of

Labor and Foreign Affairs, at both high and technical levels, the need for accelerated progress to

address the continuing labor challenges in the sector. Although progress has been made, procedural

and methodological shortcomings in the labor inspections process remain.

 In September 2022, the DOL published its seventh periodic review of the 2013 report, which

detailed ongoing concerns with sugar sector workers’ working and living conditions. As part of

the U.S. Government’s efforts to address labor-related concerns, the DOL also detailed a staff

person to the U.S. Embassy in Santo Domingo and awarded a $3 million project to strengthen

worker engagement and empowerment in the sugar sector.

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 7

 The Dominican Republic Ministry of Labor continued its direct outreach on labor rights to

sugarcane cutters at all three major Dominican sugar companies, worked with stakeholders to

double the minimum wage for hourly workers in the sector, and for the first time convened civil

society groups working with these communities to elevate the voice of workers.

 Sugar producers have engaged in the process to varying degrees and have implemented some

reforms that address concerns raised in the submission and recommended in the DOL report.

In November 2022, the U.S. Department of Homeland Security Customs and Border Protection (CBP)

issued a withhold release order for all raw sugar and sugar-based products produced in the Dominican

Republic by Central Romana Corporation Limited based on information that reasonably indicates the use

of forced labor in the company's operations. The CBP, through an investigation initiated under Section 307

of the Tariff Act of 1930, identified five of the International Labor Organization’s (ILO) 11 indicators of

forced labor: abuse of vulnerability, isolation, withholding of wages, abusive working and living conditions,

and excessive overtime.

Throughout 2022, the U.S. Department of Labor provided technical assistance to help support labor law

enforcement and improve inspection case management systems and inspector preparation in agriculture

through the International Labor Organization.

Honduras

In 2015, a DOL report issued in response to a 2012 public submission under the CAFTA–DR led to the

signing of a Labor Rights Monitoring and Action Plan (MAP). Since that time, the United States and the

Government of Honduras have been working together to fulfill commitments Honduras made in the MAP,

including addressing legal and regulatory frameworks for labor rights, undertaking institutional

improvements, intensifying targeted enforcement, and improving transparency. Honduras has made some

significant progress in implementing the MAP over the past seven years, including passing a comprehensive

new labor inspection law in January 2017, issuing an implementing regulation for the law in July 2019,

adopting a child labor referral mechanism in August 2019, and convening numerous tripartite meetings

with private sector and labor stakeholders to discuss progress under the MAP. In 2022, the U.S.

Government conducted eight missions to Honduras to follow up on the MAP and encourage Honduras to

take the required actions to complete it. The Government of Honduras convened tripartite meetings in

March, May, July, August, and November 2022 to consult with stakeholders regarding progress on the

MAP and the development of a post-MAP framework for continuous improvements and transparency. The

U.S. Government and the Government of Honduras agreed to a final extension of the MAP that will end no

later than September 30, 2023, to ensure that the Honduran Government has a reasonable opportunity to

make the necessary changes in labor law administration.

The U.S. Government continued to provide a number of technical cooperation projects in Honduras to

support employment and labor rights, including a program funded by the Department of State to combat

labor violence mentioned above. The DOL continued funding an $11.6 million project to reduce child labor

and improve labor rights in support of the Government of Honduras’ implementation of MAP

commitments. The DOL also continued funding a $2 million project to improve the technical audit unit

within the Ministry of Labor and to improve Honduras’ technical capacity to collect fines, as well as a $2.5

million project with the ILO to combat child labor in the coffee sector.

Additional CAFTA–DR Labor-Related Technical Capacity Building

In support of the 2017 labor law reform in Costa Rica, the DOL continued funding a $2.5 million technical

assistance project to build the capacity of key Costa Rican agencies responsible for enforcing labor laws,

8 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

particularly the labor inspectorate and the labor courts, with respect to minimum wages, hours of work, and

occupational safety and health in the agricultural export sector. The project promotes access to labor rights

by workers in the agricultural sector through new mechanisms to file complaints before national

administrative and labor courts. The DOL funded a $3.75 million technical assistance project in Costa Rica

that supports vulnerable and marginalized youth in acquiring the skills to enter the job market, helps

companies develop apprenticeship or workplace-based training programs for vulnerable youth, and

supports efforts to strengthen the laws and policies for these programs. This project closed in 2022 and the

final evaluation report is available online.

The DOL also continued to fund a $2.5 million project implemented by the ILO to improve the enforcement

of acceptable conditions of work in the Guatemalan agricultural export sector. The project assisted the

Guatemalan Ministry of Labor to standardize the criteria for labor inspection, developed a procedural

manual for labor inspection of the General Labor Inspectorate, and trained new and existing labor

inspectors. It trained the judiciary on constitutional jurisprudence and international labor conventions and

is now developing an electronic case management system for pilot implementation in three labor inspection

offices.

The DOL continued funding additional labor capacity-building projects, including a $4 million project on

labor market information systems in El Salvador, Guatemala, and Honduras, implemented by American

Institutes for Research. That project ended in September 2022, and the final evaluation report and data

quality assessment are available online. The DOL also continued funding a research institute headquartered

in Washington, D.C., and a recently closed $17 million technical assistance project to support vocational

training and skill-building for at-risk youth and to prevent exploitative child labor practices in El Salvador

and Honduras.

In December 2021, the DOL awarded three new regional technical assistance projects in Guatemala, El

Salvador, and Honduras totaling $21.4 million. The projects focus on workers’ rights, workplace safety

and health and other acceptable conditions of work, child labor, and forced labor, as follows:

 A $5 million workers’ rights project led by the Solidarity Center to strengthen the capacity of

worker organizations in agricultural supply chains in Honduras and Guatemala and the maquila

sector in El Salvador. The project prioritizes underserved and indigenous communities and

includes a focus on gender and racial equity.

 An $8 million occupational safety and health project implemented by La Isla Network to support

sugarcane and other agricultural workers in El Salvador, Guatemala, and Honduras and

garment/textile workers in El Salvador with limited access to prevention, treatment and social

protections.

 An $8.4 million project that will work with civil society and workers' organizations in El Salvador,

Guatemala, and Honduras to strengthen their capacity and bolster their collaboration with

government agencies, the private sector, and other stakeholders to protect labor rights and reduce

child labor and forced labor. The project will focus on organizations that represent indigenous,

Afro-descendant, and Garifuna populations, while promoting gender and racial equity.

In 2022, the USAID Regional Human Rights and Democracy activity in Central America continued to build

capacity and advocate for labor rights. The USAID promoted the transfer of skills and experience from

high-capacity organizations working on labor inclusion in Mexico to Central American organizations,

including training 898 participants on labor inclusion of lesbian, gay, bisexual, transgender, and queer

(LGBTQI+) individuals, training 275 people with disabilities, and training 234 unionized individuals in

Honduras on topics such as negotiation, psychosocial support, and maternal rights. Through the ILO,

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 9

USAID also provided training to formalize small businesses in El Salvador, Guatemala, and Honduras.

Finally, the Independent Monitoring Group of El Salvador began training Salvadoran migrants who will

receive temporary H-2A visas to work in the United States on their labor rights.

For further discussion of labor-related activities, see Chapter III.H.1 Trade and Labor Free Trade

Agreements and Bilateral Activities.

Other Implementation Matters

Throughout 2022, the United States continued to advance its broad strategy with Central America to address

the root causes of migration, including strengthening inclusive economic prosperity, labor rights and

protections, democratic governance, and the rule of law. Through engagements with CAFTA–DR partner

countries and stakeholders, USTR focused on strengthening labor and environment standards, building

resilient supply chains, facilitating trade, and improving transparency and good regulatory practices, to

build sustainable and inclusive trade and economic opportunities and formal sector employment in the

region. CAFTA–DR Coordinators discussed policy cooperation and trade capacity building activities

related to improving efficiencies and expanding bilateral and intra-regional trade and investment

opportunities. They also discussed other regulatory practices to prioritize for improvement; strengthening

trade, investment, and the regional supply chain in the textiles and apparel sector; strengthening worker

rights and labor protections to foster inclusive economic, trade, and investment opportunities; and,

strengthening environmental protections to foster sustainable economic development and investment

opportunities.

CAFTA–DR Coordinators and various members of the Agricultural Review Commission (ARC) reviewed

issues under CAFTA-DR Article 3.18, (For more information, see Chapter III.C.2 Agriculture and Trade

Bilateral and Regional Activities) including the implementation and operation of the Agreement as it relates

to trade in agricultural goods. The United States and various CAFTA-DR countries also discussed advances

in agricultural technology, practices and productivity and technical assistance towards adapting to global

challenges, such as food security and climate change, and possible areas for capacity building to support

agricultural workforces and small-scale at-risk producers.

The United States also continued to work closely with the other CAFTA–DR Parties on bilateral and

regional matters related to implementation of the Agreement, including agricultural and sanitary and

phytosanitary (SPS) trade matters. The U.S. Government worked to improve the transparency and

effectiveness of Central American regulatory and customs/border practices, which has resulted in

facilitating customs procedures and trade. In 2022, the U.S. Government engaged with Guatemala to help

introduce an automated system which provides more transparency and helps clear bonded shipments more

quickly.

The Free Trade Commission has emphasized the need for greater regional integration, which the United

States continues to support through various trade capacity building efforts to promote economic prosperity.

These initiatives included efforts to support the U.S. textile and apparel industry by strengthening utilization

of the Agreement and regional supply chains. Throughout 2022, USTR undertook various efforts to

promote the CAFTA–DR supply chain and nearshoring, including ongoing work with the Inter-American

Development Bank on a CAFTA–DR Sourcing Database project containing elements to encourage regional

sourcing and support the short supply process by assisting producers to meet procedural and due diligence

requirements. USTR also organized a four-part CAFTA–DR Webinar training series to strengthen

understanding and utilization of the CAFTA–DR benefits. In coordination with the U.S. Department of

Commerce, USTR also carried out extensive consultations on how U.S. and CAFTA-DR partner country

stakeholders can make better use of CAFTA-DR’s short supply mechanism.

10 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

Trade Capacity Building

During 2022, USTR coordinated with U.S. Government trade-related agencies and CAFTA–DR partner

countries to identify and explore trade capacity building activities and to work with government agencies

and international donors to prioritize and coordinate technical assistance through the Trade Capacity

Building (TCB) Committee.

Trade capacity building programs and planning continued throughout 2022. USTR, along with the USAID

and other U.S. Government trade and donor agencies, such as the U.S. Departments of Agriculture,

Commerce, Labor, and State, carried out bilateral and regional projects with CAFTA–DR partner countries

to facilitate trade and inclusive economic opportunity, strengthen labor rights and protections, and increase

capacity within the CAFTA–DR countries.

During 2022, specific programs included the following:

 Building El Salvador’s Trade and Competitiveness in Textiles and Apparel to Strengthen Trade

and Regional Economic Prosperity program. This program engaged business, academia, and

government to strengthen human and institutional capacity to support the Salvadoran and regional

textile and apparel industry and enhance competitiveness and supply-chain opportunities

throughout the CAFTA–DR region. In 2022, several workshops and professional exchanges were

held via digital conferencing platforms on issues affecting the textile and apparel industry’s

competitiveness in the context of the global supply chain, utilization of the CAFTA–DR, and the

CAFTA-DR regional supply chain. The July 2022 culminating event showcased the

accomplishments of five-years of targeted trainings and workshops to develop knowledge and skills

in effective marketing, innovative product design, supply chain management, and maximizing the

use of CAFTA-DR textiles provisions to build inclusive trade, investment and employment

opportunities in the region.

 Central America Regional Trade Facilitation and Border Management project, which aims to

enhance economic growth in Central America by strengthening the region’s trade capacity and

competitiveness through increased regional integration and lower administrative costs associated

with trade. The project also supports a Coordinated Regional Border Management Academy to

certify border control officers, helping to ensure that procedures are followed according to a

uniform standard. In addition, the project provides technical assistance to trade and regulatory

agencies and regional business associations to comprehensively implement key elements of the

World Trade Organization (WTO) Trade Facilitation Agreement (TFA).

 Various workshops on the U.S. regulatory system, internal standards, and WTO obligations for

CAFTA-DR Parties. The purpose of these workshops was to highlight for the CAFTA–DR Parties

how the U.S. regulatory system operates, as well as support resolution of a number of outstanding

regulatory issues that disrupt trade between the United States and the other CAFTA–DR Parties.

 Central America Customs, Border Management, and Supply Chain Trade Facilitation program,

which provides technical assistance to the governments of El Salvador, Guatemala, and Honduras

on implementing transparency reforms to improve and simplify customs clearance procedures. The

program promotes economic prosperity objectives and compliance with the commitments outlined

in both the CAFTA–DR and the WTO TFA.

For further discussion of trade capacity building, see Chapter III.I Trade Capacity Building.

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 11

4. Chile

The United States–Chile Free Trade Agreement (FTA) entered into force on January 1, 2004. Under the

FTA, as of January 1, 2015, Chile provides duty-free access to all goods exports.

Operation of the United States–Chile Free Trade Agreement

The United States–Chile Free Trade Commission is the central oversight body for the FTA. The Free Trade

Commission last met in October 2018. In November 2022, a Deputy U.S. Trade Representative visited

Santiago to meet with the new Chilean Administration and ensure continuity in the trade relationship.

During the Deputy U.S. Trade Representative’s visit, the United States and Chile agreed to hold the next

Free Trade Commission meeting in 2023.

Environment

In 2022, the United States continued to monitor and enforce the Environment Chapter of the United States–

Chile FTA. In August 2022, the United States and Chile held the ninth meeting of the Environmental

Affairs Council (EAC) to review the Parties’ implementation of and compliance with Environment Chapter

obligations. The United States and Chile also convened the seventh meeting of the Joint Commission for

Environmental Cooperation (JCEC) in August 2022 to review activities under the 2018-2020 Work

Program for Environmental Cooperation and priorities for cooperation under the 2021-2024 Work Program.

The United States will continue to work closely with Chile on trade and environment issues through regular

exchanges with government officials, interagency collaboration, and stakeholder engagement.

For further discussion of environment-related activities, see Chapter III.G.I Trade and the Environment

Free Trade Agreements and Bilateral Activities.

Labor

The United States continued its engagement with Chile on labor issues in 2022, including by continuing a

cooperative dialogue to exchange information and best practices on labor matters under the FTA’s labor

cooperation mechanism. In its 2021 Report on Findings on the Worst Forms of Child Labor, the U.S.

Department of Labor recognized Chile as having made “moderate advancement” in its efforts to eliminate

the worst forms of child labor.

5. Colombia

The United States–Colombia Trade Promotion Agreement (CTPA) entered into force on May 15, 2012.

Under the Agreement, Colombia provides duty-free access to all U.S. consumer and industrial products.

More than half of U.S. agricultural exports to Colombia became duty free immediately upon entry into

force, with virtually all remaining tariffs on U.S. agricultural goods to be eliminated by 2026 (reflecting a

15-year phase-out period). Tariffs on a few most sensitive agricultural products will be phased out in 17 to

19 years after entry into force.

Operation of the United States–Colombia Trade Promotion Agreement

The United States–Colombia Free Trade Commission is the central oversight body for the Agreement.

From a compliance perspective, in 2022, the United States resolved issues related to express shipment and

closely tracked and discussed with Colombia matters regarding front-of-package labeling and other

technical barriers to trade. In October, a Deputy U.S. Trade Representative visited Bogota to meet with the

12 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

new Colombian Administration and ensure continuity in the trade relationship. During the visit, the United

States and Colombia agreed to hold the next Free Trade Commission meeting in 2023.

Agriculture

For a discussion of agriculture-related activities, see Chapter III.C.2 Agriculture and Trade Bilateral and

Regional Activities.

Environment

For a discussion of environment-related activities, see Chapter III.G.1 Trade and the Environment Free

Trade Agreements and Bilateral Activities.

Labor

The United States engaged with the Colombian Government on labor issues throughout 2022, including

through trips to Colombia by senior-level officials from both the Office of the United States Trade

Representative (USTR) and the U.S. Department of Labor (DOL). Much of the engagement focused on

Colombia’s ongoing efforts to address issues identified in the DOL’s January 2017 report in response to

the submission filed under the Labor Chapter of the Agreement in July 2016. The report focused on

improving Colombia’s labor law inspection system, improving the application and collection of fines for

employers who violate labor laws, combating abusive subcontracting and collective pacts, and improving

the investigation and prosecution of cases of violence and threats against unionists. USTR and DOL

officials frequently engaged with Colombian officials in Colombia and Washington, D.C. to discuss and

maintain close coordination on labor issues of interest, including those identified in the DOL’s 2021 second

periodic review of the 2017 DOL report. The DOL has posted a Labor Attache to the U.S. Embassy in

Bogota to monitor labor issues and engage with Colombian officials and labor stakeholders, highlighting

the U.S. Government’s commitment to ensuring close engagement with Colombia on labor rights.

In 2022, the Colombian Government took some steps to address the issues raised in the report, including

increasing its number of labor inspectors and receiving and resolving labor-law-related cases reported in its

Ministry of Labor’s electronic case management system. The United States will continue to work closely

with Colombia on remaining challenges, including the imposition and collection of fines for illegal

subcontracting and inspections in priority sectors under the Colombian Action Plan Related to Labor Rights

(Action Plan). The United States and Colombia launched the Action Plan in 2011 to provide detailed,

concrete steps that Colombia would take within specified time frames to address major areas of labor

concern.

In 2022, the DOL managed technical assistance projects totaling approximately $26 million that aim to

improve labor law enforcement in Colombia and promote labor rights covered by the Agreement. For

example, these projects strengthen labor law enforcement, advance labor law compliance in the port sector,

and address child labor and working conditions in coffee and in artisanal and small-scale coal and gold

mining. In its 2021 Report on the Findings on the Worst Forms of Child Labor, the DOL recognized

Colombia as having made “significant advancement” in its efforts to eliminate the worst forms of child

labor.

For further discussion of labor-related activities, see Chapter III.H.1 Trade and Labor Free Trade

Agreements and Bilateral Activities.

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 13

6. Israel

The United States–Israel Free Trade Agreement (FTA) entered into force on September 1, 1985. The

Agreement was the United States’ first FTA, and continues to serve as the foundation for the trade and

investment relationship between the United States and Israel.

Operation of the United States–Israel Free Trade Agreement

The United States–Israel Joint Committee is the central oversight body for the FTA. The governments

continue collaborative efforts to improve bilateral trade and investment., including with respect to Israel’s

progress in addressing a number of standards-related and customs barriers to bilateral trade, and possibilities

for further cooperation in the area of services, investment, and digital trade. Both countries continue to

work toward resolving these and additional trade impediments. In 2022, the Israel opened its market to

imports of U.S. processed meat products.

At a February 2016 Joint Committee meeting, Israel had proposed resuming negotiations on a permanent

successor agreement to the current United States–Israel Agreement on Trade in Agricultural Products

(ATAP). The current ATAP is the second of two temporary ATAPs that the United States and Israel have

negotiated due to a disagreement over interpretation of the FTA that arose after the Uruguay Round was

concluded. The first ATAP, negotiated in 1996, allowed for limited preferential tariff treatment for some

U.S. agricultural products. The 2004 successor ATAP achieved modest additional market access for U.S.

agricultural products. That ATAP was originally set to remain in effect until the end of 2008, but has been

continued each year since then through a series of one-year extensions. Under the 2004 ATAP, Israel

provides the United States less advantageous tariff treatment than the United States provides Israel: the

United States provides Israel with duty-free access to 90 percent of agricultural tariff lines, while Israel

provides the United States with duty-free access to only 72 percent of agricultural tariff lines. Because of

existing disparities, the United States remains committed to negotiating a more balanced permanent

successor agreement. Negotiations were last held in 2019. At the December 2020 Joint Committee

meeting, the United States and Israel reaffirmed their commitment to the negotiation of a permanent ATAP.

Agriculture

For a discussion of agriculture-related activities, see Chapter III.C.1 Agriculture and Trade Opening

Export Markets for American Agriculture.

7. Jordan

The United States–Jordan Free Trade Agreement (FTA) entered into force on December 17, 2001. Under

the FTA, as of January 1, 2010, Jordan provides duty-free access to substantially all U.S. exports.

Jordanian exporters benefit from the Qualifying Industrial Zones (QIZs) program established by the U.S.

Congress in 1996. The QIZ program allows products exported from Jordan with a specified amount of

Israeli content to enter the United States duty free if manufactured in Jordan, Egypt, or the West Bank and

Gaza. QIZ products accounted for about 2.3 percent of Jordanian exports to the United States in 2022. The

QIZ share of Jordanian exports is declining relative to the share of Jordanian exports shipped to the United

States under the FTA.

14 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

Operation of the United States–Jordan Free Trade Agreement

The United States–Jordan Joint Committee is the central oversight body for the FTA. During 2022, the

United States continued to press Jordan to allow the importation of U.S. genetically engineered food

products.

Jordanian barriers in government procurement remain a concern. The FTA does not contain government

procurement commitments, and Jordan is not a party to the WTO Agreement on Government Procurement.

Labor

The United States continued to monitor labor rights in Jordan pursuant to labor provisions of the FTA and

to work with Jordan in the area of labor standards. The United States and Jordan have previously recognized

serious labor concerns in Jordan’s garment factories, including anti-union discrimination against foreign workers,

poor conditions of accommodations for foreign workers, and gender discrimination and harassment. To address

these concerns, in 2013, the United States and Jordan developed the Implementation Plan Related to Working and

Living Conditions of Workers in Jordan (Implementation Plan). Pursuant to its commitments under the

Implementation Plan, Jordan has improved the coordination of inspections in garment factory dormitories and

continued those improvements in 2022.

The U.S. Government continued to engage with the Jordanian Ministry of Labor (MOL) on Implementation

Plan commitments and on addressing limitations to freedom of association and democratic worker

representation in 2022, and the International Labor Organization (ILO) Better Work program continued to

support Implementation Plan objectives. As part of this engagement, USTR and the U.S. Department of

Labor (DOL) held the third Labor Subcommittee meeting under the FTA and engaged extensively with

stakeholders in Amman in October 2022. The Labor Subcommittee reviewed implementation of the FTA’s

labor obligations and discussed areas of technical cooperation and capacity building. The Labor

Subcommittee meeting concluded with a public session and roundtable discussion with stakeholders from

Jordan’s worker organizations, businesses, and civil society organizations, which focused on increasing

women’s economic empowerment and increasing worker voice by raising awareness on labor rights and

joining unions.

The MOL continues to work with the DOL-funded ILO Better Work program to improve the understanding of

internationally recognized labor standards and the process for conducting audits in the garment sector. Jordan also

worked with the ILO Better Work program to ensure that factory-level audits are made publicly available through

the online transparency portal. In 2022, the ILO Better Work program supported the garment worker union in

executing a strategic plan to be more transparent and democratic, supported the establishment of a migrant

liaison to enable the garment worker union to better reach the 75 percent migrant workforce, and supported the

conclusion of the most recent collective bargaining agreement for the sector. The ILO Better Work program has

begun to develop a unit within the labor inspectorate to promote knowledge of labor standards and inspection best

practices within the MOL, and its pilot program to address the mental health of migrant workers resulted in ten

mental health providers offering services to workers, including a mix of telehealth and psychologists operating in

factory clinics. The DOL also continued to fund the U.S. Federal Mediation and Conciliation Services’ train-

the-trainers program within the Jordanian Ministry of Labor to governorates outside Amman to better

address collective disputes and enhanced training to include proactive conflict mitigation and mediation

strategies with the private sector and trade unions.

For further discussion of labor-related activities, see Chapter III.H.1 Trade and Labor Free Trade

Agreements and Bilateral Activities.

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 15

8. Korea

The United States–Korea Free Trade Agreement (KORUS) entered into force on March 15, 2012. In 2018,

the United States negotiated further amendments and modifications, which entered into force on January 1,

2019.

Operation of the United States–Korea Free Trade Agreement

The United States monitors and enforces implementation of KORUS commitments through the 21

committees and working groups established under the Agreement. Throughout 2022, the United States

continued to use the committees and working groups to raise and resolve trade issues and ensure Korea is

implementing its obligations under the Agreement. The Labor Affairs Council met in April 2022,

reinvigorating this channel of communication in line with a decision by the KORUS Joint Committee in

2021. The Committee on Agricultural Trade and Committee on Sanitary and Phytosanitary (SPS) Matters

convened virtually in February 2022, and USTR led mid-year meetings in Korea in August to take stock of

progress on issues raised in these committees. The Automotive Working Group, Financial Services

Committee, Committee on Trade in Goods, and Committee on Services & Investment met in November

2022. The Committee on Textiles & Apparel and Committee on Trade Remedies met in December 2022.

The next meetings of the Agricultural Trade and SPS committees are planned for early 2023.

Issues addressed in the 2022 meetings included: (1) impediments to U.S. meat and poultry exports; (2)

Korea’s approval process for genetically engineered products; (3) Korea’s positive list system for

pesticides; (4) Korea’s administration of its tariff-rate quotas on agricultural products; (5) automotive-

related regulations; (6) Korea’s restrictions on the supply of legal services; (7) Korea’s implementation of

KORUS obligations related to cross-border data transfers by financial service providers; (8) regulations

affecting fair market access for online content; and, (9) procurement of cloud computing services.

The United States also addressed KORUS compliance and other trade issues through regular inter-sessional

meetings and other engagements with the Korean Government. Throughout 2022, USTR continued to lead

extensive U.S. Government engagement with Korea on agricultural biotechnology. This engagement

provided the opportunity to share information on science-based policy and regulatory approaches in the

United States that enable access to established and emerging technologies, while providing more

meaningful opportunities for private sector technology innovators to engage with policymakers in Korea.

Agriculture

For further discussion of agriculture-related activities, see Chapter III.C.2 Agriculture and Trade Bilateral

and Regional Activities.

Labor

For a discussion of labor-related activities, see Chapter III.H.1 Trade and Labor Free Trade Agreements

and Bilateral Activities.

9. Mexico and Canada

The United States–Mexico–Canada Agreement (USMCA) entered into force on July 1, 2020. The USMCA

maintains the zero tariffs among the three countries that were in place under the North American Free Trade

Agreement (NAFTA), while also modernizing the NAFTA to include provisions covering digital trade and

small and medium-sized enterprises (SMEs). The USMCA importantly recognizes that SMEs are a driving

16 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

force of economic growth and includes new mechanisms to help SMEs make better use of the USMCA.

(For further information, see Chapter III.B Small and Medium-Sized Business Initiative.)

The USMCA features strong, enforceable labor and environmental obligations in its core text, including a

facility-specific Rapid Response Mechanism that provides for quick review of alleged denials of workers'

rights to freedom of association and collective bargaining. The USMCA includes provisions to promote

gender equity in relevant chapters, such as cooperation on eliminating employment discrimination,

including on the basis of sex; promoting corporate social responsibility, including with respect to gender

equality; and, SMEs, which are inclusive of women-owned businesses. (For further information, see

Chapter III.A.3 Advancing Gender Equity and Equality and Women’s Economic Empowerment in Trade

Policy.)

The USMCA includes updated rules of origin for automobiles and automotive parts that create strong

incentives to invest and manufacture in the United States and North America more broadly, ensuring that

benefits of the USMCA provisions accrue to the Parties. The USMCA also contains important

improvements that benefit American farmers, ranchers, and agribusinesses, including expanded access into

the Canadian market for U.S. dairy, poultry, and egg products. (For further information, see Chapter

III.C.2 Agriculture and Trade Bilateral and Regional Activities.)

The USMCA includes strong commitments on digital trade, investment, financial services, and intellectual

property rights. It addresses problematic non-tariff barriers, which can hinder U.S. exports, through new

provisions on transparency and regulatory matters, including chapters covering technical barriers to trade,

sanitary and phytosanitary measures, and a new chapter on good regulatory practices. Finally, the USMCA

contains provisions to combat subsidies and non-market practices that have the potential to disadvantage

American workers and businesses, including a chapter to address unfair currency practices, rules on trade

distortions caused by state-owned enterprises and transparency obligations with respect to any USMCA

Party’s future trade negotiations with non-market economies.

The first Free Trade Commission meeting under the USMCA took place on May 18, 2021, and a second

Free Trade Commission meeting took place on July 8, 2022. During 2022, the following committees

established by the USMCA convened: Rules of Origin and Origin Procedures; Textiles and Apparel Trade

Matters; Trade Facilitation; Sanitary and Phytosanitary Measures; Technical Barriers to Trade;

Transportation Services; Financial Services; Intellectual Property Rights; State-Owned Enterprises and

Designated Monopolies; Small and Medium-Sized Enterprises; North American Competitiveness; Good

Regulatory Practices; Environment; and, Temporary Entry.

Operation of the USMCA

Automotive Rules

The USMCA contains new rules of origin for motor vehicles, which require a specific amount of North

American content in the final vehicle. The USMCA raises regional value content requirements to 75

percent for automobiles. The USMCA requires that at least 70 percent of a producer’s steel and aluminum

purchases originate in North America. The USMCA also introduced a new labor value content rule that

requires that a certain percentage of qualifying vehicles be produced by employees making an average of

at least $16 per hour.

The USMCA implementing legislation required the establishment of an Interagency Committee on Trade

in Automotive Goods (Interagency Autos Committee), which was established on February 28, 2020. The

Interagency Autos Committee met regularly throughout 2022 to monitor the implementation of the

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 17

USMCA’s automotive rules of origin, including the alternative staging regime and implementation of the

Uniform Regulations.

In order to provide vehicle manufacturers time to adjust to these new requirements, the USMCA provides

producers with the opportunity to apply for an alternative staging regime that allows producers to gradually

meet regional value content levels for up to five years before satisfying the standard requirements.

Producers are required to report annually to the Office of the U.S. Trade Representative (USTR) on the

operation of their approved alternative staging regime, as well as the status and progress of their efforts to

utilize more U.S. and North American content in order to meet the standard USMCA automotive rules of

origin.

Agriculture

For a discussion of agriculture-related activities, see Chapter III.C.2 Agriculture and Trade Bilateral and

Regional Activities and Chapter III.C.4 Agriculture and Trade Enforcing Trade Agreements for American

Agriculture.

Environment

The USMCA Environment Chapter obligations are fully enforceable under the USMCA’s dispute

settlement mechanism and address key environmental challenges, such as illegal, unreported, and

unregulated (IUU) fishing and disciplining harmful fisheries subsidies. The USMCA commits the United

States, Mexico, and Canada to take actions to combat and prevent trafficking in timber, fish, and other

wildlife, and includes provisions to address other environmental issues, such as air quality and marine litter.

The United States–Mexico–Canada Agreement Implementation Act (P.L. 116-113) (USMCA

Implementation Act) allocates over $400 million in new resources to agencies to support cooperation and

enhanced monitoring and enforcement of USMCA environment provisions, including resources to support

the construction of high-priority wastewater facilities along the United States–Mexico border as well as

cooperation to combat IUU fishing and address marine litter. USTR was allocated $60 million of these

resources over four years to bolster monitoring and enforcement of USMCA obligations. These resources

supported the Interagency Environment Committee to monitor and enforce USMCA environmental

obligations and three environment attaché positions in the U.S. Embassy in Mexico City, Mexico, to liaise

directly with government, industry, and civil society counterparts to further assist with monitoring and

enforcement of environmental obligations. The resources allocated to USTR have enabled it to strengthen

other U.S. Government agencies’ capacity to deliver on their respective monitoring and enforcement

mandates, to include providing additional resources that enhance U.S. intelligence and enforcement

capacity; promote sustainable forest management and combat illegal logging; and, promote sustainable

fisheries management and conservation of marine species.

In parallel with the USMCA Environment Chapter, the Parties agreed to continue their longstanding and

successful history of environmental cooperation under a modernized Commission on Environmental

Cooperation, as outlined in the new Environmental Cooperation Agreement (ECA), which entered into

force on July 1, 2020. Among other objectives, the ECA supports the implementation of the USMCA

Environment Chapter commitments. The ECA facilitates trilateral cooperation in a variety of areas,

including efforts to reduce pollution, strengthen environmental governance, conserve biological diversity,

and sustainably manage natural resources. The ECA updates and supersedes the North American

Agreement on Environmental Cooperation.

For further discussion of the USMCA Environment Chapter, see Chapter III.G.1 Trade and the

Environment Free Trade Agreements and Bilateral Activities.

18 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

Labor

The USMCA’s robust and comprehensive labor provisions are fully incorporated into its core text and fully

enforceable under the USMCA’s dispute settlement mechanism. Among other obligations, the USMCA

includes provisions requiring Parties to take measures to prohibit the importation of goods produced by

forced labor and to address violence against workers exercising their labor rights. The USMCA also

includes an innovative Rapid Response Mechanism (RRM) in the dispute settlement chapter to address

protection of association and collective bargaining rights at the facility level. The new mechanism provides

for the suspension of USMCA tariff benefits or the imposition of other penalties, such as blocking imports

from businesses that are repeat offenders, in cases of non-compliance with key labor obligations. In 2022,

the United States initiated the RRM three times, seeking review by the Government of Mexico for alleged

denials of rights at the Panasonic Automotive Systems de Mexico, S.A. de C.V. facility in Reynosa,

Tamaulipas; the Teksid Hierro de Mexico, S.A. de C.V. facility in Frontera, Coahuila; and the Manufacturas

VU facility in Piedras Negras, Coahuila. In addition, the U.S. Government engaged with Mexico to

highlight issues at two other facilities without invoking the mechanism. All of these actions resulted in

outcomes that are producing important, concrete results for workers, such as reinstatement and backpay for

dismissed workers, increased opportunities for unions to organize and compete on equal footing, and union

representation elections, in which workers selected unions to represent them in free and fair elections.

The USMCA also includes a Labor Chapter Annex that required Mexico to overhaul its system of labor

justice prior to entry into force to ensure that workers have the right to secret ballot votes to elect union

leadership and to approve or reject new and existing collective bargaining agreements. Mexico enacted

these labor law reforms in 2019 and instituted a phased approach to initiating the operation of a new Federal

Conciliation and Labor Registration Center, a system of local conciliation centers and labor courts

throughout the country. In 2022, Mexico initiated the third and final phase of the labor law reform, meaning

the entire country is now operating under the new labor justice system. Throughout 2022, the U.S.

Government continued to consult closely with the Mexican Government regarding the implementation of

the reform to ensure compliance with Mexico’s obligations under the USMCA, including through the

Interagency Labor Committee for Monitoring and Enforcement (Interagency Labor Committee).

The Interagency Labor Committee for Monitoring and Enforcement, established in 2020 and co-chaired by

the U.S. Trade Representative and the Secretary of Labor, met regularly in 2022 to review labor rights

issues in Mexico and prepare reports to the U.S. Congress.

For further discussion of labor-related activities, see Chapter III.H.1 Trade and Labor Free Trade

Agreements and Bilateral Activities.

10. Morocco

The United States–Morocco Free Trade Agreement (FTA) entered into force on January 1, 2006. The FTA

has supported the ongoing economic and political reforms in Morocco and has laid the groundwork for

improved commercial opportunities for U.S. exports to Morocco in several agricultural and industrial

sectors.

Operation of the United States–Morocco Free Trade Agreement

The United States–Morocco Joint Committee (JC) is the central oversight body for the FTA. During the

July 16, 2019 meeting, the JC explored labor, environment, agricultural trade, customs, and intellectual

property protection. The COVID-19 pandemic prevented JC meetings in 2020 and 2021, and scheduling

challenges have delayed the next meeting until 2023. Discussions with Morocco since the 2019 meeting

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 19

have focused on various agricultural and sanitary and phytosanitary (SPS) issues, geographical indications,

certain customs issues, intellectual property protection, and a number of textile and apparel matters.

Labor

In 2022, the Office of the U.S. Trade Representative (USTR) continued to monitor labor issues in Morocco.

Morocco continued to implement a new domestic worker law despite complications posed by the COVID-

19 pandemic. The law extends protections and benefits to domestic workers by setting a minimum wage,

establishing a minimum age for employment, limiting weekly hours of work, and providing such workers

with a day of rest. The law addresses an area of concern raised by the United States during the 2017 and

2019 FTA JC meetings. In its 2021 Report on the Findings on the Worst Forms of Child Labor, DOL

recognized Morocco as having made “moderate advancement” in its efforts to eliminate the worst forms of

child labor.

11. Oman

The United States–Oman Free Trade Agreement (FTA) entered into force on January 1, 2009. The FTA,

along with other U.S. FTAs in the Middle East and North Africa (MENA) region, promotes economic

reform and openness throughout the region. Under the FTA, Oman provides duty-free access to all

industrial and consumer products. The FTA also contains comprehensive obligations for services and

investment.

Operation of the United States-Oman Free Trade Agreement

The United States–Oman Joint Committee is the central oversight body for the FTA. The Joint Committee

did not meet in 2022.

Labor

As a result of the process for bringing the FTA into force, Oman enacted major labor reforms in 2006,

allowing for the formation of trade unions in Oman for the first time. Regulations to implement the reforms

provided for the establishment of the General Federation of Oman Trade Unions (now the General

Federation of Oman Workers), which held its founding conference in 2010. Oman has since seen an

increase in unionization with over 270 enterprise-level unions and several sectoral sub-federations for trade

unions established by the beginning of 2020, including in the oil, gas, and industrial sectors. In 2022, the

Office of the U.S. Trade Representative (USTR) and the U.S. Department of Labor (DOL) continued to

monitor labor rights in Oman pursuant to labor provisions of the FTA. In its 2021 Report on the Findings

on the Worst Forms of Child Labor, the DOL recognized Oman as having made “moderate advancement”

in its efforts to eliminate the worst forms of child labor, including by adopting a new Trafficking in Persons

National Action Plan for 2021–2023.

12. Panama

The United States–Panama Trade Promotion Agreement entered into force on October 31, 2012. Under

the Agreement, Panama provides duty-free access to all U.S. consumer and industrial products. Nearly half

of U.S. agricultural exports immediately became duty free upon entry into force, with remaining tariffs on

most U.S. agricultural goods to be eliminated by January 1, 2026. Tariffs on most sensitive agricultural

products will be phased out 18 to 20 years after entry into force. The Agreement also provides access to

Panama’s estimated $45 billion services market.

20 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

Prior to the Agreement’s entry into force, Panama improved its tax transparency practices, including via

signature of a Tax Information Exchange Agreement with the United States which entered into force in

2011.

Operation of the United States–Panama Trade Promotion Agreement

The United States–Panama Free Trade Commission is the central oversight body for the Agreement. The

United States and Panama continued to work cooperatively in 2022 to address remaining implementation

issues, resulting in new opportunities for traders and investors.

The Technical Capacity Building (TCB) Committee held its inaugural meeting on July 27, 2022. Through

funding provided by the U.S. Department of Agriculture, the United States is currently supporting three

TCB programs in the agricultural sector in Panama.

Agriculture

For a discussion of agriculture-related activities, see Chapter III.C.2 Agriculture and Trade Bilateral and

Regional Activities.

Environment

In December 2022, the United States and Panama held meetings of the Environmental Affairs Council and

Environmental Cooperation Commission in Panama City, Panama. During the meetings, the United States

and Panama provided updates on respective progress to implement the Trade Promotion Agreement

Environment Chapter and agreed on a new environmental cooperation work program for 2023 to 2026

under the United States-Panama Environmental Cooperation Agreement (ECA).

For a discussion of environment-related activities, see Chapter III.G.1 Trade and Environment Free Trade

Agreements and Bilateral Activities.

Labor

In conjunction with the Cooperative Labor Dialogue under the Trade Promotion Agreement, in 2022 the

U.S. Federal Mediation and Conciliation Service continued to provide trainings to Panama’s Inter-

American School for Social Dialogue, Tripartism and Conflict Resolution. In addition, the U.S.

Government conducted a monitoring and engagement trip in August 2022 to meet with Panama’s Ministry

of Labor and Ministry of Trade and Industry, labor unions, the private sector, human rights advocates, and

academia. Both governments expressed interest in deepening collaboration under the Labor Cooperation

and Capacity Building Mechanism of the Trade Promotion Agreement.

13. Peru

The United States–Peru Trade Promotion Agreement (PTPA) entered into force on February 1, 2009.

Under the Agreement, customs duties for qualifying U.S. goods have been eliminated on substantially all

Peruvian tariff lines. Peru will continue to reduce duties each January 1, with all remaining tariffs, which

apply only to select agricultural products, to be eliminated by 2026.

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 21

Operation of the United States–Peru Trade Promotion Agreement

The United States–Peru Free Trade Commission is the central oversight body for the Agreement. The Free

Trade Commission last met in September of 2018.

Agriculture

For a discussion on agriculture-related activities, see Chapter III.C.2 Agriculture and Trade Bilateral and

Regional Activities.

Environment

The United States continued to work with Peru on logging issues under the Annex on Forest Sector

Governance (Forest Annex). The Forest Annex includes concrete steps Peru must take to strengthen forest

sector governance and combat illegal logging and illegal trade in timber and wildlife products. The Forest

Annex also includes monitoring tools, such as a requirement that Peru conduct audits of producers and

exporters, as well as verifications of particular timber shipments upon request from the United States.

In July 2022, the United States took action to continue to block timber imports from Inversiones WCA

E.I.R.L. (WCA), a Peruvian exporter, based on illegally harvested timber found in its supply chain. The

denial of entry order was scheduled to lapse in July 2022. However, as of that date, the Government of

Peru had not demonstrated that WCA is complying with all applicable laws, regulations, and other measures

of Peru governing the harvest of and trade in timber products. Accordingly, the Interagency Committee on

Trade in Timber Products from Peru directed the U.S. Department of Homeland Security Customs and

Border Protection to deny entry to any future shipments of timber products originating from Peru that were

produced or exported by WCA until the Government of Peru demonstrates that WCA has complied with

all applicable laws and regulations.

In November 2022, the United States and Peru held meetings of the Environmental Affairs Council, Sub-

Committee on Forest Sector Governance, and Environmental Cooperation Commission. During the

meetings, the Sub-Committee reviewed implementation of the Forest Annex, including relevant provisions

of the Annex concerning audits of timber producers and exporters, among other issues. The United States

continues to prioritize monitoring and enforcement of environmental commitments in the PTPA and the

Forest Annex.

For further discussion on environment-related activities, see Chapter III.G.1 Trade and the Environment

Free Trade Agreements and Bilateral Activities.

Labor

In 2022, the U.S. Government continued to engage with the Government of Peru, Peruvian unions, and

industry representatives on the issues identified in the March 2016 U.S. Department of Labor (DOL) report

prepared in response to a July 2015 submission from civil society under the Agreement’s Labor Chapter.

The submission raised issues related to Peru’s adoption and maintenance of laws and practices that protect

fundamental labor rights and to Peru’s effective enforcement of labor laws, particularly with regard to

Peru’s laws on non-traditional exports and the use of temporary contracts in the textiles and agricultural

sectors.

In its 2021 Report on the Findings on the Worst Forms of Child Labor, the DOL recognized Peru as having

made “moderate advancement” in its efforts to eliminate the worst forms of child labor.

22 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

In 2022, the DOL continued to fund three technical assistance projects to improve Peru’s enforcement of

labor laws and compliance with the Agreement’s Labor Chapter. One project engaged workers and civil

society to strengthen labor law enforcement. The other two projects focused on reducing child labor and

forced labor, including by assisting the Peruvian Government and labor stakeholders to build their capacity

to prevent, detect, and eliminate forced labor and labor trafficking in agricultural and rural areas. The DOL

is supporting technical assistance for decent working conditions in the fishing sector with pilot activities in

Peru and Ecuador. Peru is also one of three countries (in addition to Brazil and Colombia) included in a

DOL-funded project to promote worker voice, advance unionization and collective bargaining in key trade

sectors, and elevate unions’ substantive participation in social dialogue and policy deliberations with

government and industry representatives.

For further discussion on labor-related activities, see Chapter III.H.1 Trade and Labor Free Trade

Agreements and Bilateral Activities.

14. Singapore

The United States–Singapore Free Trade Agreement (FTA) entered into force on January 1, 2004.

Operation of the United States–Singapore Free Trade Agreement

The United States–Singapore Joint Committee is the central oversight body for the FTA. The Joint

Committee last met in October 2021. The United States and Singapore continue to work together on shared

areas of interest through the FTA framework, including on environment, labor, digital trade, supply chains,

and intellectual property. In 2022, the United States also continued to work closely with Singapore to

deepen the bilateral trade relationship and coordinate on issues of regional and international importance.

Environment

For a discussion of environment-related activities, see Chapter III.G.1 Trade and Environment Free Trade

Agreements and Bilateral Activities

C. Other Agreements and Trade-Related Initiatives

1. The Americas

Free Trade Agreements

The United States has 6 free trade agreements (FTAs) with 12 countries in the Americas: Mexico and

Canada under the United States–Mexico–Canada Agreement (USMCA) (2020), which replaced the North

American Free Trade Agreement (NAFTA) (1994); Chile (2004); Costa Rica, El Salvador, Guatemala,

Honduras, Nicaragua, and the Dominican Republic under the Dominican Republic–Central America–

United States Free Trade Agreement (2006-2009); Peru (2009); Colombia (2012); and, Panama (2012).

For further discussion of these trade agreements, see Chapter I.B Free Trade Agreements in Force.

Trade and Investment Framework Agreements and Other Bilateral Trade Mechanisms

The Office of the U.S. Trade Representative (USTR) chairs bilateral meetings with non-FTA partners in

the Americas to discuss a wide range of issues, including trade related aspects of labor and the environment,

market opening opportunities, regulatory matters, enhancing opportunities for small and medium-sized

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 23

enterprises (SMEs), and resolving trade issues. The United States has trade and investment framework

agreements (TIFAs) or trade and investment council agreements (TICs) in force with Argentina, Bolivia,

the Caribbean Community, Ecuador, Paraguay, and Uruguay. The United States has an Agreement on

Trade and Economic Cooperation (ATEC) in force with Brazil.

In 2022, the United States continued its engagement with its non-FTA partners in the region with the goal

of resolving trade problems and promoting inclusive trade policies. The activities below describe the key

outcomes that advance the U.S. trade and investment agenda with these countries. In all of these

engagements, USTR has emphasized labor standards, environmental sustainability, agriculture and

inclusive trade as fundamental for advancing this work.

For further discussion of labor-, environmental-, agricultural-, and inclusivity-related activities, see

Chapter III.H.1 Trade and Labor Free Trade Agreements and Bilateral Activities, Chapter III.G.1 Trade

and the Environment Free Trade Agreements and Bilateral Activities, Chapter III.C.1 Agriculture and

Trade Opening Export Markets for American Agriculture and Chapter III.C.2 Agriculture and Trade

Bilateral and Regional Activities, and Chapter III.A Promoting Equitable, Inclusive and Durable Trade

Policy and Expanding Stakeholder Engagement, respectively.

Argentina

The United States–Argentina TIFA established the United States–Argentina Council on Trade and

Investment which serves as a venue for engagement on a broad range of bilateral trade issues, such as

market access, intellectual property (IP) rights and protection, and cooperation on shared objectives at the

World Trade Organization (WTO) and other multilateral fora. In November 2022 in Buenos Aires,

Argentina, the Council held its first meeting since 2018. The meeting covered a wide range of trade

concerns, investment opportunities, and possibilities for engagement in areas such as good regulatory

practice, energy transition, and digital economy.

The Innovation and Creativity Forum for Economic Development (the Forum), established under the TIFA,

serves as a forum to discuss IP issues of mutual interest, including geographical indications, industrial

designs, and the importance of IP protections for SMEs. The Forum met in December 2022, in Buenos

Aires, the first in person session since 2019. The United States and Argentina discussed the importance of

enforcement and other IP issues, in addition to policies to support innovation.

Brazil

Bilateral dialogue with Brazil is conducted through the United States–Brazil Commission on Economic and

Trade Relations, established by the ATEC, which entered into force in 2011. The ATEC is a forum to

deepen bilateral engagement and expand the trade and investment relationship on a broad range of issues,

including trade facilitation, IP rights and innovation, and technical barriers to trade. In early 2022, the

United States–Brazil Protocol to the Agreement on Trade and Economic Cooperation Relating to Trade

Rules and Transparency entered into force. The new Protocol comprises annexes on Anti-Corruption, Good

Regulatory Practices, Trade Facilitation and Customs Administration. These high-standard commitments

are essential foundations for trade.

In March 2022, senior USTR officials traveled to Brazil to discuss implementation of the Protocol and other

mutual priorities for the trade relationship. The senior USTR officials also met with stakeholders

specializing in labor issues, environmental issues, and women’s economic development to discuss

opportunities for cooperation in Brazil.

24 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

During 2022, the United States and Brazil also engaged in technical work in other areas, such as technical

barriers to trade, intellectual property (IP) rights, and agriculture. In addition, the United States raised a

range of bilateral issues in the WTO Trade Policy Review of Brazil in November 2022.

Ecuador

The United States–Ecuador Trade and Investment Council (TIC) entered into force on July 23, 1990. Six

working groups operate under the TIC: (1) labor; (2) environment; (3) agriculture; (4) IP; (5) market access,

customs, and trade facilitation; and, (6) investment, services, and digital trade. On August 5, 2021, the

United States–Ecuador Protocol on Trade Rules and Transparency entered into force. The Protocol is an

update to the TIC, and establishes high-standard trade rules with Ecuador, based on the USMCA and a

similar Protocol with Brazil. It comprises four annexes, each with state-of-the-art provisions for trade

agreements: (1) Anti-Corruption; (2) Good Regulatory Practices; (3) Small and Medium-Sized Enterprises;

and, (4) Customs Administration and Trade Facilitation.

The TIC met in February 2022 in Guayaquil, Ecuador and discussed: improving the agriculture import

licensing system; progress made to eradicate child labor and improve labor inspections; progress in the

areas of conservation of natural resources such as fisheries, forests and wildlife; steps undertaken to address

climate change and marine debris; and, areas for future technical cooperation. Implementation of the

Protocol on Trade Rules and Transparency was also reviewed. In addition, an SME Roundtable was

convened with representatives of women and Indigenous entrepreneurs. In November 2022, the two

governments agreed to expand the Protocol on Trade Rules and Transparency, and form a new Fair Trade

Working Group under the TIC.

Paraguay

The United States–Paraguay TIFA entered into force in March 2021. In September 2022 in Washington,

D.C. the United States and Paraguay convened the first meeting of the Trade and Investment Council under

the Paraguay TIFA. During the wide-ranging discussions, the two countries agreed on further work in areas

including agricultural trade, anti-corruption, good regulatory practices, digital economy, and trade

facilitation. In addition, they finalized a Work Plan on Intellectual Property (IP) rights to improve the

situation for IP in Paraguay. Paraguay is on the Special 301 Watch List.

Uruguay

The United States–Uruguay TIFA entered into force on January 25, 2007. In 2022, the United States and

Uruguay continued negotiations on an update to the TIFA with a Protocol on Trade Rules and Transparency.

Those discussions were launched as an outcome of meetings under the TIFA in 2021.

2. Europe and the Middle East

The United States in 2022 engaged through its free trade agreements (FTAs), bilateral investment treaties

(BITs), negotiations on select issues, trade and investment framework agreements (TIFAs), enforcement

tools, and other mechanisms with the European Union (EU) and its 27 Member States, non-EU European

countries, Russia, certain countries of western Eurasia, and countries in the Middle East and North Africa

(MENA). The goals of these engagements were to improve protection of worker rights, foster partner

country policies grounded in the rules of law, eliminate trade barriers, increase U.S. exports, encourage the

development of intraregional economic engagement, and, where relevant, advance countries’ accessions to

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 25

the World Trade Organization (WTO). (For a discussion of WTO accessions, see Chapter IV.G.6

Accessions to the World Trade Organization.)

In 2022, the United States also engaged with the EU to reduce non-tariff barriers to U.S. exports and to

strengthen cooperation on global trade issues and on third countries of common concern, especially China.

The United States continued to press Russia to fully implement its WTO commitments and promoted

policies in Eurasia to promote transparent and predictable markets based on the rule of law in an effort to

further economic security in the region. U.S. efforts in the MENA region centered on promoting further

economic reforms in partner countries, with a view toward encouraging those countries to open their

economies to further engagement with the United States.

European Union

The U.S. trade and investment relationship with the EU is the largest and most complex economic

relationship in the world. Transatlantic trade flows (goods and services trade plus earnings and payments

on investment) averaged an estimated $4.5 billion each day of 2022 (based on the first three quarters of

2021). The total stock of transatlantic investment was $5 trillion in 2021 (latest data available).

The United States–European Union Trade and Technology Council (TTC) was the principal coordination

mechanism through which the United States engaged the EU on trade policy during 2022. Across ten TTC

working groups, the United States and the EU are pursuing policy outcomes on trade and technology that

align with our shared values and promote a rules-based economic system. The TTC held two ministerial

meetings during 2022, each co-chaired by the U.S. Trade Representative. At the conclusion of the

December 5, 2022 TTC ministerial meeting, the U.S. Trade Representative and the other U.S. and EU TTC

co-chairs endorsed or announced progress on several initiatives aimed at promoting a stronger transatlantic

trade relationship and more sustainable and resilient global trade. The subject matter of these initiatives

spanned shared concerns about trade policy and labor standards, environmentally sustainable trade,

economic coercion, conformity assessment, digital tools for stakeholders engaged in trade, and China’s

non-market policies and practices. (For further discussion, see section I.A.4 United States–European Union

Trade and Technology Council.)

Outside of the TTC, the Office of the U.S. Trade Representative (USTR) continued robust bilateral

engagement with the EU during 2022 on non-tariff barrier concerns across a broad range of sectors,

including on EU legislation impacting U.S. digital services suppliers and companies in a variety of

manufacturing sectors.

United Kingdom

In 2022, the United States engaged with the United Kingdom (UK), including through the Future of Atlantic

Trade Dialogues, the U.S.–UK Small and Medium-Sized Enterprises (SME) Dialogue and multiple Trade

Minister and staff level meetings, to discuss opportunities to advance our bilateral and multilateral trade

and investment relationship. In March and April 2022, the United States and the UK held the Future of

Atlantic Trade Dialogues in Baltimore, Maryland, and Aberdeen, Scotland, respectively. Led by the U.S.

Trade Representative and the UK Secretary of State for International Trade, the Dialogues involved a

diverse and inclusive group of U.S. and UK stakeholders from the labor, environmental, business, and other

civil society communities. The Dialogues used stakeholder roundtables and bilateral meetings to discuss

how the United States and the UK could advance an inclusive, resilient, and deeper bilateral trade and

investment relationship. In June and November 2022, the United States and the UK held meetings of the

U.S.–UK SME Dialogue in Boston, Massachusetts, and Edinburgh, Scotland, respectively, to engage SME

26 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

stakeholders on opportunities and challenges in U.S.–UK trade (For further discussion, see Chapter III.B

Small and Medium-Sized Enterprise Initiative.)

Turkey and the Middle East and North Africa

Rapid changes and political instability in the MENA region over the past decade have posed ongoing

challenges with respect to U.S. trade and investment relations with MENA countries. The region continues

to see uneven progress on economic and trade reforms, and many of the underlying economic drivers of

political and social instability have yet to be addressed as of December 31, 2022. However, changing

regional dynamics have led to some possible new opportunities for U.S. engagement. Throughout 2022,

USTR continued exploring, in consultation with other U.S. Government agencies, as well as with outside

experts and stakeholders in the United States, Turkey, and MENA countries, prospective areas for trade

and investment cooperation, including the realization of worker-centered trade policy goals.

In 2022, the United States continued to monitor, implement, and enforce existing U.S. FTAs in the region

(Bahrain, Israel, Jordan, Morocco, and Oman) and sought to engage other MENA countries through existing

TIFA mechanisms and preference program review processes. With restrictions due to the COVID-19

pandemic easing, the United States held its first in-person meetings since 2019 under the United States–

Algeria and United States–Egypt TIFAs in June and December 2022, respectively.

The United States also sought further contact with the Member States of the Gulf Cooperation Council

(GCC) (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates). U.S. engagement

with these countries remains aimed at ensuring that the broad range of U.S. interests, including those of

workers, is fully represented as they pursue the modernization and diversification of their economies.

In 2022, the United States continued to engage with Turkey, although progress on economic matters was

limited. Both sides reaffirmed their commitment to furthering the goal of boosting two-way trade. The

lack of openness in Turkey’s digital economy (including its enactment of new laws and policies affecting

electronic commerce and social media), remaining inadequacies (in terms of both laws and enforcement)

in Turkey’s intellectual property protection regime, and the reduction of various market access barriers for

both goods and services all remained key issues of focus for the United States in the bilateral trade and

investment relationship.

Eurasia

The U.S. engagement in Eurasia in 2022 has been largely shaped by Russia’s premeditated and unprovoked

full-scale invasion of Ukraine in February 2022. As a result of Russia’s actions, the United States, working

with its partners and allies, has imposed severe and immediate costs on Russia through sanctions, export

controls, and tariff increases. In addition, the United States has ceased direct engagement with Russia

on trade and investment issues. (For information on Russia’s compliance with its WTO commitments,

see the 2022 Report on the Implementation and Enforcement of Russia's WTO Commitments).

Since the beginning of Russia’s premeditated and unprovoked full-scale invasion of Ukraine, the United

States has provided significant political, security, humanitarian, and economic assistance to Ukraine to

support its territorial sovereignty and economic endurance. In November 2022, the United States

hosted the eleventh meeting of the United States–Ukraine Trade and Investment Council in

Washington, D.C., and focused on ways to help lay the foundation for a sustainable economic

recovery and long-term reconstruction. The participants also announced the launch of negotiations

to upgrade the 2008 Trade and Investment Cooperation Agreement to support Ukraine’s efforts to

establish a more transparent and predictable business environment.

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 27

In 2022, the United States continued to engage with officials from Moldova, Georgia, and Armenia on trade

and investment related issues to strengthen economic relationships.

3. Japan, Republic of Korea, and the Asia-Pacific Economic Cooperation

Forum

Japan

United States–Japan Trade Agreement

On March 17, 2021, Japan’s imports of U.S. beef surpassed the annual safeguard volume established under

the United States–Japan Trade Agreement (USJTA). As a result, Japan applied a higher tariff of 38.5

percent on U.S. beef imports for 30 days, i.e., until April 16, 2021. Triggering the safeguard also activated

a consultation mechanism under a side letter to the USJTA, whereby the United States and Japan are to

consult to adjust the safeguard trigger quantity to higher levels. On March 24, 2022, the United States and

Japan announced an agreement to increase the beef safeguard trigger level under the USJTA, reducing the

probability that the safeguard will be triggered again. The agreement was signed by the U.S. Trade

Representative and the Japanese Ambassador to the United States on June 2, 2022, and entered into force

on January 1, 2023.

Other Developments

In 2022, the United States and Japan held two rounds of meetings of the United States–Japan Partnership

on Trade, an initiative under which the two countries meet on a regular basis to advance a shared agenda

of cooperation across a broad range of issue areas and to address bilateral trade issues of concern to either

side. The areas of collaboration in 2022 included work on best practices with respect to internationally-

recognized labor rights; coordinating efforts to respond to several third-country digital regulations that

present concerns; information exchange on shared concerns about the non-market and trade-distorting

practices of third countries; and advancing proposals with respect to additional new issues. The United

States also raised a number of bilateral trade issues in the Partnership meetings, including regulatory

transparency, standards-related issues that impact the playing field for U.S. products and services, and

Japan’s relatively low use of ethanol, among other topics.

In 2021, the United States, Japan, and the European Union agreed to renew their trilateral partnership to

address the global challenges posed by non-market policies and practices of third countries. Meetings at

both the Minister level and working level continued throughout 2022.

In addition, the United States actively engaged with Japan in 2022 on a range of important bilateral issues

of concern to U.S. stakeholders, such as issues related to Japan’s automotive industry incentives, evolving

regulation of the digital economy, and agricultural policies, to ensure measures are non-discriminatory and

do not impede market access for U.S. goods exporters and service providers.

The United States also worked closely with Japan in various fora during 2022 to address trade issues of

common interest, including those in third-country markets. For example, the United States and Japan have

been working together in the plurilateral Digital Trade Initiative negotiations at the World Trade

Organization (WTO) and within the Asia-Pacific Economic Cooperation (APEC) forum to advance various

topics.

28 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

Korea

In 2022, the United States continued to engage actively with counterparts in the Korean Government

through meetings of the committees and working groups established under the United States–Korea Free

Trade Agreement (KORUS) in order to address trade issues as they arise. The United States also continued

to hold bilateral consultations at the technical level with Korea on an ad hoc basis as needed to address

existing and emerging bilateral trade issues that may not be covered by KORUS provisions, in addition to

regional and global trade issues. These meetings were augmented by senior-level engagement. In 2022,

the United States raised and addressed a number of outstanding issues with Korea, including certain issues

related to automobiles, agriculture, financial services, and information technology services.

For further discussion of the United States–Korea Free Trade Agreement, see Chapter I.A.8 Korea.

Asia-Pacific Economic Cooperation Forum

U.S. participation in the Asia-Pacific Economic Cooperation (APEC) forum, since its founding in 1989,

has substantially contributed to steps that have led to lowering barriers to U.S. exports across the region.

The United States is hosting APEC in 2023 under the theme of “Creating a Resilient and Sustainable Future

for All” and held the first official meeting of this 2023 host year, APEC’s Informal Senior Official Meeting,

in December 2022. The three priority areas for the U.S. host year are: (1) Interconnected: building a

resilient and interconnected region that advances broad-based economic prosperity; (2) Innovative:

enabling an innovative environment for a sustainable future; and (3) Inclusive: affirming an equitable and

inclusive future for all.

Major outcomes for Thailand’s 2022 APEC host year included the Leader-level Bangkok Goals on Bio-

Circular-Green (BCG) Economy, which aims to prioritize addressing climate change and environment

challenges in tandem with robust and resilient economic growth with a whole-of-society participation which

improves the quality of life for all members of society. The Bangkok Goals on BCG will be one of APEC’s

post-pandemic economic growth strategies with a focus on the need to incorporate social and environmental

considerations into business models and economic policies.

Digital Trade: The United States continued to support an ambitious digital trade agenda within APEC in

2022. This included seeking broader participation by APEC economies for the Building Blocks for

Facilitating Digital Trade Pathfinder. These building blocks aim to promote policies among APEC

economies to prevent barriers to digital trade and are supported by a majority of APEC economies. In 2022,

the United States worked with other APEC economies to continue development of this initiative through

policy dialogues and capacity building activities. Work in the digital trade area in 2022 also focused on

finalizing the globalization of the APEC Cross-Border Privacy Rules System as a stand-alone forum to

reach non-APEC members, and expanding support for the 2016 commitment, made by 13 APEC economies

as of December 31, 2022, on a permanent customs duty moratorium on electronic transmissions.

Trade Facilitation: In 2022, the United States continued to support an array of trade facilitation efforts

within APEC, including through initiatives that help support implementation of the WTO Trade Facilitation

Agreement. APEC’s work in these areas helps make it significantly easier for U.S. exporters to access

markets across the Asia-Pacific region. In 2022, APEC economies participated in a number of projects

such as the APEC Alliance for Supply Chain Connectivity (A2C2), which is a U.S.-led public-private

mechanism for stakeholders to formally engage in APEC’s supply chain work including APEC’s new Phase

III of the Supply Chain Framework Action Plan. These projects are designed to improve efficiencies and

reduce costs and delays that hinder U.S. exports.

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 29

Services: The United States continued to strongly support steady progress on implementing APEC’s

Services Competitiveness Roadmap, primarily through the development of an APEC-wide Services Trade

Restrictiveness Index (STRI), which is modeled after the existing Organization for Economic Cooperation

and Development (OECD) STRI. The OECD and APEC have gathered full or partial data on 18 APEC

economies that the United States anticipates will be added to the APEC STRI, with more APEC economies

to be added in the future. With respect to domestic services regulations, the United States continued to

support work in APEC to implement the non-binding principles on domestic regulations in services

endorsed by all APEC economies in 2018. The United States also supported the development of an online

inventory of existing mutual recognition agreements (MRAs) in professional services sectors in the APEC

region. In the area of environmental services, the United States supported work on services that help

address the problem of marine debris.

Food and Agricultural Trade: In 2022, the United States worked with other APEC economies to promote

transparency with respect to sanitary and phytosanitary measures and acceptance of new technologies, and

to address unwarranted non-tariff measures that affect agricultural trade. Within the APEC Food Safety

Cooperation Forum (FSCF), the United States oversaw a project focused on improving economies’

understanding on the foundations of risk communication and its impact on food safety and trade, and how

risk communication applies to maximum residue limits. The United States also served as the overseer for

a multiyear FSCF project on improving overall food safety management by strengthening the capacity of

APEC region laboratories in their understanding of whole genome sequencing data analysis and food safety

testing. Within the Policy Partnership on Food Security, the United States was an active participant in

drafting the Implementation Plan for the Food Security Roadmap Towards 2030 to ensure that U.S.

priorities such as climate and sustainable agriculture were forefront. Under the High-Level Policy Dialogue

on Agricultural Biotechnology, the United States created a platform for four separate APEC economies to

present their experiences in creating risk-proportionate regulatory policies to expand trade in products of

agricultural biotechnology, while also sharing U.S. lessons learned in developing and deploying climate

change-mitigating agricultural biotechnology products.

Intellectual Property: In 2022, the United States continued to use its participation in APEC to build capacity

and raise standards for the protection and enforcement of intellectual property in the Asia-Pacific region.

This included continued U.S. Government-led work on strengthening copyright protection for U.S. creators

in foreign markets by leading discussions on effective practices for enforcement against illegal streaming.

Free Trade Area of the Asia-Pacific (FTAAP): In 2022, Thailand, as APEC host, fostered a “refreshed

conversation” on the APEC FTAAP agenda and established an FTAAP agenda workplan for ensuing years.

The United States views APEC’s FTAAP agenda as a platform to promote high standards by building

capacity in the region for economies to improve their trade and investment frameworks in order to

participate in future trade agreements. The United States continued to advocate for work on topics designed

to foster free and fair trade in the region, including new work on inclusion and stakeholder engagement as

well as work addressing issues presented by state-owned enterprises and advancing high-standard labor

provisions.

4. China, Hong Kong, Taiwan, and Mongolia

China

For information on trade with China, see USTR’s 2022 Report to Congress on China’s WTO Compliance.

30 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

United States–Hong Kong Trade Relations

In 2022, the United States addressed trade matters with respect to Hong Kong, China (Hong Kong) as

appropriate. In particular, the United States has continued to press Hong Kong to update its copyright

system to address concerns regarding digital copyright piracy.

United States–Taiwan Trade Relations

The United States–Taiwan Trade and Investment Framework Agreement (TIFA) Council, which meets

under the auspices of the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural

Representative Office in the United States (TECRO), is the key forum for both economies to resolve and

make progress on a wide range of issues affecting the United States–Taiwan trade and investment

relationship. In 2022, the two sides continued to engage on and address outstanding trade concerns,

including market access barriers facing U.S. beef and pork producers, and concerns raised by the United

States in areas such as medical devices, copyright legislation, digital piracy, labor rights, and regulatory

transparency. The two sides convened meetings of several TIFA working groups, including the inaugural

meeting of the new Labor Working Group, which focuses on worker-centered trade policy and cooperation

on combating forced labor in global supply chains.

As noted earlier in this report, on June 1, 2022, the United States and Taiwan, under the auspices of AIT

and TECRO, launched the U.S.–Taiwan Initiative on 21st-Century Trade. This trade initiative is intended

to develop concrete ways to deepen the economic and trade relationship between the two economies,

advance mutual trade priorities based on shared values, and promote innovation and inclusive economic

growth for workers and businesses. The two sides have developed an ambitious roadmap for reaching

agreements with high-standard commitments and economically meaningful outcomes in 11 trade areas.

For further discussion of agriculture- and environment-related activities, see Chapter III.C.2 Agriculture

and Trade Bilateral and Regional Activities and Chapter III.G.1 Trade and the Environment Free Trade

Agreements and Bilateral Activities, respectively.

United States–Mongolia Trade Relations

The United States and Mongolia held a sixth meeting under the United States–Mongolia Trade and

Investment Framework in Washington, D.C. in April 2019. The two sides discussed a range of bilateral

trade and investment issues, including transparency, the investment climate, intellectual property

protection, trade in cashmere, the U.S. Generalized System of Preferences, trade facilitation, and trade

promotion.

5. Southeast Asia and the Pacific

Free Trade Agreements

Throughout 2022, the United States continued to monitor and enforce its free trade agreements (FTAs) with

Australia and Singapore.

For further discussion of the Australia and Singapore Free Trade Agreements, see Chapter I.B.1 Australia

and I.B.14 Singapore, respectively.

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 31

United States–Southeast Asia and Pacific Trade Relations

In addition to the FTAs with Australia and Singapore, the United States has bilateral trade and investment

framework agreements (TIFAs) with Brunei, Burma (engagement suspended), Cambodia, Fiji, Indonesia,

Laos, Malaysia, New Zealand, the Philippines, Thailand, and Vietnam.

The United States continued to engage throughout 2022 with countries in Southeast Asia and the Pacific to

pursue outcomes that would strengthen trade and economic relations. The United States’ activities in the

region focused on: (1) confronting structural barriers to Association of Southeast Asian Nations (ASEAN)

markets; (2) leveling the playing field for U.S. exporters and workers; (3) countering China’s economic

influence in the region; (4) promoting respect for internationally recognized labor rights; and, (5) deepening

trade-related environmental cooperation. Notable engagements included:

 The Office of the U.S. Trade Representative (USTR) made determinations following two

investigations initiated in 2020 with respect to Vietnam under Section 301 of the Trade Act of

1974: (1) Vietnam’s acts, policies, and practices related to the valuation of its currency; and, (2)

Vietnam’s acts, policies, and practices related to the import and use of timber that is illegally

harvested or traded. On July 23, 2021, USTR determined that no trade action under Section 301

in the currency investigation was warranted because an agreement reached between the

Department of the Treasury and the State Bank of Vietnam and associated measures called for in

the agreement provided a satisfactory resolution of the matter subject to this investigation. During

2022, USTR, in coordination with Treasury, monitored Vietnam’s implementation of its

commitments under the agreement and associated measures and will continue to monitor going

forward. Separately, on October 1, 2021, the United States and Vietnam signed an agreement that

addresses U.S. concerns in the timber investigation. The agreement secures commitments that will

help keep illegally harvested or traded timber out of the supply chain and protect the environment

and natural resources. In April 2022, the United States and Vietnam convened the first meeting of

the Timber Working Group, which was established to facilitate coordination and oversee

implementation of the agreement. The second meeting of the Timber Working Group was held in

November 2022. The United States will continue to closely monitor Vietnam’s implementation

of the agreement. (For further information, see Chapter II.B.6 Section 301 Currency Valuation

and Chapter II.B.5 Section 301 Illegal Timber.)

 The United States met regularly with Cambodia in 2022 through the Labor Working Group under

the United States–Cambodia TIFA and bilaterally with senior government officials to address

ongoing concerns related to protections for worker rights in Cambodia.

 The United States engaged with the Philippines in 2022 on issues concerning labor, intellectual

property, and agriculture. This includes holding an Agricultural Working Group meeting under

the United States–Philippines TIFA in December 2022.

 Throughout 2022, the United States engaged Thailand to strengthen worker rights, advance

intellectual property protection and enforcement, and promote agriculture market access.

United States–ASEAN Trade and Investment Framework Arrangement

The United States continued to work under the auspices of the United States–ASEAN TIFA to further

enhance trade and investment ties between the United States and ASEAN, which collectively represents

the United States’ fourth largest trading partner. In 2022, the United States organized the second U.S.–

ASEAN Trade and Labor Dialogue to discuss the importance of tripartite and bipartite dialogues to

32 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

promoting inclusive growth and business competitiveness; and policies that support workforce

development and social protections in the digital economy. The United States also hosted an ASEAN–U.S.

Best Practices Exchange on Women-owned Micro, Small, and Medium-sized Enterprises and E-Commerce

to discuss how public-private partnerships can help women-owned businesses benefit from the evolving

digital economy. At the annual ASEAN Economic Ministers–USTR Consultations in September 2022, the

United States and ASEAN agreed to enhance cooperation on trade facilitation as well as the environment.

In 2022, the United States also continued cooperation with ASEAN on digital trade, intellectual property,

standards, competition, and agricultural biotechnology.

United States–Fiji Trade and Investment Framework Agreement

Following the first meeting held under the United States–Fiji TIFA in 2021, the United States continued to

engage with Fiji bilaterally and through the Indo-Pacific Economic Framework for Prosperity in 2022.

6. Sub-Saharan Africa

Throughout 2022, the Office of the United States Trade Representative (USTR) worked to strengthen U.S.

trade and investment ties with sub-Saharan Africa. USTR also continued efforts to implement the

Administration’s worker-centered trade policy and catalyze sustainable growth across the continent. This

work included: announcing the launch of the U.S.–Kenya Strategic Trade and Investment Partnership; the

hosting of an in-person African Growth and Opportunity Act (AGOA) Trade Ministerial Meeting during

the U.S.–African Leaders Summit; and, the signing of a Memorandum of Understanding (MOU) with the

African Continental Free Trade Area (AfCFTA) Secretariat.

On September 13, 2022, the U.S. Trade Representative led a delegation to Nairobi, Kenya to attend the

Kenyan Presidential Inauguration. During a meeting with the Kenyan President, the U.S. Trade

Representative noted the Administration’s support for shared global and regional priorities, including

enhancing two-way trade and investment and promoting sustainable and inclusive economic growth.

USTR provided substantial support for other initiatives with sub-Saharan Africa, including: the December

2022 U.S.–Africa Leaders Summit, hosted by the President in Washington, D.C.; implementation of the

new U.S. Strategy Toward Sub-Saharan Africa released by the White House in August 2022; and the

Prosper Africa initiative, the goal of which is to substantially increase two-way trade and investment

between the United States and Africa.

For further on the Administration’s support for gender equity and equality and the empowerment of women

in Africa and in the African Diaspora, see Chapter III.A.2 Advancing Racial Equity and Support for

Underserved Communities

The African Growth and Opportunity Act

The TPSC Subcommittee on AGOA examines annually whether each country eligible for AGOA continues

to meet the eligibility criteria. As a result of the annual 2023 AGOA eligibility review and following the

termination of AGOA benefits for Burkina Faso, which took effect on January 1, 2023, 35 sub-Saharan

African countries are eligible for AGOA benefits in 2023. On June 30, 2022, USTR released the 2022

Biennial Report on the Implementation of the African Growth and Opportunity Act to Congress.

On December 13, 2022, the U.S. Trade Representative hosted trade ministers from sub-Saharan Africa for

the AGOA Ministerial Meeting during the U.S.–Africa Leaders Summit. The AGOA Ministerial Meeting

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 33

consisted of discussions among the trade ministers and provided an opportunity for them to engage with

key members of the U.S. Congress to discuss the program.

For further discussion of the African Growth and Opportunity Act, see Chapter I.D.2 African Growth and

Opportunity Act and II.E.1 Preference Programs Monitoring and Enforcement.

African Continental Free Trade Area

Throughout 2022, USTR had numerous high-level engagements in support of the African Continental Free

Trade Area (AfCFTA). The U.S. Trade Representative and the AfCFTA Secretary General signed a MOU

on December 14, 2022 at the U.S.–Africa Business Forum in Washington, D.C. The two officials also took

part in a hybrid fireside chat on December 2, 2022 that highlighted U.S. Government support for trade

efforts across Africa. The U.S. Government launched a range of activities to support the AfCFTA and

plans to further support the negotiations and the implementation of the AfCFTA agreement.

For further information on the African Continental Free Trade Area, see Chapter I.A.6 African Continental

Free Trade Area Memorandum of Understanding, Chapter III.A.3 Advancing Gender Equity and Equality

and Women’s Economic Empowerment in Trade Policy, and Chapter III.I Trade Capacity Building.

Empowerment of African and Diaspora Women

In 2022, USTR worked to reinforce the Administration’s support of gender equity and equality and the

empowerment of African and Diaspora women, core objectives of the U.S. National Strategy on Gender

Equity and Equality, the U.S. Strategy Toward Sub-Saharan Africa, and the African Union’s Agenda 2063

plan. (For further information, see Chapter III.A.3 Advancing Gender Equity and Equality and Women’s

Economic Empowerment in Trade Policy.)

On December 13, 2022, the eve of the U.S.–Africa Leaders’ Summit, USTR collaborated with a Historically

Black College and University (HBCU) and the U.S. Department of Commerce to hold a Fireside Chat on

“Women and Trade: Advancing African and Diaspora Women in the Global Marketplace.” The key

purpose of this event was to raise awareness about the important work policymakers, the private sector, and

international organizations are undertaking to advance gender equity and equality and to promote inclusive

economic growth, especially in the context of strengthening U.S.–Africa partnerships. Key speakers at the

event included the U.S. Trade Representative, the U.S. Secretary of Commerce, the Executive Director of

the International Trade Centre, and the heads of several Diaspora women-owned companies.

Generalized System of Preferences Reviews

USTR continued to monitor developments related to its ongoing reviews of three Generalized System of

Preferences (GSP) beneficiaries’ compliance with GSP eligibility criteria in sub-Saharan Africa: Eritrea,

South Africa, and Zimbabwe.

For further discussion of the Generalized System of Preferences program, see Chapters I.D.I Generalized

System of Preferences and II.E.1 Preference Programs Monitoring and Enforcement.

34 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

7. South and Central Asia

U.S. engagement with countries across South and Central Asia in 2022 focused on advancing resolution of

a range of issues related to respect for internationally recognized worker rights, agricultural trade, protection

of intellectual property (IP), and digital trade.

The United States has bilateral Trade and Investment Framework Agreements (TIFAs) with Afghanistan,

Bangladesh, Iraq, Maldives, Nepal, Pakistan, Sri Lanka, and, collectively, the Central Asian republics of

Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. A Trade Policy Forum exists to

facilitate trade and investment dialogue between the United States and India.

U.S. trade policy engagement in South and Central Asia sought to foster regional trade and security through

dialogue on and adherence to trade rules. The region encompasses approximately 1.9 billion people, and

many countries have been experiencing rapid economic growth and progression up the development ladder,

presenting important opportunities for U.S. exporters of goods, services, and agricultural products. Digital

trade is a potential engine for growth in the U.S. bilateral economic relationships with South Asian partners,

though restrictive digital trade policies may hamper trade. Similarly, the United States has increased its

engagement on technical barriers that have affected certain U.S. export sectors and fostered discussions on

the need for high-standard commitments to address emerging trade challenges.

Trade and Investment Framework Agreement Activity in South and Central Asia

The activities below describe the key outcomes that advanced the U.S. trade and investment agenda with

countries in the South and Central Asia region during 2022.

India: Throughout 2022, the United States engaged with India on an ongoing basis in response to specific

concerns affecting the full range of the bilateral trade relationship. Following the November 2021 re-launch

of the U.S.–India Trade Policy Forum (TPF), the principal bilateral forum for discussing trade and

investment issues affecting the two countries, 2022 was characterized by regular engagement through the

TPF’s four technical-level workings groups on (1) agricultural goods, (2) non-agricultural goods, (3)

services and investment, and (4) IP. These TPF working groups, which include participation by senior-

level officials from key U.S. agencies, provide an opportunity to achieve meaningful results and to address

the general trend of increasingly trade-restrictive policies in India that continue to inhibit the potential of

the trade relationship. A TPF Ministerial meeting was held on January 11, 2023. In addition to utilizing

the TPF as a mechanism for resolving specific trade concerns, USTR continues to stress its interest in

engaging with the Government of India on issues in the areas of labor, environment, digital trade, trade

facilitation, and good regulatory practices, among others.

Bangladesh: In 2022, the United States continued to stress the importance of the Administration’s worker-

centered trade policies in the areas of workplace safety and worker rights in Bangladesh, which have been

a focus of concern after Bangladesh’s Generalized System of Preferences eligibility was terminated in 2013.

During the United States–Bangladesh Trade and Investment Cooperation and Facilitation Agreement

(TICFA) Council meeting in December 2022, the United States highlighted, in particular, concerns in the

areas of freedom of association, collective bargaining, child labor, and forced labor. The United States

called for greater alignment between Bangladesh’s domestic laws and practice and international labor

standards, in particular by extending the rights of freedom of association and collective bargaining to the

export processing zones and special economic zones. USTR will continue to deepen engagement with the

Government of Bangladesh on labor priorities through the TICFA and through the bilateral Labor Working

Group established in 2022, and will work closely with the new Labor Attaché posted at the U.S. Embassy

in Dhaka.

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 35

Also, during virtual meetings in autumn 2022 in the lead up to and during the December TICFA Council

meeting, the United States engaged Bangladesh on a full range of pressing bilateral trade issues, including

market access for agricultural products, policy developments affecting digital trade, ease of doing business,

and IP protection and enforcement. As a result of the TICFA meeting, the governments agreed to intensify

work in 2023 related to agriculture biotechnology and to address certain investment barriers for U.S. firms

operating in Bangladesh. USTR is planning for the next TICFA meeting to be held in late 2023.

Pakistan: U.S. bilateral engagement with Pakistan in 2022 focused on regulatory developments affecting

digital trade, digital content, and data privacy, IP protection and enforcement, labor, market access for

agricultural and non-agricultural goods and services, and technical barriers to trade (TBT). During an

intersessional TIFA meeting in Islamabad in March 2022, USTR and Pakistan’s Ministry of Commerce

agreed to pursue outcomes in agricultural trade, international labor rights, women’s economic

empowerment, and good regulatory practices, in order to lay the groundwork for a TIFA Council Ministerial

meeting in the United States in 2023. In August 2022 the United States and Pakistan also held an initial

information exchange on good regulatory practices.

Nepal: The United States engaged with Nepal periodically throughout 2022 on a range of bilateral trade

issues and a TIFA Council meeting is expected to be held in early 2023. The United States also regularly

engages with Nepal through the TIFA to ensure that Nepal is meeting the statutory criteria necessary to

receive the benefits of the Nepal Trade Preference Program, which was established in 2015 and is set to

expire in 2025.

For a discussion of the Nepal Trade Preference Program, see Chapter I.D.4 Nepal Trade Preference

Program.

Central Asia (Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan): During 2022, the

U.S. Trade Representative engaged the Central Asian Ministries of Trade on the priorities of the

Administration, including a worker-centered trade policy, good regulatory practices, and inclusive

stakeholder engagement. Five working groups operate under the auspices of the U.S.–Central Asia TIFA,

covering customs, sanitary and phytosanitary (SPS) issues and standards, IP protection and enforcement,

women’s economic empowerment (WEE), and digital trade. The customs, IP, WEE, and SPS working

groups met in 2022, and the inaugural meeting of the digital trade group was held in September 2022. In

March 2022, the U.S. Trade Representative met with Uzbekistan’s Minister of Trade to discuss bilateral

trade, international labor rights, and the country’s ongoing accession to the WTO. USTR continued to plan

towards the next TIFA meeting to be held in Central Asia in early 2023.

Iraq: In 2022, the United States continued to engage on issues raised during the last United States–Iraq

TIFA Council in June 2019––issues related to business climate concerns, market access for agricultural

goods (including poultry, rice, and wheat) and non-agricultural goods and services, TBT, arbitration of

investment disputes, and tariff rates––as well as on new concerns around import bans, conformity

assessment barriers, international standards, and digital trade policy. Following an uptick in stakeholder

concerns, USTR increased outreach to the Government of Iraq on its IP regime and enforcement.

D. Preference Programs

1. Generalized System of Preferences

The U.S. Generalized System of Preferences (GSP) program (19 U.S.C. § 2461 et seq.) was created by the

Trade Act of 1974 and promotes sustainable development by providing eligible developing countries with

36 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

duty-free access to the U.S. market for approximately 3,500 non-import sensitive products and an additional

approximately 1,500 products for least developed beneficiary developing countries (LDBDCs). GSP was

authorized initially for a 10-year period, beginning on January 1, 1976. Congress reauthorized the program

14 times subsequently, most recently in March 2018. That authorization lapsed on December 31, 2020.

As a result of the lapse of GSP’s authorization, USTR did not carry out an annual product review to consider

the addition or removal of products or waivers to competitive need limitations. However, USTR conducted

outreach with GSP beneficiaries, including Argentina, Brazil, Egypt, Lebanon, and the Philippines, to help

improve utilization of GSP benefits, in preparation for the GSP program’s pending reauthorization by the

U.S. Congress, and compliance with GSP eligibility requirements.

Value of Trade Entering the United States under the U.S. Generalized System of Preferences

Program

Although the GSP program authorization lapsed on December 31, 2020, this section provides the value of

goods entering the United States that importers claimed under GSP in 2022 in anticipation that any GSP

program reauthorization would provide reimbursement of duties paid during the lapse, consistent with past

precedent.

U.S. imports claimed under the U.S. GSP program were $21.5 billion in 2022, up 15 percent from 2021

($2.8 billion) and up 26.7 percent from 2020 ($4.5 billion).

During 2022, imports under GSP accounted for less than 1 percent of all U.S. imports of goods. Imports

from GSP beneficiaries coming in under GSP accounted for 8.5 percent of total imports from those

countries during the same period. GSP imports from Least Developed Beneficiary Developing Countries

(LDBDCs), rose from $3.0 billion to $3.8 billion, or by 26 percent, and accounted for 17.8 percent of GSP

imports.

Top U.S. imports claimed under the GSP program during 2022 were travel and sports bags, handbags,

rubber or plastic mattresses, and trunks and suitcases.

The five GSP beneficiaries with the largest value of GSP products claimed in 2022 were, in order:

Indonesia, Cambodia, Thailand, Brail, and the Philippines. The five LDBDC GSP beneficiaries with the

largest volume of GSP products claimed were: Cambodia, Burma, Ethiopia, Angola, and Nepal

For further discussion of the Generalized System of Preferences program, see Chapters II.E.1 Preference

Programs Monitoring and Enforcement and III.H.2. Trade and Labor Preference Programs.

2. African Growth and Opportunity Act

The African Growth and Opportunity Act (AGOA) (Title 1 of The Trade and Development Act of 2000,

Public Law 106–200, 19 U.S.C. § 3701 et seq.) provides eligible sub-Saharan African countries with duty-

free access to the U.S. market for over 1,800 products, in addition to the more than 5,100 products that are

eligible under the Generalized System of Preferences (GSP) program. Although legal authorization for

benefits under GSP expired on December 31, 2020, tariff lines covered by GSP remained eligible for AGOA

beneficiaries.

As of January 1, 2023, 35 sub-Saharan African countries are eligible for AGOA benefits.

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 37

For information on the AGOA Eligibility Review, see Chapter II.E.1 Preference Programs Monitoring and

Enforcement

AGOA Trade Ministerial Meeting

On December 13, 2022, the U.S. Trade Representative hosted trade ministers from sub-Saharan Africa for

the AGOA Ministerial Meeting during the U.S.-Africa Leaders’ Summit. The AGOA Ministerial Meeting

was held in lieu of the annual United States-Sub-Saharan Africa Trade and Economic Cooperation Forum

(AGOA Forum).

The goal of the AGOA Ministerial Meeting was to reaffirm and modernize the United States’ partnership

and engagement with Africa as the United States expands trade and investment with the continent. The

meeting provided an opportunity for leading trade officials in sub-Saharan Africa and the United States to

exchange perspectives on: core issues impacting the U.S.-Africa trade relationship; how to work together

to improve AGOA implementation, including by improving utilization rates; and, how to ensure that the

program benefits all segments of society. The meeting also provided a platform to discuss how to strengthen

economic cooperation, expand two-way trade and investment, and support regional economic integration,

among other issues of mutual interest.

The AGOA Ministerial Meeting was attended by thirty-four trade ministers from 2022 AGOA-eligible

countries, nine U.S. Members of Congress, and representatives of the six Regional Economic Communities

and three other Africa-based organizations. U.S. Government senior officials from the Department of State,

the Department of Commerce, the Department of Treasury, the U.S. Agency for International Development

and the National Security Council also attended.

2022 Biennial Report on Implementation of AGOA

In compliance with Section 110 of the Trade Preferences Extension Act of 2015 (19 U.S.C. § 3705 et. seq.),

the U.S. Trade Representative submitted to Congress the 2022 Biennial Report on the Implementation of

AGOA on June 30, 2022. As required by Section 110, the report provides a description of the status of

trade and investment between the United States and sub-Saharan Africa, changes in country eligibility for

AGOA benefits, an analysis of country compliance with the AGOA eligibility criteria, an overview of

regional integration efforts in sub-Saharan Africa, and a summary of U.S. trade capacity building efforts.

Value of Trade Entering the United States under the African Growth and Opportunity Act

U.S. imports claimed under the AGOA program (including under the U.S. GSP program) in 2022 were

$10.2 billion, up 50.8 percent from 2021 and up 146.0 percent from 2020. The increase to $10.2 billion in

2022 was due mostly to an increase in imports of oil (up 135.0 percent) to $4.5 billion in 2022. AGOA

non-oil trade increased by 17.8 percent to $5.7 billion in 2022.

There was a 80.9 percent increase in transportation equipment imports under AGOA to $1.6 billion in 2022

from $879 million in 2021 and a 1.3 percent decrease in AGOA apparel trade to $1.36 billion in 2022

compared to $1.38 billion in 2021.

Top U.S. imports under the AGOA program during 2022 were: mineral fuels, motor vehicles, gold

necklaces, and ferrochromium.

The top five AGOA users by value in 2022 were, in order: South Africa, Ghana, Kenya, and Madagascar.

38 | I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES

3. Haitian Hemispheric Opportunity Through Partnership Encouragement

Act

The Haitian Hemispheric Opportunity through the Partnership Encouragement Act of 2006 (Public Law

109–432, Div. D, Title V) was extended in 2008 (Public Law 110–234, Title XV, Subtitle D, Part I) (HOPE

II) to provide eligible producers with duty-free treatment for imports of apparel, textiles, and certain other

goods from Haiti until September 30, 2025. For the first 11 months of 2022 (latest data available), total

imports under the program were $970 million and accounted for 98.6 percent of total U.S. imports from

Haiti.

Pursuant to HOPE II requirements, producers must comply with internationally recognized worker rights

to be eligible for duty-free treatment under HOPE II. The U.S. Government, in cooperation with the

International Labor Organization, monitors compliance of producers with worker rights and issues an

annual report on the status of the Technical Assistance Improvement and Compliance Needs Assessment

and Remediation (TAICNAR) program. (For information on monitoring efforts, see the 2022 USTR

Annual Report on the Implementation of the Technical Assistance Improvement and Compliance Needs

Assessment and Remediation Program).

For further discussion of HOPE II, see Chapter II.E.1 Preference Programs Monitoring and Enforcement.

4. Nepal Trade Preference Program

The Nepal Trade Preference Program (NTPP) (19 U.S.C. § 4454) was authorized by the Trade Facilitation

and Trade Enforcement Act of 2015 and provides duty-free treatment for 77 tariff lines from Nepal, which

includes certain carpets, headgear, shawls, and scarves through December 31, 2025, when the program

expires. The NTPP is designed to assist Nepal in its economic recovery from earthquakes in 2015. During

2022, the sixth full year the NTPP has been in place, total imports under the program were nearly $5 million

and accounted for 3.5 percent of total U.S. imports from Nepal.

The NTPP includes statutory criteria necessary to receive the benefits of the preference program, which

include, among other criteria, making continual progress in establishing a market-based economy, rule of

law, and protection of internationally recognized workers’ rights. The Trade Enforcement Act requires the

President to present an annual report to Congress on the implementation of the NTPP, which covers

overviews of the political, economic, and trade conditions in Nepal; an assessment of Nepal’s eligibility to

receive the benefits; information on U.S. trade policy as it relates to Nepal; information related to Nepal’s

utilization of the preference program; and, information on implementation of technical assistance. (See the

2022 USTR Annual Report to Congress on the Implementation of the Nepal Trade Preference Program).

For further discussion of the Nepal Trade Preferences program, see Chapters II.E.1 Preference Programs

Monitoring and Enforcement.

5. Caribbean Basin Initiative

Seventeen Caribbean countries and territories are beneficiaries of the Caribbean Basin Initiative (CBI) (19

U.S.C. 2701 et seq.) which was launched in 1983 through the Caribbean Basin Economic Recovery Act

(CBERA) (Public Law 98–67). The CBERA facilitates the development of Caribbean Basin economies by

providing beneficiary countries with duty-free access to the U.S. market for many goods. In 2000, the

United States enacted the Caribbean Basin Trade Partnership Act (CBTPA) (Title II of the Trade and

Development Act of 2000, Public Law 106–200) to enhance existing CBERA preferences. The CBTPA

recognized the significance of apparel as a component of CBI exports to the United States and expanded

I. AGREEMENTS, NEGOTIATIONS, AND OTHER INITIATIVES | 39

the degree of preferential treatment applied to U.S. imports of apparel made in the Caribbean Basin region.

Eight of the CBERA beneficiary countries and territories are also beneficiaries under the CBTPA. The

CBTPA has been renewed by Congress several times since it was enacted, most recently on October 10,

2020 when the program was extended until September 30, 2030.

CBI benefits for Haiti were further expanded with the Haitian Hemispheric Opportunity through Partnership

Encouragement Act of 2006 (HOPE Act) (Public Law 109–432), the HOPE II Act of 2008 (HOPE II Act)

(Public Law 110–234, Title XV, Subtitle D, Part I), and the Haitian Economic Lift Program Act of 2010

(HELP Act) (Public Law 111–171, which provided Haiti preferential treatment for its textile and apparel

products. The Trade Preferences Extension Act of 2015 (TPEA) (Public Law 114–27) extended trade

benefits provided to Haiti in the HOPE Act, the HOPE II Act, and the HELP Act until September 30, 2025.

The TPEA also extended the value-added rule for apparel articles wholly assembled or knit-to-shape in

Haiti until December 19, 2025.

During 2022, total imports claimed under the CBI were $754 million and accounted for 6.5 percent of total

U.S. imports from Caribbean Basin countries.

For further discussion of the Caribbean Basin Initiative, see Chapter II.E.1 Preference Programs

Monitoring and Enforcement.

II. TRADE ENFORCEMENT ACTIVITIES | 41

II. TRADE ENFORCEMENT ACTIVITIES

A. Overview

The Office of the United States Trade Representative (USTR) coordinates the U.S. Government monitoring

and enforcement of rules and norms that underlie the international trading system and promote fair, market-

oriented conditions for U.S. workers and businesses. USTR enforces foreign government compliance with

trade agreements to which the United States is a party, including through the use of dispute settlement

procedures and applying the full range of U.S. trade laws. Vigorous monitoring and investigation efforts

by USTR and relevant expert agencies, including the U.S. Departments of Agriculture, Commerce,

Homeland Security, Justice, Labor, State, and Treasury, help ensure that these agreements yield the

maximum benefits in terms of ensuring market access for Americans, advancing understanding and respect

for international commitments, and creating a fair, open, and predictable trading environment.

Ensuring full implementation of U.S. trade agreements is one of the strategic priorities of the United States.

USTR seeks to achieve this goal through a variety of means, including:

 Asserting U.S. rights through World Trade Organization (WTO) bodies and committees charged

with monitoring implementation and surveillance of agreements and disciplines, and use of dispute

settlement as appropriate;

 Promoting U.S. interests under free trade agreements (FTAs) through work programs, accelerated

tariff reductions, and strategic use of dispute settlement mechanisms, including with respect to

labor and environmental obligations, such as through the United States–Mexico–Canada

Agreement (USMCA) Facility-Specific, Rapid Response Mechanism (for further discussion of

the Rapid Response Mechanism, see Chapter III.H.1 Trade and Labor Free Trade Agreements

and Bilateral Activities);

 Vigorously monitoring and enforcing other bilateral and plurilateral agreements;

 Invoking U.S. trade laws to promote compliance, including in conjunction with bilateral,

plurilateral, and WTO mechanisms when appropriate; and,

 Providing technical assistance to trading partners, especially to developing countries, to ensure that

key obligations are implemented on schedule.

Through the vigorous application of U.S. trade laws and strategic use of dispute settlement procedures, the

United States opens foreign markets to U.S. goods and services; helps defend U.S workers, businesses, and

farmers against unfair practices; and, promotes a level playing field through promoting respect for fair,

market-oriented conditions. For example, USTR’s Office of Monitoring and Enforcement leads U.S. efforts

to defend U.S. interests in WTO and FTA disputes, and through investigations and actions under Section

301. The United States also has used the incentive of preferential access to the U.S. market to encourage

improvements in the protection of workers’ rights and reform of intellectual property (IP) laws and practices

in other countries. These enforcement efforts have resulted in major benefits for U.S. firms, farmers, and

workers, as well as workers around the world.

42 | II. TRADE ENFORCEMENT ACTIVITIES

Favorable Resolutions or Settlements

Dispute settlement is one mechanism that the United States may use to secure benefits for U.S. stakeholders.

Whenever possible, the United States has sought to reach favorable resolutions or settlements that eliminate

the foreign breach without having to resort to engaging in prolonged litigation.

As of December 2022, the United States has been able to achieve this preferred result in 38 disputes

concluded so far, involving: Argentina’s protection and enforcement of patents; Australia’s ban on salmon

imports; Belgium’s duties on rice imports; Brazil’s automotive investment measures; Brazil’s patent law;

Canada’s additional duties on certain products; Canada’s antidumping and countervailing duty

investigation on corn; China’s value-added tax exemptions for certain domestically produced aircraft;

China’s Demonstration Base/Common Service Platform export subsidy program; China’s Automobile and

Automobile Parts Export Bases prohibited subsidy program; China’s value-added tax on integrated circuits;

China’s use of prohibited subsidies for green technologies; China’s treatment of foreign financial

information suppliers; China’s subsidies for so-called Famous Brands; China’s support for wind power

equipment; Denmark’s civil procedures for IP enforcement; Egypt’s apparel tariffs; the European Union’s

(EU) market access for grains; an EU import surcharge on corn gluten feed; the EU’s subsidies to Airbus

for large civil aircraft; the EU’s claim of compliance in the dispute involving subsidies to Airbus for large

civil aircraft; the EU’s additional duties imposed on a variety of U.S. exports; Greece’s protection of

copyrighted motion pictures and television programs; Hungary’s agricultural export subsidies; India’s

compliance regarding its patent protection; Indonesia’s barriers to the importation of horticultural products

(two disputes); Ireland’s protection of copyrights; Japan’s protection of sound recordings; Korea’s shelf

life standards for beef and pork; Mexico’s additional duties on certain products; Mexico’s restrictions on

hog imports; Pakistan’s protection of patents; the Philippines’ market access for pork and poultry; the

Philippines’ automotive regime; Portugal’s protection of patents; Romania’s customs valuation regime;

Sweden’s enforcement of IP rights; and, Turkey’s box office taxes on motion pictures.

Litigation Successes

When U.S. trading partners have not been willing to negotiate settlements, USTR has pursued its offensive

cases to conclusion, prevailing in 47 cases as of December 2022. The United States prevailed in complaints

against foreign trade barriers involving: Argentina’s import licensing restrictions and other trade-related

requirements; Argentina’s tax and duties on textiles, apparel, and footwear; Australia’s export subsidies on

automotive leather; Canada’s administration of USMCA dairy tariff-rate quotas; Canada’s barriers to the

sale and distribution of magazines; Canada’s export subsidies and an import barrier on dairy products;

Canada’s law protecting patents; China’s provision of agricultural domestic support for grains producers in

excess of its commitment levels; China’s administration of its tariff-rate quotas for grains; China’s charges

on imported automobile parts; China’s measures restricting trading rights and distribution services for

certain publications and audiovisual entertainment products; China’s enforcement and protection of IP

rights; China’s measures related to the exportation of raw materials; China’s countervailing and

antidumping duties on grain oriented flat-rolled electrical steel from the United States; China’s claim of

compliance in the dispute involving China’s countervailing and antidumping duties on grain oriented flat-

rolled electrical steel from the United States; China’s measures affecting electronic payment services;

China’s countervailing and antidumping duties on broiler parts from the United States; China’s

countervailing and antidumping duties on automobiles from the United States; China’s export restrictions

on rare earths and other materials; the EU’s subsidies to Airbus for large civil aircraft; the EU’s claim of

compliance in the dispute involving subsidies to Airbus for large civil aircraft; the EU’s import barriers on

bananas; the EU’s ban on imports of beef; the EU’s regime for protecting geographical indications; the

EU’s moratorium on biotechnology products; the EU’s non-uniform classification of LCD monitors; the

EU’s tariff treatment of certain information technology products; India’s export subsidies on a variety of

products; India’s ban on poultry meat and various other U.S. agricultural products allegedly to protect

II. TRADE ENFORCEMENT ACTIVITIES | 43

against avian influenza; India’s import bans and other restrictions on 2,700 items; India’s protection of

patents on pharmaceuticals and agricultural chemicals; India’s discriminatory local content requirements

for solar cells and modules under its National Solar Mission (two merged complaints); India’s and

Indonesia’s discriminatory measures on imports of U.S. automobiles; Indonesia’s barriers on the

importation of horticultural products, beef, poultry, and animals (three complaints); Japan’s restrictions

affecting imports of apples, cherries, and other fruits; Japan’s barriers to apple imports; Japan’s and Korea’s

discriminatory taxes on distilled spirits; Korea’s restrictions on beef imports; Mexico’s antidumping duties

on high fructose corn syrup; Mexico’s telecommunications barriers; Mexico’s antidumping duties on rice;

Mexico’s discriminatory soft drink tax; the Philippines’ discriminatory taxation of imported distilled spirits;

and, Turkey’s measures affecting the importation of rice.

USTR also works in consultation with other U.S. Government agencies to ensure the most effective use of

U.S. trade laws to complement its litigation strategy and to address problems that are outside the scope of

the WTO and U.S. free trade agreements.

USTR has applied Section 301 of the Trade Act of 1974 to address unfair foreign government measures,

“Special 301” for IP rights protection and enforcement, and Section 1377 of the Omnibus Trade and

Competitiveness Act of 1988 for telecommunications trade problems.

For further discussion of the application of these trade law tools, see Chapters II.B Section 301, II.E.2

Special 301, and II.E.3 Section 1377 Review of Telecommunications Agreements, respectively.

Interagency Center for Trade Implementation, Monitoring and Enforcement

On February 24, 2016, the Trade Facilitation and Trade Enforcement Act of 2015 was signed into law.

Section 604 of the law established the Interagency Center for Trade Implementation, Monitoring and

Enforcement (ICTIME) in USTR to support the activities of USTR in: investigating potential disputes

under the WTO and bilateral and regional trade agreements; monitoring and enforcing trade agreements to

which the United States is a party; and, monitoring implementation by foreign parties of trade agreements.

The statute provided funding to USTR to staff ICTIME directly. ICTIME brings together research,

analytical resources, and expertise from within USTR and across the federal government into one office

within USTR to significantly enhance USTR’s capability to investigate foreign trade practices that are

potentially unfair or adverse to U.S. commercial interests.

In 2022, ICTIME continued to provide analysis in USTR’s monitoring of the United States–China

Economic and Trade Agreement; multiple rounds of technical exchanges with EU counterparts to advance

the Global Arrangement on Steel and Aluminum Excess Capacity and Carbon Intensity; technical

exchanges on the issue of non-market policies and practices in China’s medical device industry and its use

of government guidance funds in the context of the U.S.–EU Trade and Technology Council; technical

exchanges in the context of the U.S.–EU Cooperative Framework for Large Civil Aircraft; and, monitoring

of the Agreement Between the United States and Vietnam to Resolve the Timber Section 301 Investigation.

ICTIME also continued to provide analysis in ongoing dispute settlement at the WTO and in every use of

the USMCA Facility-Specific Rapid Response Labor Mechanism.

B. Section 301

Section 301 of the Trade Act of 1974 (Trade Act) is designed to address unfair foreign practices affecting

U.S. commerce. Section 301 may be used to enforce U.S. rights under bilateral and multilateral trade

agreements or to respond to unreasonable, unjustifiable, or discriminatory foreign government practices

that burden or restrict U.S. commerce. For example, Section 301 may be used to obtain improved market

44 | II. TRADE ENFORCEMENT ACTIVITIES

opportunities for U.S. goods and services, enforce labor or environmental norms or trade commitments,

address tolerance for anticompetitive activities, and obtain more effective protection worldwide for U.S.

intellectual property.

Operation of the Statute

The Section 301 provisions of the Trade Act provide a domestic procedure through which interested persons

may petition the U.S. Trade Representative to investigate a foreign government act, policy, or practice and

take appropriate action. The U.S. Trade Representative also may self-initiate an investigation.

In each investigation, the U.S. Trade Representative must seek consultations with the foreign government

whose acts, policies, or practices are under investigation. If the acts, policies, or practices are determined

to violate a trade agreement or to be unjustifiable, the U.S. Trade Representative generally must take action.

If they are determined to be unreasonable or discriminatory and to burden or restrict U.S. commerce, the

U.S. Trade Representative must determine whether action is appropriate and, if so, what action to take.

Actions that the U.S. Trade Representative may take under Section 301 include to: (1) suspend trade

agreement concessions; (2) impose duties or other import restrictions; (3) impose fees or restrictions on

services; (4) enter into agreements with the subject country to eliminate the offending practice or to provide

compensatory benefits for the United States; and/or (5) restrict service sector authorizations. The Office of

the United States Trade Representative (USTR) is required to monitor a foreign country’s implementation

of any agreements entered into, or measures undertaken, to resolve a matter that was the subject of the

investigation. If the foreign country fails to comply with an agreement or the U.S. Trade Representative

considers that the country fails to implement a World Trade Organization (WTO) recommendation, the

U.S. Trade Representative must determine what further action to take under Section 301.

1. China’s Acts, Policies, and Practices Related to Technology Transfer,

Intellectual Property, and Innovation

Pursuant to the President’s direction, in August 2017, the U.S. Trade Representative initiated an

investigation under Section 302(b) of the Trade Act (19 U.S.C. § 2412(b)) to determine whether acts,

policies, and practices of the Government of the People’s Republic of China related to technology transfer,

intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S.

commerce (82 FR 39007). The findings of the investigation, along with advice from the Section 301

Committee, Trade Policy Staff Committee, and advisory committees, supported a determination that

China’s acts, policies, and practices are actionable under Section 301(b) of the Trade Act (19 U.S.C. §

2411(b)). USTR published an extensive 200-page report with the findings of the investigation on March

22, 2018.

Based on this report, the U.S. Trade Representative in April 2018 published a notice of a determination that

the following acts, policies, and practices of China are unreasonable or discriminatory and burden or restrict

U.S. commerce, and are thus actionable under Section 301(b) of the Trade Act:

 China uses foreign ownership restrictions, such as joint venture requirements and foreign

equity limitations, and various administrative review and licensing processes, to require or

pressure technology transfer from U.S. companies.

 China’s regime of technology regulations forces U.S. companies seeking to license

technologies to Chinese entities to do so on non-market-based terms that favor Chinese

recipients.

II. TRADE ENFORCEMENT ACTIVITIES | 45

 China directs and unfairly facilitates the systematic investment in, and acquisition of, U.S.

companies and assets by Chinese companies to obtain cutting-edge technologies and

intellectual property and generate the transfer of technology to Chinese companies.

 China conducts and supports unauthorized intrusions into, and theft from, the computer

networks of U.S. companies to access their sensitive commercial information and trade secrets

(83 FR 14906).

With respect to the second category of acts, policies, and practices (involving technology licensing

regulations), the U.S. Trade Representative decided that relevant U.S. concerns could be appropriately

addressed through recourse to WTO dispute settlement. Accordingly, on March 23, 2018, USTR initiated

a WTO dispute by requesting consultations with the Government of China regarding certain specific aspects

of China's technology regulations (China—Certain Measures Concerning the Protection of Intellectual

Property Rights (DS542). (For further information, see Chapter II.D WTO and FTA Enforcement.)

To obtain the elimination of the acts, policies, and practices in the three other categories listed above, the

U.S. Trade Representative, at the direction of the President, determined to impose additional duties on

certain products of China. The additional duties were imposed in four tranches, referred to as List 1 through

List 4. For each list, USTR invited public comment and held public hearings.

Lists 1 and 2

Duties were imposed under Section 301 on products in the first two tranches during the one-year initial

period of investigation. In July 2018, an additional 25 percent duty was imposed on products in the first

tranche, known as List 1, which covered 818 tariff subheadings with an approximate annual trade value of

$34 billion (83 FR 28710). Subsequently in August 2018, an additional 25 percent duty was imposed on

products in the second tranche, known as List 2, which covered 279 tariff subheadings with an approximate

annual trade value of $16 billion (83 FR 40823).

List 3

In September 2018, the U.S. Trade Representative, at the direction of the President, determined to modify

the prior actions in the investigation by imposing additional duties on products of China classified under

5,733 tariff subheadings with an approximate annual trade value of $200 billion (83 FR 47974; 83 FR

49153). The rate of the additional duty on these List 3 products was initially 10 percent ad valorem and

was later increased to 25 percent ad valorem in May 2019 (84 FR 20459).

List 4

In August 2019, the U.S. Trade Representative, at the direction of the President, determined to modify the

prior actions in the investigation by imposing additional 10 percent ad valorem duties on products of China

classified under approximately 3,805 tariff subheadings with an approximate annual trade value of $300

billion (84 FR 43304). The tariff subheadings subject to the 10 percent additional duties were separated

into two lists with different effective dates: September 1, 2019 for the list in Annex A, known as List 4A,

and December 15, 2019 for the list in Annex C, known as List 4B. Subsequently, at the direction of the

President, the U.S. Trade Representative determined to increase the rate of the additional duties from 10

percent to 15 percent (84 FR 45821).

46 | II. TRADE ENFORCEMENT ACTIVITIES

i. United States–China Economic and Trade Agreement

The cumulative effect of the tariffs imposed on the products in the four tranches succeeded in encouraging

China to agree to take steps to address U.S. concerns. On December 13, 2019, the United States and China

announced that they would be entering into an agreement. On January 15, 2020, they signed the Economic

and Trade Agreement Between the Government of the United States of America and the Government of

the People’s Republic of China. In this Agreement, China’s commitments include taking steps to address

some — though not all — of the issues covered in the Section 301 investigation.

On December 18, 2019, at the direction of the President, the U.S. Trade Representative suspended the

additional 15 percent duties on the products covered by List 4B (84 FR 69447). On January 22, 2020, the

U.S. Trade Representative announced that, at the direction of the President, the duties on List 4A would be

reduced to 7.5 percent effective February 14, 2020, the scheduled date for entry into force of the Economic

and Trade Agreement (85 FR 3741).

On February 14, 2020, the Economic and Trade Agreement entered into force. The Administration

continues to work to ensure that the Agreement is fully implemented, which involves constant monitoring

and, when appropriate, raising compliance issues with the Government of China.

For a discussion on agriculture-related activities, see Chapter III.C.2 Agriculture and Trade Bilateral and

Regional Activities.

ii. Product Exclusions

The U.S. Trade Representative established processes by which stakeholders may request that particular

products classified within a covered tariff subheading be excluded from the additional duties (83 FR 32181;

83 FR 47236). USTR received and reviewed approximately 11,000 and 2,900 exclusion requests pertaining

to Lists 1 and 2, respectively, approving approximately 3,700 and 1,100 of them. USTR subsequently

established an exclusion process for products of China covered under List 3 (84 FR 29576). USTR received

approximately 30,300 exclusion requests under List 3. USTR approved approximately 1,500 requests.

USTR also established an exclusion process for products of China covered under List 4A (84 FR 57144).

USTR received approximately 8,800 requests and approved 575 of them.

Extension of Exclusions and Response to the COVID-19 Pandemic

The first tranche of approved exclusions expired in December 2019 and the final tranche of approved

exclusions expired in October 2020. Starting in November 2019, USTR established processes for

submitting public comments on whether to extend particular exclusions (See, e.g., 85 FR 6687; 85 FR

38482). Pursuant to these processes, USTR determined to extend 137 exclusions covered under List 1, 59

exclusions on List 2, 266 exclusions on List 3, and 87 exclusions on List 4, for a total of 549 exclusions.

Most of the extended exclusions expired in December 2020.

On March 25, 2020, USTR sought public comment on additional modifications to the tariff actions in order

to address the COVID-19 pandemic. On December 22, 2020, USTR announced its determination to further

extend certain product exclusions on medical-care products and to make further modifications to remove

Section 301 duties from additional medical-care products to address the COVID-19 pandemic (85 FR

85831). An additional extension was announced on March 10, 2021 (86 FR 13785). On August 27, 2021,

USTR sought public comment on whether to further extend the 99 product exclusions for medical-care

products (86 FR 48280). On November 16, 2021, USTR determined to further extend 81 of the product

exclusions for medical-care products for an additional 6 months (86 FR 63438). On June 3, 2022, USTR

announced a subsequent extension for an additional 6 months (until November 30, 2022) (87 FR 33871).

II. TRADE ENFORCEMENT ACTIVITIES | 47

On November 29, 2022, the U.S. Trade Representative further extended the same exclusions for an

additional 3 months (until February 28, 2023).

On October 8, 2021, USTR opened a docket seeking public comment on the possible reinstatement of the

549 previously extended exclusions (86 FR 56345). On March 28, 2022, the U.S. Trade Representative

determined to further modify the action by reinstating 352 of the 549 expired exclusions. The reinstated

exclusion applied as of October 12, 2021, and were first extended through December 31, 2022 (87 FR

17380). On December 16, 2022, USTR announced that the U.S. Trade Representative had decided on a

further extension, through September 30, 2023 (87 FR 78187).

In May 2022, USTR commenced the statutory four-year review process by notifying representatives of

domestic industries that benefit from the tariff actions of the possible termination of those actions and of

the opportunity for the representatives to request continuation (19 U.S.C. § 2417(c)) (87 FR 26797). In

September 2022, USTR announced that USTR had received requests for continuation of the actions from

representatives of domestic industries which benefit from the tariff actions; that, accordingly, the tariff

actions had not terminated; and, that USTR would conduct a statutory review of the tariff actions (87 FR

55073). On November 15, 2022, USTR opened an electronic portal to receive public comments on the

review (87 FR 62914). In accordance with the statute, USTR sought public comments on a number of

issues, including views on the effectiveness of the actions in achieving the objectives of the investigation,

other actions that could be taken, and the effects of the actions on the United States economy, including

consumers. As part of this process, USTR sought specific views on the impact of the actions on U.S.

workers, U.S. small businesses, U.S. manufacturing, critical supply chains, U.S. technological leadership,

and possible tariff inversions (i.e., where additional tariffs on goods are lower than additional tariffs on

inputs used to produce those goods). The comment period ended on January 17, 2023.

2. European Union – Measures Concerning Meat and Meat Products

(Hormones)

The European Union (EU) prohibits imports into the EU of animals and meat from animals to which certain

hormones have been administered (the “hormone ban”). In 1996, the United States initiated a WTO dispute

with respect to the hormone ban. WTO panel and Appellate Body reports found that the measure was

inconsistent with WTO obligation because the ban was not based on scientific evidence, a risk assessment,

or relevant international standards. Under WTO procedures, the European Communities (EC), the

predecessor to the EU, was to come into compliance with its obligations by May 13, 1999, but it failed to

do so. Accordingly, in May 1999, the United States requested authorization from the Dispute Settlement

Body (DSB) to suspend the application to the EC, and Member States thereof, of tariff concessions and

related obligations under the General Agreement on Tariffs and Trade (GATT) 1994. The EC did not

contest that it had failed to comply with its WTO obligations, but it objected to the level of suspension

proposed by the United States.

On July 12, 1999, a WTO arbitrator determined that the level of nullification or impairment suffered by the

United States as a result of the WTO inconsistent hormone ban was $116.8 million per year. Accordingly,

on July 26, 1999, the DSB authorized the United States to suspend the application to the EC and its Member

States of tariff concessions and related obligations under the GATT 1994, covering trade up to $116.8

million per year. In a notice published in July 1999, USTR announced that the United States was acting

pursuant to this authorization by initiating proceedings under Section 301 to impose 100 percent ad valorem

duties on certain products of certain EC Member States.

In February 2005, a WTO panel was established to consider the EU’s claims that it had brought its hormone

ban into compliance with its WTO obligations and that the increased duties imposed by the United States

48 | II. TRADE ENFORCEMENT ACTIVITIES

were no longer authorized by the DSB. In 2008, the DSB adopted panel and Appellate Body reports that

confirmed that the July 1999 DSB authorization remained in effect.

In January 2009, the U.S. Trade Representative: (1) removed certain products from the 1999 list of products

subject to 100 percent ad valorem duties; (2) imposed 100 percent ad valorem duties on some new products

from certain EU Member States; (3) modified the coverage with respect to particular EU Member States;

and, (4) raised the level of duties on one product. The trade value of the products subject to the modified

list did not exceed the $116.8 million per year authorized by the WTO.

In March 2009, the U.S. Trade Representative delayed the effective date of the additional duties (items two

through four above) imposed under the January 2009 modifications in order to allow additional time for

reaching an agreement with the EU. The effective date of the removal of duties under the January

modifications remained March 23, 2009. Accordingly, subsequent to March 23, 2009, the additional duties

put in place in July 1999 remained applicable to a reduced list of products.

In May 2009, the United States and the EU concluded a memorandum of understanding (MOU) which,

under the first phase of the MOU scheduled to conclude in August 2012, obligated the EU to open a new

duty-free tariff-rate quota (TRQ) for beef not produced with certain growth-promoting hormones. The

United States in turn agreed not to impose duties above those in effect as of March 23, 2009.

On August 3, 2012, the United States and the EU, by mutual agreement, entered into a second phase of the

MOU, to expire in one year. Under phase two, the U.S. Trade Representative terminated the remaining

additional duties, and the EU expanded the TRQ from 20,000 to 45,000 metric tons. In August 2013, the

United States and the EU extended phase two for an additional two years, until August 2015.

On December 9, 2016, representatives of the U.S. beef industry requested that the U.S. Trade

Representative reinstate trade action against the EU because the TRQ was not providing benefits sufficient

to compensate for the harm caused by the EU’s hormone ban. On December 28, 2016, USTR published a

Federal Register notice seeking public comments on specific EU products in order to consider possible

reinstatement of duties. USTR held a public hearing on February 15, 2017.

In 2019, the United States and the European Union concluded successful negotiations to resolve concerns

with the operation of the TRQ established by the MOU. On August 2, 2019, the EU and United States

signed the Agreement on the Allocation to the United States of a Share in the Tariff Rate Quota for High

Quality Beef Referred to in the Revised MOU Regarding the Importation of Beef from Animals Not Treated

with Certain Growth-promoting Hormones and Increased Duties Applied by the United States to Certain

Products of the European Union. The Agreement establishes a duty-free TRQ exclusively for the United

States. Under the Agreement, American ranchers will have an initial TRQ of 18,500 metric tons annually,

valued at approximately $220 million. Over seven years, the TRQ will grow to 35,000 metric tons annually,

valued at approximately $420 million. On December 13, 2019, USTR published in the Federal Register

notice of its determination not to reinstate action under Section 306(c) in connection with the European

Union’s measures. Pursuant to the notice, the Section 306(c) proceeding was terminated effective January

1, 2020, the date the EU applied the U.S.-specific TRQ allocation.

USTR continues to monitor the operation of the TRQ.

II. TRADE ENFORCEMENT ACTIVITIES | 49

3. Digital Services Taxes

i. France Digital Services Taxes

On March 6, 2019, the Government of France released a proposal for a 3 percent levy on revenues that

certain companies generate from providing certain digital services to, or aimed at, persons in France. The

President of France signed the bill into law on July 24, 2019.

On July 10, 2019, the U.S. Trade Representative initiated an investigation of the proposed French digital

service tax (DST) pursuant to Section 302(b)(1)(A) of the Trade Act (84 FR 34042). Based on information

obtained during the investigation, USTR, with the advice of the Section 301 Committee, prepared a report

setting out findings of the investigation.

On December 6, 2019, the U.S. Trade Representative determined under Sections 301(b) and 304(a) of the

Trade Act (19 U.S.C. § 2411(b) and 2414(a)) that the act, policy, or practice covered in the investigation,

namely the French DST, is unreasonable or discriminatory and burdens or restricts U.S. commerce, and is

thus actionable under Section 301(b) of the Trade Act (84 FR 66956).

On July 10, 2020, the U.S. Trade Representative determined that action was appropriate in this investigation

and to take action in the form of additional duties on certain products of France (85 FR 43292). To allow

additional time for bilateral and multilateral discussions, and in recognition of France’s agreement to

suspend collection of its DST during 2020, the U.S. Trade Representative determined to suspend the

additional duties for up to 180 days, pursuant to Section 305(a) of the Trade Act (19 U.S.C. § 2415(a)) (85

FR 43292). Subsequently, the U.S. Trade Representative determined to further suspend the action in this

investigation as of January 6, 2021, to allow USTR to coordinate actions in all DST investigations (86 FR

2479).

On October 8, 2021, France joined the United States and 137 other jurisdictions participating in the

Organization for Economic Cooperation and Development (OECD)/Group of 20 (G20) Inclusive

Framework on Base Erosion and Profit Shifting in reaching a political agreement on a two-pillar solution

to address tax challenges arising from the digitalization of the world economy. As part of Pillar 1, all parties

agreed to remove existing DSTs and other relevant similar measures, and to coordinate the withdrawal of

these taxes. On October 21, 2021, the U.S. Department of Treasury issued a joint statement with France

and four other countries on a transitional approach to those countries’ DSTs prior to entry into force of

Pillar 1. Based on France’s commitment to remove its DST pursuant to Pillar 1 and on its political

agreement to the transitional approach prior to Pillar 1’s entry into force, the U.S. Trade Representative

determined to terminate the Section 301 action taken in the investigation of France’s DST. In coordination

with the Department of Treasury, USTR is monitoring implementation of the removal of France’s DST as

provided for under Pillar 1 and the transitional approach as provided in the joint statement.

ii. Other Digital Services Taxes

Austria

In October 2019, Austria adopted a DST that applies a five percent tax to revenues from online advertising

services. The law went into force on January 1, 2020. The tax applies only to companies with at least €750

million ($790 million) in annual global revenues for all services and €25 million ($26 million) in in-country

revenues for covered digital services (86 FR 6406).

50 | II. TRADE ENFORCEMENT ACTIVITIES

On June 2, 2020, the U.S. Trade Representative initiated a Section 301 investigation of Austria’s DST. On

the same day, the U.S. Trade Representative requested consultations with the Government of Austria (85

FR 34709).

Based on information obtained during the investigation, USTR prepared a comprehensive report on

Austria’s DST. Based on the information obtained during the investigation and the advice of the Section

301 Committee, the U.S. Trade Representative determined that Austria’s DST is unreasonable or

discriminatory and burdens or restricts U.S. commerce, and therefore is actionable under sections 301(b)

and 304(a) of the Trade Act (86 FR 6406).

On June 2, 2021, the U.S. Trade Representative determined to take action in the form of additional duties

on certain products of Austria and to immediately suspend those additional duties for up to 180 days (86

FR 30361).

On October 8, 2021, Austria joined the United States and 134 other jurisdictions participating in the

OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting in reaching a political agreement on

a two-pillar solution to address tax challenges arising from the digitalization of the world economy. As

part of Pillar 1, all parties agreed to remove existing DSTs and other relevant similar measures, and to

coordinate the withdrawal of these taxes. On October 21, 2021, the Department of Treasury issued a joint

statement with Austria and four other countries on a transitional approach to those countries’ DSTs prior to

entry into force of Pillar 1. Based on Austria’s commitment to remove its DST pursuant to Pillar 1 and on

its political agreement to the transitional approach prior to Pillar 1’s entry into force, the U.S. Trade

Representative has determined to terminate the Section 301 action taken in the investigation of Austria’s

DST. In coordination with the Department of Treasury, USTR is monitoring implementation of the removal

of Austria’s DST as provided for under Pillar 1 and the transitional approach as provided in the joint

statement.

Brazil

In 2020, Brazil began considering legislative proposals that would provide for a DST. On June 2, 2020,

the U.S. Trade Representative initiated a Section 301 investigation of the DST under consideration by

Brazil. On the same day, the USTR requested consultations with the Government of Brazil (85 FR 34709).

On January 13, 2021, USTR published a status update regarding the investigation of Brazil’s DST. The

status update summarized the DST proposals and outlined USTR’s preliminary concerns.

As of March 25, 2021, Brazil had not adopted a DST. Accordingly, the U.S. Trade Representative

determined that it was appropriate to terminate the Brazil DST investigation. USTR continues to monitor

the status of any proposed or adopted DST in Brazil, and may, if appropriate, initiate a new Section 301

investigation.

The Czech Republic

In 2020, the Czech Republic began considering a legislative proposal that would provide for a DST. On

June 2, 2020, the U.S. Trade Representative initiated a Section 301 investigation of the DST under

consideration by the Czech Republic. On the same day, the U.S. Trade Representative requested

consultations with the Czech Government (85 FR 34709).

On January 13, 2021, USTR published a status update regarding the investigation of the Czech Republic’s

DST. The status update summarized the DST proposal and outlined USTR’s preliminary concerns.

II. TRADE ENFORCEMENT ACTIVITIES | 51

As of March 25, 2021, the Czech Republic had not adopted a DST. Accordingly, the U.S. Trade

Representative determined that it was appropriate to terminate the Czech Republic DST investigation.

USTR continues to monitor the status of any proposed or adopted DST in the Czech Republic, and may, if

appropriate, initiate a new Section 301 investigation.

The European Union

In 2020, the European Union (EU) began a process to consider a DST which was to be proposed by the

European Commission. On June 2, 2020, the U.S. Trade Representative initiated a Section 301

investigation of the DST under consideration by the EU. On the same day, the U.S. Trade

Representative requested consultations with the EU (85 FR 34709).

On January 13, 2021, USTR published a status update regarding the investigation of the EU’s DST. The

status update provided a summary and outlined USTR’s preliminary concerns.

As of March 25, 2021, the EU had not adopted a DST. Accordingly, the U.S. Trade Representative

determined that it was appropriate to terminate the EU DST investigation. USTR continues to monitor the

status of any proposed or adopted DST in the EU, and may, if appropriate, initiate a new Section 301

investigation.

India

In March 2020, India adopted a two percent DST. The tax only applies to non-resident companies, and

covers online sales of goods and services to, or aimed at, persons in India. The tax applies to companies

with annual revenues in excess of approximately Rs. 20 million (approximately $267,000). The tax went

into effect on April 1, 2020 (85 FR 34709).

On June 2, 2020, the U.S. Trade Representative initiated a Section 301 investigation of India’s DST. On

the same day, the USTR requested consultations with the Government of India (85 FR 34709).

Based on information obtained during the investigation, USTR prepared a comprehensive report on India’s

DST. Based on the information obtained during the investigation and the advice of the Section 301

Committee, the U.S. Trade Representative determined that India’s DST is unreasonable or discriminatory

and burdens or restricts U.S. commerce, and therefore is actionable under sections 301(b) and 304(a) of the

Trade Act (86 FR 2478).

On June 2, 2021, the U.S. Trade Representative determined to take action in the form of additional duties

on certain products of India and to immediately suspend those additional duties for up to 180 days (86 FR

30356). On October 8, 2021, India joined the United States and 134 other jurisdictions participating in the

OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting in reaching a political agreement on

a two-pillar solution to address tax challenges arising from the digitalization of the world economy. As

part of Pillar 1, all parties agreed to remove existing DSTs and other relevant similar measures, and to

coordinate the withdrawal of these taxes.

On November 24, 2021, India and the United States issued statements describing a transitional approach to

India’s DST prior to entry into force of Pillar 1. These statements reflect a political agreement that, in

defined circumstances, the DST liability that U.S. companies accrue in India during the interim period will

be creditable against future taxes accrued under Pillar 1 of the OECD Agreement. Based on the

commitment of India to remove its DST pursuant to Pillar 1 and on India’s political agreement to this

transitional approach prior to Pillar 1’s entry into force, the U.S. Trade Representative determined to

terminate the Section 301 action taken in the investigation of India’s DST, as of November 28, 2021. In

52 | II. TRADE ENFORCEMENT ACTIVITIES

coordination with the Department of Treasury, USTR continues to monitor implementation of the removal

of India’s DST as provided for under Pillar 1 and the transitional approach agreed to by India.

Indonesia

On March 31, 2020, Indonesia issued an instrument to adopt a DST, namely, Government Regulation in

Lieu of Law (Peraturan Pemerintah Pengganti Undang-Undang or PERPPU) 1-2020. On May 16, 2020,

Government Regulation in Lieu of Law (PERPPU) 1-2020 was adopted as Law of the Republic of Indonesia

2-2020.

On June 2, 2020, the USTR initiated a Section 301 investigation of Indonesia’s DST. On the same day, the

U.S. Trade Representative requested consultations with the Government of Indonesia (85 FR 34709).

On January 13, 2021, USTR published a status update regarding the investigation of Indonesia’s DST. The

status update summarized the DST and outlined USTR’s preliminary concerns. The update noted that in

order for Indonesia’s DST to take effect, further implementing measures would be necessary and that

Indonesia had not adopted these implementing measures at that time.

As of March 25, 2021, Indonesia had not implemented its DST. Accordingly, the U.S. Trade Representative

determined that it was appropriate to terminate the Indonesia DST investigation. USTR continues to

monitor the status of Indonesia’s DST, and may, if appropriate, initiate a new Section 301 investigation.

Italy

Italy adopted a DST, effective on January 1, 2020. Italy’s DST applies to companies that generate €750

million (approximately $850 million) or more in worldwide revenues and €5.5 million (approximately

$6.25 million) or more in revenues deriving from the provision of digital services in Italy. Italy’s DST

applies a three percent rate on the total amount of taxable revenues generated during the calendar year (86

FR 2477).

On June 2, 2020, the U.S. Trade Representative initiated a Section 301 investigation of Italy’s DST. On

the same day, the U.S. Trade Representative requested consultations with the Government of Italy (85 FR

34709).

Based on the information obtained during the investigation and the advice of the Section 301 Committee,

the U.S. Trade Representative determined that Italy’s DST is unreasonable or discriminatory and burdens

or restricts U.S. commerce, and therefore is actionable under sections 301(b) and 304(a) of the Trade Act

(86 FR 2477).

On June 2, 2021, the U.S. Trade Representative determined to take action in the form of additional duties

on certain products of Italy and to immediately suspend those additional duties for up to 180 days (86 FR

30350).

On October 8, 2021, Italy joined the United States and 134 other jurisdictions participating in the

OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting in reaching a political agreement on

a two-pillar solution to address tax challenges arising from the digitalization of the world economy. As

part of Pillar 1, all parties agreed to remove existing DSTs and other relevant similar measures, and to

coordinate the withdrawal of these taxes. On October 21, 2021, the Department of Treasury issued a joint

statement with Italy and four other countries on a transitional approach to those countries’ DSTs prior to

entry into force of Pillar 1. Based on Italy’s commitment to remove its DST pursuant to Pillar 1 and on its

political agreement to the transitional approach prior to Pillar 1’s entry into force, the U.S. Trade

II. TRADE ENFORCEMENT ACTIVITIES | 53

Representative determined to terminate the Section 301 action taken in the investigation of Italy’s DST. In

coordination with the Department of Treasury, USTR continues to monitor implementation of the removal

of Italy’s DST as provided for under Pillar 1 and the transitional approach as provided in the joint statement.

Spain

Spain adopted a DST on October 7, 2020. Spain’s DST applies a three percent tax to revenues from certain

digital advertising, digital intermediation services, and data transmission services. The DST applies to

companies generating at least €750 million (approximately $850 million) in global revenues and €3 million

(approximately $3.4 million) in revenues attributable to Spain (86 FR 6407).

On June 2, 2020, the U.S. Trade Representative initiated a Section 301 investigation of Spain’s DST. On

the same day, the U.S. Trade Representative requested consultations with the Government of Spain (85 FR

34709).

On October 8, 2021, Spain joined the United States and 134 other jurisdictions participating in the

OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting in reaching a political agreement on

a two-pillar solution to address tax challenges arising from the digitalization of the world economy. As

part of Pillar 1, all parties agreed to remove existing DSTs and other relevant similar measures, and to

coordinate the withdrawal of these taxes. On October 21, 2021, the Department of Treasury issued a joint

statement with Spain and four other countries on a transitional approach to those countries’ DSTs prior to

entry into force of Pillar 1. Based on Spain’s to remove its DST pursuant to Pillar 1 and on its political

agreement to the transitional approach prior to Pillar 1’s entry into force, the U.S. Trade Representative has

determined to terminate the Section 301 action taken in the investigation of Spain’s DST. In coordination

with the Department of Treasury, USTR continues to monitor implementation of the removal of Spain’s

DST as provided for under Pillar 1 and the transitional approach as provided in the joint statement.

Turkey

Turkey adopted a DST on December 7, 2019 and the DST entered into force as of March 1, 2020. The

DST applies to companies that, during the previous calendar year, generated €750 million (approximately

$850 million) or more in worldwide revenues and TRY 20 million (approximately $2.8 million) or more in

revenues deriving from the provision of digital services in Turkey (86 FR 2480).

On June 2, 2020, the U.S. Trade Representative initiated a Section 301 investigation of Turkey’s DST. On

the same day, the U.S. Trade Representative requested consultations with the Government of Turkey (85

FR 34709).

Based on the information obtained during the investigation and the advice of the Section 301 Committee,

the U.S. Trade Representative determined that Turkey’s DST is unreasonable or discriminatory and burdens

or restricts U.S. commerce, and therefore is actionable under sections 301(b) and 304(a) of the Trade Act

(86 FR 2480).

On June 2, 2021, the U.S. Trade Representative determined to take action in the form of additional duties

on certain products of Turkey and to immediately suspend those additional duties for up to 180 days (86

FR 30353).

On October 8, 2021, Turkey joined the United States and 134 other jurisdictions participating in the

OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting in reaching a political agreement on

a two-pillar solution to address tax challenges arising from the digitalization of the world economy. As

part of Pillar 1, all parties agreed to remove existing digital services taxes and other relevant similar

54 | II. TRADE ENFORCEMENT ACTIVITIES

measures, and to coordinate the withdrawal of these taxes. On November 22, 2021, the Department of

Treasury issued a joint statement with Turkey regarding a transitional approach to Turkey’s Digital Service

Tax prior to entry into force of Pillar 1. The joint statement reflects a political agreement that DST liabilities

accrued during the transitional period will be creditable in defined circumstances against future taxes due

under Pillar 1. Based on the commitment of Turkey to remove its Digital Service Tax pursuant to Pillar 1

and on Turkey’s political agreement to the transitional approach prior to Pillar 1’s entry into force, the U.S.

Trade Representative determined to terminate the Section 301 action taken in the investigation of Turkey’s

DST. In coordination with the Department of Treasury, USTR continues to monitor implementation of the

removal of Turkey’s DST as provided for under Pillar 1 and the transitional approach as provided in the

joint statement.

The United Kingdom

The United Kingdom (UK) adopted a DST on July 22, 2020. The UK DST applies a two percent tax on

the revenues of certain search engines, social medial platforms and online marketplaces. The UK DST

applies only to companies with global digital services revenues exceeding £500 million (approximately

$641 million) and UK digital services revenues exceeding £25 million (approximately $34.1 million).

Companies became liable for this DST on April 1, 2020 (86 FR 6406).

On June 2, 2020, the U.S. Trade Representative initiated a Section 301 investigation of the UK’s proposed

DST, which was subsequently adopted. On the same day, the U.S. Trade Representative requested

consultations with the Government of the United Kingdom (85 FR 34709).

On October 8, 2021, the UK joined the United States and 134 other jurisdictions participating in the

OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting in reaching a political agreement on

a two-pillar solution to address tax challenges arising from the digitalization of the world economy. As

part of Pillar 1, all parties agreed to remove existing DSTs and other relevant similar measures, and to

coordinate the withdrawal of these taxes. On October 21, 2021, the Department of Treasury issued a joint

statement with the UK and four other countries on a transitional approach to those countries’ DSTs prior to

entry into force of Pillar 1. Based on the UK’s commitment to remove its DST pursuant to Pillar 1 and on

its political agreement to the transitional approach prior to Pillar 1’s entry into force, the U.S. Trade

Representative has determined to terminate the Section 301 action taken in the investigation of the UK’s

DST. In coordination with the Department of Treasury, USTR continues to monitor implementation of the

removal of the UK’s DST as provided for under Pillar 1 and the transitional approach as provided in the

joint statement.

4. Enforcement of U.S. WTO Rights in European Union Large Civil Aircraft

Dispute

On October 6, 2004, the United States requested WTO dispute settlement consultations with the EC (now

the EU), France, Germany, Spain, and the United Kingdom (certain Member States) concerning certain

subsidies granted by the EU and certain Member states to the EU large civil aircraft (LCA) domestic

industry, on the basis that these subsidies appeared to be inconsistent with their obligations under the GATT

1994 and the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement).

In May 2011, a WTO panel report, as amended by an Appellate Body report, confirmed that EU and certain

Member state subsidies on the manufacture of LCA breached the EU's obligations under the SCM

Agreement. The DSB adopted the reports on June 1, 2011, and recommended that the EU and certain

Member states bring the WTO-inconsistent measures into compliance with WTO rules. The EU and certain

Member states had until December 1, 2011, to bring the measures into compliance. On December 1, 2011,

II. TRADE ENFORCEMENT ACTIVITIES | 55

the EU asserted that it had implemented the DSB recommendations. The United States did not agree, and

requested authorization from the DSB to impose countermeasures commensurate with the adverse effects

of the WTO-inconsistent measures. The EU objected to the request, referring the matter to arbitration to

assess the proper level of any countermeasures.

In early 2012, the United States and the EU entered into a procedural agreement pursuant to which the

arbitration would be suspended until after WTO compliance panel and any appellate proceedings

determined whether the EU had implemented the DSB recommendations. On May 28, 2018, the DSB

adopted compliance panel and Appellate Body reports confirming that launch aid to the Airbus A380 and

A350 XWB aircraft continued to cause WTO-inconsistent adverse effects to U.S. interests.

At the request of the United States, and in accordance with the procedural agreement, on July 13, 2018, the

WTO Arbitrator resumed its work in determining the level of countermeasures to be authorized as a result

of the WTO inconsistencies.

On April 12 2019, USTR announced the initiation of a Section 301 investigation to enforce U.S. rights in

the dispute. The notice of initiation solicited written comments on several aspects of the investigation, as

well as comments on a list of products with a value of $21 billion being considered for additional duties of

up to 100 percent. Public hearings were held on May 15 to May 16, 2019.

USTR issued a second notice on July 5, 2019, that requested public comments on a supplementary list of

products with a value of $4 billion for which additional duties of up to 100 percent were also being

considered. A second hearing was held on August 5, 2019.

On October 2, 2019, the WTO Arbitrator issued a report that concluded that the appropriate level of

countermeasures in response to the WTO-inconsistent launch aid provided by the EU or certain Member

states to their LCA domestic industry is approximately $7.5 billion annually.

On October 9, 2019, the U.S. Trade Representative announced in the Federal Register (84 FR 54245) a

determination that, based on the original panel and appellate reports, the compliance panel and appellate

reports, the report of the WTO Arbitrator, and information obtained during the investigation, including

public comments, the advice of the advisory committees, the Section 301 Committee, and the Trade Policy

Staff Committee, U.S. rights under the GATT 1994 and Articles 5 and 6.3 of the SCM Agreement were

being denied, that the subsidies provided by the EU and certain Member states were inconsistent with these

agreements, and that the EU and certain Member states had not satisfactorily implemented the

recommendation of the WTO DSB. The October 9 notice also announced a list of the products with an

annual trade value of approximately $7.5 billion that would be subject to additional duties of 10 percent or

25 percent, effective October 18, 2019.

On December 12, 2019, USTR published a notice in the Federal Register (84 FR 67992) seeking comments

on a review of the October 18 action. Pursuant to the Section 301 statute, the notice sought comments on

whether products subject to additional duties should be removed or remain on the final list, whether the rate

of additional duty on specific products should be increased up to a level of 100 percent, and whether

additional duties should be imposed on products which had been subject to public comment but were not

subject to the October 18 action and the rate of additional duty to be applied to such products. A periodic

revision of the action was announced on February 14, 2020, and a notice published in the Federal Register

on February 21, 2020 (85 FR 10204). The February notice also included a determination that the United

States may take appropriate action upon any EU imposition of additional duties on U.S. products in

connection with the EU LCA dispute or the U.S. LCA dispute brought by the EU.

56 | II. TRADE ENFORCEMENT ACTIVITIES

The next review was announced June 26, 2020, and included a notice which sought comment on an

additional list of products with a value of approximately $3.1 billion being considered for additional duties

(85 FR 38488, as amended by 85 FR 39661 on July 1, 2020). The revised action was announced August

12, 2020, and included the determination that the action may be revised upon any EU imposition of

additional duties on U.S. products in connection with the EU LCA dispute or the U.S. LCA dispute brought

by the EU (85 FR 50866).

On November 9, 2020, following a decision by the WTO arbitrator in the U.S. LCA dispute that Washington

State tax rate reductions in a 2012 reference period caused $4 billion per year in adverse effects, the EU

announced that it would impose additional duties of 15 percent and 25 percent on goods of the United

States, effective November 10, 2020. The Washington State measure was withdrawn in April 2020, and

the EU had no legal basis to retaliate. Furthermore, in exercising its $4 billion authorization, the EU relied

on a benchmark reference period affected by the economic downturn caused by the COVID-19 pandemic,

which enabled the EU to cover a greater volume of imports than if, like the United States, it had used data

from a period when trade was not affected by the pandemic.

On December 31, 2020, in response to the EU’s action, the United States announced certain revisions to

the August 2020 action, including an adjustment to mirror the benchmark period used by the EU in

exercising its authorization (86 FR 674 of January 6, 2021). Using the new benchmark period, coupled

with appropriate adjustments, the December 31, 2020, revision remained consistent with the WTO

arbitrator’s award to the United States.

In February 2021, the U.S. Trade Representative together with the affected United States industry agreed

that it was unnecessary at that time to revise the action in the Section 301 investigation. (See 86 FR 9420.)

In March 2021, the United States and the United Kingdom, and the United States and the EU, issued joint

statements promoting a resolution of the disputes and announcing that each party would suspend their

imposition of additional duties on products of the other for four months. In accord with the joint statements,

the United States announced modification of the action to suspend additional duties on products of the

United Kingdom (UK) and of EU Member states, effective March 4, 2021 and March 11, 2021,

respectively. (See 86 FR 13961 and 86 FR 14513.)

On June 15 and June 17, 2021, the United States reached understandings on cooperative frameworks with

the UK and the EU regarding the dispute. In accordance with the understandings, the U.S. Trade

Representative determined to suspend the action being taken in the Section 301 investigation for five years,

beginning July 4, 2021, with respect to tariffs on goods of the UK, and beginning July 11, 2021, with respect

to tariffs on goods of EU Member states (86 FR 36313). USTR will monitor implementation by the EU

and UK of the framework understandings and their respective measures related to the matters covered in

the LCA dispute, including whether the EU or UK provides financing to an LCA producer for the

production or development of LCA that is not on market terms. If USTR considers that the implementation

of the framework understandings or measures related to the WTO dispute are not satisfactory, USTR will

take the any and all appropriate and feasible action under Section 301 to enforce U.S. WTO rights.

5. Vietnam’s Acts, Policies, and Practices Related to the Import and Use of

Illegal Timber

On October 2, 2020, the U.S. Trade Representative initiated an investigation regarding whether Vietnam’s

acts, policies and practices related to Vietnam’s import and use of illegally harvested or traded timber

(“illegal timber”) are unreasonable or discriminatory and burden or restrict United States commerce. On

the same day, the United States requested consultations with Vietnam. The notice of initiation (85 FR

II. TRADE ENFORCEMENT ACTIVITIES | 57

63639) explained that Vietnam relies on imports of timber harvested in other countries to supply the timber

inputs needed for its wood products manufacturing sector, and evidence suggests that a significant portion

of that imported timber was illegally harvested or traded. Through the notice of initiation, USTR solicited

written comments. USTR received 71 submissions in response.

USTR and the Section 301 Committee convened a virtual public hearing on December 28, 2020, during

which 19 witnesses provided testimony and responded to questions. On January 8, 2021, the United States

held consultations with the Government of Vietnam.

On October 1, 2021, the United States and Vietnam signed an agreement that addresses U.S. concerns in

the timber investigation. (See 86 FR 55681.) The Agreement secures commitments that will help keep

illegally harvested or traded timber out of the supply chain and protect the environment and natural

resources. In April 2022, the United States and Vietnam convened the first meeting of the Timber Working

Group, which was established to facilitate coordination and oversee implementation of the agreement. The

second meeting of the Timber Working Group was held in November 2022. USTR continues to monitor

Vietnam’s implementation of the Agreement.

For further discussion on this investigation, see Chapter III.G.1 Trade and the Environment Free Trade

Agreements and Bilateral Activities.

6. Vietnam’s Acts, Policies, and Practices Related to Currency Valuation

On October 2, 2020, the U.S. Trade Representative initiated an investigation regarding whether Vietnam’s

acts, policies, and practices related to the valuation of its currency are unreasonable or discriminatory and

burden or restrict United States commerce. On the same day, the United States requested consultations

with Vietnam. The notice of initiation (85 FR 63637) explained that the State Bank of Vietnam’s

management of its currency is closely tied to the U.S. dollar, and that available analysis indicated that

Vietnam’s currency had been undervalued for the past three years. The notice further explained that

available evidence indicated that the Government of Vietnam, through the State Bank of Vietnam, actively

intervened in the foreign exchange market which contributed to the dong’s undervaluation in 2019.

Through the notice of initiation, USTR solicited public comments. USTR received 66 submissions in

response.

On December 23, 2020, the United States held consultations with the Government of Vietnam. On

December 29, 2020, USTR and the Section 301 Committee held a virtual public hearing on the

investigation. During the hearing, 21 witnesses testified and responded to questions.

On January 15, 2021, in consultation with the Department of Treasury, based on the information obtained

in the investigation, and taking account of public comments and advice of the Section 301 Committee and

Advisory Committees, the U.S. Trade Representative determined that Vietnam’s acts, policies, and

practices related to currency valuation, including excessive foreign exchange market interventions and other

related actions, taken in their totality, are unreasonable and burden or restrict U.S. commerce, and thus

actionable under Section 301 (86 FR 6732).

On July 23, 2021, based on an agreement reached between the Department of Treasury and the State Bank

of Vietnam regarding Vietnam’s currency practices, the U.S. Trade Representative determined that no

action under Section 301 in the currency investigation was warranted at that time because Vietnam’s

agreement with the Department of Treasury provided a satisfactory resolution of the matter subject to the

investigation (86 FR 40675). USTR, in coordination with the Department of Treasury, continues to monitor

Vietnam’s implementation of its commitments under the agreement and associated measures going forward.

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C. Section 201

Section 201 of the Trade Act of 1974 provides a procedure whereby the President may grant temporary

import relief to a domestic industry if increased imports are a substantial cause of serious injury or the threat

of serious injury. Relief may be granted for an initial period of up to four years, with the possibility of

extending the relief to a maximum of eight years. Import relief is designed to redress the injury and to

facilitate positive adjustment by the domestic industry; it may consist of increased tariffs, quantitative

restrictions, or other forms of relief. Section 201 also authorizes the President to grant provisional relief in

cases involving “critical circumstances” or certain perishable agricultural products.

For an industry to obtain relief under Section 201, the U.S. International Trade Commission (USITC) must

first determine that a product is being imported into the United States in such increased quantities as to be

a substantial cause (a cause which is important and not less than any other cause) of serious injury, or the

threat thereof, to the U.S. industry producing a like or directly competitive product. If the USITC makes

an affirmative injury determination (or is equally divided on injury) and recommends a remedy to the

President, the President may provide relief either in the amount recommended by the USITC or in such

other amount as he finds appropriate. The criteria for import relief in Section 201 are based on Article XIX

of the General Agreement on Tariffs and Trade (GATT) 1994––commonly referred to as the “escape

clause”––and the World Trade Organization (WTO) Agreement on Safeguards.

Section 204 of the Trade Act of 1974 also requires the USITC to monitor developments with respect to the

domestic industry following the President’s determination to impose a safeguard measure. When the

duration of a safeguard measure is longer than three years, the USITC must submit a report to the President

and Congress on the results of its monitoring no later than the midterm of the measure.

Safeguard measures are limited to an initial period of no more than four years. However, pursuant to

Section 204 of the Trade Act of 1974, the relevant domestic industry may file a petition to extend a

safeguard measure, or the President may request an extension investigation. If such a petition or request is

received, the USITC must investigate and determine, pursuant to Section 204, whether (1) the action

continues to be necessary to prevent or remedy serious injury, and (2) there is evidence that the industry is

making a positive adjustment to import competition. If the USITC reaches an affirmative determination on

these two questions, then Section 203 of the Trade Act of 1974 authorizes the President to extend the

safeguard measure. The effective period of any safeguard action, including any extensions of a safeguard

action, may not, in the aggregate, exceed eight years.

Extension of the Safeguard Measure on Certain Crystalline Silicon Photovoltaic Cells, Whether or Not

Partially or Fully Assembled into Other Products

Effective February 7, 2018, the President imposed a safeguard measure on imports of certain crystalline

silicon photovoltaic cells (CSPV), whether or not partially or fully assembled into other products (CSPV

products). Following receipt of a petition by the domestic industry requesting an extension of the safeguard

measure, the USITC conducted an investigation under Section 204 of the Trade Act of 1974 and issued a

report on December 8, 2021, in which it found that the safeguard measure continues to be necessary to

prevent or remedy the serious injury to the domestic industry, and that there is evidence that the domestic

industry is making a positive adjustment to import competition. On February 4, 2022, the President issued

a proclamation extending the safeguard measure to (1) continue the tariff-rate quota (TRQ) on imports of

solar cells for an additional four years; (2) continue the imposition of duties on imports of modules for an

II. TRADE ENFORCEMENT ACTIVITIES | 59

additional four years, with annual reductions in the applicable duty rate; and (3) exclude bifacial panels

from the extension.

In addition, pursuant to authority delegated by the President under Section 203 of the Trade Act of 1974,

on July 8, 2022, the U.S. Trade Representative reached an agreement with Canada to limit the export from

Canada and the import into the United States of CSPV products. The text of the Memorandum of

Understanding Between the United States and Canada on Trade in Solar Products can be found on the

USTR website. Based on this agreement, the U.S. Trade Representative determined to suspend application

of the safeguard measure to CSPV product imports from Canada effective February 1, 2022.

D. WTO and FTA Enforcement

This section includes a discussion of current U.S. involvement in World Trade Organization (WTO) and

free trade agreement (FTA) dispute settlement processes. The United States–Mexico–Canada Agreement

(USMCA) also includes an innovative labor-related Rapid Response Mechanism (RRM) in the dispute

settlement chapter to address protection of association and collective bargaining rights at the facility level.

For further discussion of enforcement actions related to the Rapid Response Mechanism, see Chapter I.B.9

Mexico and Canada.

Key Developments in 2022

In 2022, the United States brought a new USMCA challenge against Canada’s administration of its dairy

tariff-rate quotas. The U.S. case raises claims relating to the ineligibility of certain types of importers to

apply for USMCA dairy tariff-rate quota (TRQ) allocations, the imposition of a 12-month activity

requirement for TRQ allocation applicants and recipients, the partial allocation of the calendar year 2022

dairy TRQs, and the use of a market-share approach for determining TRQ allocations. The United States

also initiated a new USMCA dispute by requesting consultations with Mexico on certain measures by

Mexico that undermine American companies and U.S.-produced energy in favor of Mexico’s state-owned

electrical utility, the Comisión Federal de Electricidad (CFE), and state-owned oil and gas company,

Petróleos Mexicanos (PEMEX). Mexico’s actions include, but are not limited to, amendments to Mexico’s

electricity law that would prioritize the distribution of CFE-generated power over cleaner sources of energy

provided by private sector suppliers, such as wind and solar. They also include Mexico’s delays, denials,

and revocations of U.S. companies’ abilities to operate in Mexico’s energy sector, including with regard to

renewable energy projects.

Ongoing WTO dispute settlement actions include panel proceedings against China, India, Russia, and

Turkey challenging their additional duties imposed on U.S. products in retaliation for U.S. duties on steel

and aluminum products; an appeal by China of a panel report rejecting China’s challenge to the U.S.

safeguard measure for solar products; compliance proceedings, initiated by China, to determine whether

China has complied with the WTO’s recommendations regarding its excessive levels of annual domestic

support and its administration of grains TRQs; and, an appeal by India of the Panel’s findings concerning

the U.S. challenge of four export subsidy schemes benefitting numerous Indian exporters.

The cases described below provide further detail about current U.S. involvement in WTO and FTA dispute

settlement processes. Further information on disputes to which the United States is a party, and a list of

U.S. submissions, are available on the Office of the United States Trade Representative (USTR) website.

60 | II. TRADE ENFORCEMENT ACTIVITIES

Free Trade Agreement Disputes Brought by the United States

USMCA: Canada – Dairy TRQ Allocation Measures (CDA-USA-2021-31-01)

On December 9, 2020, the United States requested USMCA Chapter 31 consultations with Canada

regarding Canada’s administration of its dairy TRQs. These consultations concerned the 14 TRQs on dairy

products that Canada has the right to maintain under the USMCA on milk, cream, skim milk powder, butter

and cream powder, industrial cheeses, cheeses of all types, milk powders, concentrated or condensed milk,

yogurt and buttermilk, powdered buttermilk, whey powder, products consisting of natural milk constituents,

ice cream and ice cream mixes, and other dairy.

In notices to importers that Canada published in June and October 2020 and May 2021 for dairy TRQs,

Canada set aside and limited access to a percentage of the quota for processors and for so-called “further

processors.” By setting aside and limiting access to a percentage of each dairy TRQ exclusively for

processors, the United States alleged that Canada undermined the ability of American dairy farmers,

processors, and exporters to benefit from the agreed-upon TRQs and sell a wide range of dairy products to

Canadian consumers. The United States challenged Canada’s measures as inconsistent with Articles

3.A.2.4(b), 3.A.2.6(a), 3.A.2.11(b), 3.A.2.11(c), and 3.A.2.11(e) of the USMCA.

On December 21, 2020, Canada and the United States held consultations via videoconference, but the

Parties failed to resolve the matter. On May 25, 2021, the United States requested and established a dispute

settlement panel under the USMCA to review Canada’s dairy TRQ allocation measures. The Panel was

composed on July 5, 2021. The Parties composed the Panel as follows: Mr. Elbio Rosselli, Chair; and,

Ms. Julie Bédard and Mr. Mark C. Hansen, Members. On October 25 and October 26, 2021, a panel hearing

was held in Ottawa, Canada.

The final panel report was released to the Parties on December 20, 2021, and to the public on January 4,

2022. The Panel agreed with the United States that Canada’s allocation of dairy TRQs, specifically the set-

aside of a percentage of each dairy TRQ exclusively for Canadian processors, is inconsistent with Canada’s

commitment in Article 3.A.2.11(b) of the USMCA not to “limit access to an allocation to processors.”

On May 16, 2022, Canada published policy changes to implement the panel’s finding. The United States

rejects the changes as a basis to resolve the dispute because Canada remains out of compliance with its

USMCA obligations.

USMCA: Canada – Dairy TRQ Allocation Measures 2 (CDA-USA-2022-31-01)

On May 25, 2022, the United States requested consultations under Chapter 31 of the USMCA for the second

time regarding Canada’s dairy TRQ allocation measures, specifically relating to the ineligibility of certain

types of importers to apply for USMCA dairy TRQ allocations, the imposition of a 12-month activity

requirement for TRQ allocation applicants and recipients, and the partial allocation of the calendar year

2022 dairy TRQs. Consultations were held on June 9, 2022, but the Parties failed to resolve the matter.

After initiating consultations with Canada in May 2022, the United States identified additional aspects of

Canada’s measures that appear to be inconsistent with Canada’s obligations under the USMCA, and on

December 20, 2022, the United States requested a new round of consultations with Canada. With the new

request, the United States has expanded its challenge of Canada’s dairy TRQ allocation measures to include

Canada’s use of a market-share approach for determining TRQ allocations. Canada applies different criteria

for calculating the market share of different segments of applicants, and Canada is failing to allow importers

the opportunity to fully utilize TRQ quantities. The United States continues to challenge Canada’s dairy

TRQ allocation measures that impose new conditions on the allocation and use of the TRQs, and that

II. TRADE ENFORCEMENT ACTIVITIES | 61

prohibit eligible applicants, including retailers, food service operators, and other types of importers, from

accessing TRQ allocations. Through these measures, Canada undermines the market access that it agreed

to provide in the USMCA. As of the end of 2022, the Parties are consulting on this matter.

USMCA: Mexico – Measures Related to Energy (MEX-USA-2022-31-01)

On July 20, 2022, the United States formally requested consultations with Mexico under the USMCA. The

consultations relate to certain measures by Mexico that undermine American companies and U.S.-produced

energy in favor of Mexico’s state-owned electrical utility, the Comisión Federal de Electricidad (CFE), and

state-owned oil and gas company, Petróleos Mexicanos (PEMEX). Specifically, the United States is

challenging a 2021 amendment to Mexico’s Electric Power Industry Law that prioritizes CFE-produced

electricity over electricity generated by all private competitors; Mexico’s inaction, delays, denials, and

revocations of private companies’ abilities to operate in Mexico’s energy sector; a December 2019

regulation granting only PEMEX an extension to comply with the maximum sulfur content requirements

under Mexico’s applicable automotive diesel fuel standard; and, a June 2022 action that advantages

PEMEX, CFE, and their products in the use of Mexico’s natural gas transportation network. These

measures appear to be inconsistent with several of Mexico’s USMCA obligations, including under the

Market Access, Investment, and State-Owned Enterprises chapters. As of the end of 2022, the Parties

continue to consult on this matter.

Free Trade Agreement Disputes Brought Against the United States

USMCA: United States – Crystalline Silicon Photovoltaic Cells Safeguard Measure on Solar Products

(USA-CDA-2021-31-01)

On December 22, 2020, Canada requested USMCA Chapter 31 consultations with the United States

regarding implementation of a safeguard measure on certain crystalline silicon photovoltaic cells (CSPV

products) (whether or not partially or fully assembled into other products) that are imported into the United

States. The measure imposes increased duties and TRQs on global imports of covered products. Canada

challenged the inclusion of imports from Canada in the measure. On December 30, 2020, Mexico requested

to join the consultations under USMCA Chapter 31 as a third party. Consultations were held on January

28, 2021, but the Parties failed to resolve the matter.

On June 18, 2021, Canada requested the establishment of a USMCA Chapter 31 dispute settlement panel.

In its panel request and subsequent written submissions, Canada alleged that the President’s decision in

2018 not to exclude Canadian products from the safeguard measure was inconsistent with USMCA Articles

10.2.1, 10.2.2, 10.2.5(b), 10.3, and 2.4.2. Canada also alleged that section 312 of the USMCA

Implementation Act (19 U.S.C. § 4552), which provides the President with definitive authority to determine

whether to exclude USMCA Parties from safeguard actions, is inconsistent with Article 10.3 of the

USMCA. On June 25, 2021, Mexico filed a notification that it will participate as a third party in this

dispute.

The Panel was composed on August 4, 2021. The Parties composed the Panel as follows: Mr. Mario Matus

Baeza, Chair; and, Ms. Jennifer Hillman and Mr. Donald McRae, Members. A panel hearing was held on

November 10, 2021, in Washington, D.C.

The Panel circulated its final report on February 15, 2022, which constituted a mixed result for the United

States. The panel found that the United States acted inconsistently with aspects of USMCA Chapters 2 and

10 by including imports of solar products from Canada in the safeguard measure. However, the panel

rejected Canada’s claim that a U.S. statutory provision vesting the President with authority to make

62 | II. TRADE ENFORCEMENT ACTIVITIES

exclusion determinations for imports from USMCA Parties in safeguard proceedings is facially inconsistent

with USMCA Chapter 10.

On July 8, 2022, the United States and Canada signed a Memorandum of Understanding (MOU) on trade

in solar products, which constituted a resolution of this USMCA dispute.

USMCA: United States – Automotive Rules of Origin

On August 20, 2021, Mexico requested consultations with the United States regarding the interpretation

and application of certain rules of origin provisions for automobiles under the USMCA. On August 26,

2021, Canada notified its intent to join the consultations. The United States held consultations with Mexico

on September 24, 2021. Mexico requested and established a dispute settlement panel on January 6, 2022,

and Canada joined the dispute as a co-complainant on January 13, 2022. The Parties composed the Panel

on March 22, 2022, as follows: Mr. Elbio Rosselli, Chair; and, Ms. Kathleen Claussen, Ms. Ann Ryan

Roberson, Mr. Jorge Miranda, and Mr. Donald McRae, Members. As of December 2022, the panel

proceedings were ongoing.

World Trade Organization Disputes Brought by the United States

In 2022, the United States continued to be one of the most active participants in the WTO dispute settlement

process. This section includes brief summaries of dispute settlement activity in 2022 where the United

States was a complainant (listed alphabetically by responding party, and then chronologically).

China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and

Audiovisual Entertainment Products (DS363)

On April 10, 2007, the United States requested consultations with China regarding certain measures related

to the import and/or distribution of imported films for theatrical release, audiovisual home entertainment

products (e.g., video cassettes and DVDs), sound recordings, and publications (e.g., books, magazines,

newspapers, and electronic publications). On July 10, 2007, the United States requested supplemental

consultations with China regarding certain measures pertaining to the distribution of imported films for

theatrical release and sound recordings.

Specifically, the United States was concerned that certain Chinese measures: (1) restricted trading rights

(such as the right to import goods into China) with respect to imported films for theatrical release,

audiovisual home entertainment products, sound recordings, and publications; and, (2) restricted market

access for, or discriminated against, imported films for theatrical release and sound recordings in physical

form, and foreign service providers seeking to engage in the distribution of certain publications, audiovisual

home entertainment products, and sound recordings. The Chinese measures at issue appeared to be

inconsistent with several WTO provisions, including provisions in the General Agreement on Tariffs and

Trade (GATT) 1994 and General Agreement on Trade in Services (GATS), as well as specific commitments

made by China in its WTO accession agreement.

The United States and China held consultations on June 5 and June 6, 2007, and on July 31, 2007. At the

request of the United States, the WTO established a panel on November 27, 2007, to examine the U.S.

complaint. On March 27, 2008, the Director-General composed the Panel as follows: Mr. Florentino P.

Feliciano, Chair; and, Mr. Juan Antonio Dorantes and Mr. Christian Häberli, Members.

The report of the Panel was circulated to WTO Members and made public on August 12, 2009. In the final

report, the Panel made three critical sets of findings. First, the Panel found that China’s restrictions on

foreign invested enterprises (and in some cases foreign individuals) from importing films for theatrical

II. TRADE ENFORCEMENT ACTIVITIES | 63

release, audiovisual home entertainment products, sound recordings, and publications are inconsistent with

China’s trading rights commitments as set forth in China’s protocol of accession to the WTO. The Panel

also found that China’s restrictions on the right to import these products are not justified by Article XX(a)

of the GATT 1994. Second, the Panel found that China’s prohibitions and discriminatory restrictions on

foreign owned or controlled enterprises seeking to distribute publications and audiovisual home

entertainment products and sound recordings over the Internet are inconsistent with China’s obligations

under the GATS. Third, the Panel also found that China’s treatment of imported publications is inconsistent

with the national treatment obligation in Article III:4 of the GATT 1994.

In September 2009, China filed a notice of appeal to the WTO Appellate Body, appealing certain of the

Panel’s findings, and the United States filed an appeal on one aspect of the Panel’s analysis of China’s

defense under GATT Article XX(a). On December 21, 2009, the Appellate Body issued its report. The

Appellate Body rejected each of China’s claims on appeal. The Appellate Body also found that the Panel

had erred in the aspect of the analysis that the United States had appealed. The Dispute Settlement Body

(DSB) adopted the Appellate Body and panel reports on January 19, 2010. On July 12, 2010, the United

States and China notified the DSB that they had agreed on a 14-month period of time for implementation,

to end on March 19, 2011.

China subsequently issued several revised measures, and repealed other measures, relating to the market

access restrictions on books, newspapers, journals, DVDs, and music. As China acknowledged, however,

it did not issue any measures addressing theatrical films. Instead, China proposed bilateral discussions with

the United States in order to seek an alternative solution. The United States and China reached agreement

in February 2012 on an MOU providing for substantial increases in the number of foreign films imported

and distributed in China each year and substantial additional revenue for foreign film producers. The MOU

calls for China and the United States to engage in consultations in calendar year 2017 and, through this

consultation process, to provide for further meaningful compensation to the United States. China and the

United States initiated consultations in 2017; however, to date, China has not agreed to provide further

meaningful compensation, as it committed to do under the MOU.

China – Measures Relating to the Exportation of Various Raw Materials (DS394)

On June 23, 2009, the United States requested consultations with China regarding China’s export restraints

on a number of important raw materials. The materials at issue are: bauxite, coke, fluorspar, magnesium,

manganese, silicon metal, silicon carbide, yellow phosphorus, and zinc. These materials are inputs for

numerous downstream products in the steel, aluminum, and chemical sectors.

The United States challenged China’s export restraints on these raw materials as inconsistent with several

WTO provisions, including provisions in the GATT 1994, as well as specific commitments made by China

in its WTO accession agreement. Specifically, the United States challenged certain Chinese measures that

impose: (1) quantitative restrictions in the form of quotas on exports of bauxite, coke, fluorspar, silicon

carbide, and zinc ores and concentrates, as well as certain intermediate products incorporating some of these

inputs; and, (2) export duties on several raw materials. The United States also challenged other related

export restraints, including export licensing restrictions, minimum export price requirements, and

requirements to pay certain charges before certain products can be exported, as well as China’s failure to

publish relevant measures.

The United States and China held consultations on July 30, and on September 1 and September 2, 2009,

but did not resolve the dispute. The EU and Mexico also requested and held consultations with China on

these measures. On November 19, 2009, the EU and Mexico joined the United States in requesting the

establishment of a panel, and on December 21, 2009, the WTO established a single panel to examine all

64 | II. TRADE ENFORCEMENT ACTIVITIES

three complaints. On March 29, 2010, the Director-General composed the Panel as follows: Mr. Elbio

Rosselli, Chair; and, Ms. Dell Higgie and Mr. Nugroho Wisnumurti, Members.

The Panel’s final report was circulated to Members on July 5, 2011. The Panel found that the export duties

and export quotas imposed by China on various forms of bauxite, coke, fluorspar, magnesium, manganese,

silicon carbide, silicon metal, and zinc constitute a breach of WTO rules and that China failed to justify

those measures as legitimate conservation measures, environmental protection measures, or short supply

measures. The Panel also found China’s imposition of minimum export price, export licensing, and export

quota administration requirements on these materials, as well as China’s failure to publish certain measures

related to these requirements inconsistent with WTO rules.

On January 30, 2012, the Appellate Body issued a report affirming the Panel’s findings on all significant

claims, including that the Panel correctly made recommendations for China to bring its measures into

conformity with its WTO commitments.

The DSB adopted the Panel and Appellate Body reports on February 22, 2012. The United States, the EU,

Mexico, and China agreed that China would have until December 31, 2012, to implement the WTO’s

recommendations.

At the conclusion of the reasonable period of time (RPT) for China to comply, it appeared that China had

eliminated the export duties and export quotas on the products at issue in this dispute, as of January 1, 2013.

However, China maintains export licensing requirements for a number of the products. The United States

continues to monitor actions by China that might operate to restrict exports of raw materials at issue in this

dispute.

China – Certain Measures Affecting Electronic Payment Services (DS413)

On September 15, 2010, the United States requested consultations with China concerning issues relating to

certain restrictions and requirements maintained by China pertaining to electronic payment services (EPS)

for payment card transactions and the suppliers of those services. EPS enable transactions involving credit

card, debit card, charge card, check card, automated teller machine (ATM) card, prepaid card, or other

similar card or money transmission product, and manage and facilitate the transfers of funds between

institutions participating in such card-based electronic payment transactions.

EPS provide the essential architecture for card-based electronic payment transactions, and EPS are supplied

through complex electronic networks that streamline and process transactions and offer an efficient and

reliable means to facilitate the movement of funds from the cardholders purchasing goods or services to the

individuals or businesses that supply them. EPS consist of a network, rules and procedures, and an

operating system that allow cardholders’ banks to pay merchants’ banks the amounts they are owed. EPS

suppliers receive, check and transmit the information that processors need to conduct the transactions. The

rules and procedures established by the EPS supplier give the payment system stability and integrity, and

enable net payment flows among the institutions involved in card-based electronic transactions. The best-

known EPS suppliers are credit and debit card companies based in the United States.

China instituted and maintains measures that operate to block foreign EPS suppliers, including U.S.

suppliers, from supplying these services, and that discriminate against foreign suppliers at every stage of a

card-based electronic payment transaction. The United States challenged China’s measures affecting EPS

suppliers as inconsistent with China’s national treatment and market access commitments under the GATS.

The United States and China held consultations on October 27 and October 28, 2010, but these consultations

did not resolve the dispute. At the request of the United States, on March 25, 2011, the WTO established

II. TRADE ENFORCEMENT ACTIVITIES | 65

a panel to examine the U.S. complaint. On July 4, 2011, the Director-General composed the Panel as

follows: Mr. Virachai Plasai, Chair; and, Ms. Elaine Feldman and Mr. Martín Redrado, Members.

The Panel circulated its report on July 16, 2012. China did not appeal the Panel’s findings, and the Panel

Report was adopted by the DSB on August 31, 2012.

The United States prevailed on significant threshold issues, including:

 EPS is a single service (or EPS are integrated services) and each element of EPS is necessary for a

payment card transaction to occur.

 EPS is properly classified under the same subsector, item (viii) of the GATS Annex on Financial

Services, which appears as subsector (d) of China’s Schedule (All payment and money transmission

services, including credit, charge, and debit cards) as the United States argued, and no element of

EPS is classified as falling in item (xiv) of the GATS Annex on Financial Services (settlement and

clearing of financial assets, including securities, derivative products, and other negotiable

instruments), as China argued and for which China has no WTO commitments.

 In addition to the “four-party” model of EPS (e.g., Visa

and MasterCard

), the “three-party”

model (e.g., American Express

) and other variations, third-party issuer processor and merchant

processors also are covered by subsector (d) of China’s Schedule.

With respect to the U.S. GATS national treatment claims, the Panel found the following breaches:

 China imposes requirements on issuers of payment cards that payment cards issued in China bear

the “Yin Lian/UnionPay logo,” and therefore China requires issuers to become members of the

China Union Pay (CUP) network; that the cards they issue in China meet certain uniform business

specifications and technical standards; and, that these requirements fail to accord to services and

service suppliers of any other Member treatment no less favorable than China accords to its own

like services and service suppliers.

 China imposes requirements that all terminals (ATMs, merchant processing devices, and point of

sale (POS) terminals) in China that are part of the national card inter-bank processing network be

capable of accepting all payment cards bearing the Yin Lian/UnionPay logo, and that these

requirements fail to accord to services and service suppliers of any other Member treatment no less

favorable than China accords to its own like services and service suppliers.

 China imposes requirements on acquirers (those institutions that acquire payment card transactions

and that maintain relationships with merchants) to post the Yin Lian/UnionPay logo, and,

furthermore, China imposes requirements that acquirers join the CUP network and comply with

uniform business standards and technical specifications of inter-bank interoperability, and that

terminal equipment operated or provided by acquirers be capable of accepting bank cards bearing

the Yin Lian/UnionPay logo, and that these requirements fail to accord to services and service

suppliers of any other Member treatment no less favorable than China accords to its own like

services and service suppliers.

With respect to the U.S. GATS market access claims, the Panel found that China’s requirements related to

certain Hong Kong and Macau transactions are inconsistent with Article XVI: 2(a) of the GATS because,

contrary to China’s Sector 7B (d) mode 3 market access commitments, China maintains a limitation on the

number of service suppliers in the form of a monopoly.

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The United States and China agreed that a RPT for China to implement the DSB recommendations and

rulings would be 11 months from the date of adoption of the recommendations and rulings, that is, until

July 31, 2013.

In April 2015, the State Council of China issued a formal decision announcing that China’s market would

be open to foreign suppliers that seek to provide EPS for domestic currency payment card transactions. The

People’s Bank of China followed this in July 2015 by publishing a draft licensing regulation for public

comment. This draft licensing regulation was finalized in June 2016. In June 2020, four months after the

entry into force of the China Economic and Trade Agreement, American Express became the first foreign

supplier of electronic payment services to secure a license to operate in China’s market. The United States

continues to urge China to ensure that approvals for foreign EPS suppliers to operate in China occur without

delay, in accordance with China’s WTO obligations, and continues to monitor the situation closely.

China – Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum (DS431)

On March 13, 2012, the United States requested consultations with China regarding China’s export

restraints on rare earths, tungsten, and molybdenum. These materials are vital inputs in the manufacture of

electronics, automobiles, steel, petroleum products, and a variety of chemicals that are used to produce both

everyday items and highly sophisticated, technologically advanced products, such as hybrid vehicle

batteries, wind turbines, and energy efficient lighting.

The United States challenged China’s export restraints on these materials as inconsistent with several WTO

provisions, including provisions in the GATT 1994, as well as specific commitments made by China in its

WTO accession agreement. Specifically, the United States challenged: (1) China’s quantitative restrictions

in the form of quotas on exports of rare earth, tungsten, and molybdenum ores and concentrates, as well as

certain intermediate products incorporating some of these inputs; (2) China’s export duties on rare earths,

tungsten, and molybdenum; and, (3) China’s other export restraints on these materials, including prior

export performance and minimum capital requirements.

The United States, together with the EU and Japan, held consultations with China on April 25 and 26, 2012,

but the consultations did not resolve the dispute.

On June 29, 2012, the EU and Japan joined the United States in requesting the establishment of a panel,

and on July 23, 2012, the WTO DSB established a single panel to examine all three complaints. On

September 24, 2012, the Director-General composed the Panel as follows: Mr. Nacer Benjelloun-Touimi,

Chair; and, Mr. Hugo Cayrús and Mr. Darlington Mwape, Members. The Panel held its meetings with the

Parties from February 26 to February 28, 2013, and on June 18 and June 19, 2013.

On March 26, 2014, the Panel circulated its report. The Panel found that the export quotas and export duties

imposed by China on various forms of rare earths, tungsten, and molybdenum constitute a breach of WTO

rules and that China failed to justify those measures as legitimate conservation measures or environmental

protection measures, respectively. The Panel also found China’s imposition of prior export performance

and minimum capital requirements inconsistent with WTO rules.

On August 7, 2014, the Appellate Body issued a report affirming the Panel’s findings on all significant

claims.

On August 29, 2014, the DSB adopted the Panel and Appellate Body reports. In September 2014, China

announced its intention to implement the DSB recommendations and rulings in the dispute, and stated that

II. TRADE ENFORCEMENT ACTIVITIES | 67

it would need a RPT in which to do so. The United States, the EU, Japan, and China agreed that China

would have until May 2, 2015, to comply with the recommendations and rulings.

China announced that it had eliminated its export quotas on the products at issue in this dispute as of January

1, 2015, and its export duties as of May 1, 2015.

However, at present, China maintains export licensing requirements for these products. Accordingly, the

United States continues to monitor actions by China that might operate to restrict exports of the materials

at issue in this dispute.

China – Measures Related to Demonstration Bases and Common Service Platform Programs (DS489)

On February 11, 2015, the United States requested consultations regarding China’s “Demonstration Bases-

Common Service Platform” export subsidy program. Under this program, China appears to provide

prohibited export subsidies through “Common Service Platforms” to manufacturers and producers across

seven economic sectors and dozens of sub-sectors located in more than 150 industrial clusters, known as

“Demonstration Bases.”

Pursuant to this Demonstration Bases-Common Service Platform program, China provides free and

discounted services as well as cash grants and other incentives to enterprises that meet export performance

criteria and are located in 179 Demonstration Bases throughout China. Each of these Demonstration Bases

is comprised of enterprises from one of seven sectors: (1) textiles, apparel, and footwear; (2) advanced

materials and metals (including specialty steel, titanium, and aluminum products); (3) light industry; (4)

specialty chemicals; (5) medical products; (6) hardware and building materials; and, (7) agriculture. China

maintains and operates this extensive program through over 150 central government and sub-central

government measures throughout China.

The United States held consultations with China on March 13, April 1, and April 2, 2015. At the request

of the United States, on April 22, 2015, the WTO established a panel to examine the U.S. complaint. The

United States and China held additional consultations following the establishment of the Panel and reached

agreement in April 2016 on an MOU. Pursuant to the MOU, China agreed to terminate the export subsidies

it had provided through the Demonstration Bases-Common Service Platform program. The United States

continues to monitor China’s actions with respect to its compliance with the terms of the MOU.

China – Export Duties on Certain Raw Materials (DS508)

On July 13 and July 19, 2016, the United States requested consultations with China regarding China’s

restraints on the exportation of antimony, chromium, cobalt, copper, graphite, indium, lead, magnesia, talc,

tantalum, and tin. These materials are critical to the production of downstream products made in the United

States in industries including aerospace, automotive, construction, electronics, and steel.

The United States challenged China’s export restraints on these materials as inconsistent with several WTO

provisions, including provisions in the GATT 1994, as well as specific commitments made by China in its

WTO accession agreement. The export restraints include export quotas, export duties, and additional

requirements that impose restrictions on the trading rights of enterprises seeking to export various forms of

the materials, such as prior export performance requirements.

The United States, together with the EU, held consultations with China on September 8 and September 9,

2016. Consultations did not resolve the dispute.

68 | II. TRADE ENFORCEMENT ACTIVITIES

At the request of the United States, the WTO established a panel on November 8, 2016. In light of Chinese

actions to cease to apply the export duties and quotas in 2017, the United States is continuing to monitor

China’s actions.

China – Domestic Support for Agricultural Producers (DS511)

On September 13, 2016, the United States requested consultations with China concerning China’s provision

of domestic support in favor of agricultural producers, in particular, to those producing wheat, Indica rice,

Japonica rice, and corn. It appears that China’s level of domestic support is in excess of its commitment

level of nil specified in Section I of Part IV of China’s Schedule CLII because, for example, China provides

domestic support in excess of its product-specific de minimis level of 8.5 percent for each of wheat, Indica

rice, Japonica rice, and corn.

China’s level of domestic support appears to be inconsistent with Articles 3.2, 6.3, and 7.2(b) of the

Agriculture Agreement. The parties consulted on this matter on October 20, 2016, but the consultations

did not resolve the dispute.

At the request of the United States, the WTO established a panel on January 25, 2017, to examine the U.S.

complaint. Australia, Brazil, Canada, Colombia, Ecuador, Egypt, El Salvador, the EU, Guatemala, India,

Indonesia, Israel, Japan, Kazakhstan, Korea, Norway, Pakistan, Paraguay, Philippines, Russia, Saudi

Arabia, Singapore, Chinese Taipei, Thailand, Turkey, Ukraine, and Vietnam reserved their rights to

participate in panel proceedings as third parties. On June 24, 2017, the parties agreed to compose the Panel

as follows: Mr. Gudmundur Helgason, Chair; and, Mr. Juan Antonio Dorantes Sánchez and Ms. Elaine

Feldman, Members.

On February 28, 2019, the Panel circulated its report. The Panel found that China had breached Articles

3.2 and 6.3 of the Agriculture Agreement by exceeding, in each year from 2012 to 2015, its de minimis

level of support for wheat, Indica rice, and Japonica rice. The DSB adopted the Panel report on April 26,

2019. The United States and China agreed that the RPT for China to come into compliance with WTO

rules would end March 31, 2020.

On July 16, 2020, the United States requested authorization to suspend the application to China of tariff

concessions and other obligations at an estimated level of $1.3 billion for 2020 pursuant to Article 22.2 of

the Dispute Settlement Understanding (DSU). On July 27, 2020, China objected to the U.S. request,

automatically referring the matter to arbitration. On August 5, 2020, China requested the establishment of

a compliance panel pursuant to Article 21.5 of the DSU, and at its meeting on September 28, 2020, the DSB

established a compliance panel.

China – Administration of Tariff-Rate Quotas for Certain Agricultural Products (DS517)

On December 15, 2016, the United States requested consultations with China regarding the administration

of TRQs for certain agricultural products, namely, wheat, corn, and rice.

The measures identified in the request establish a system by which the National Development and Reform

Commission (NDRC) annually allocates quota to eligible enterprises, and reallocates quota returned

unused, based on eligibility requirements and allocation principles that are not clearly specified. The TRQs

for these commodities have under filled, even in years where market conditions would suggest demand for

imports. China’s administration of these TRQs inhibits the filling of the TRQs, restricting opportunities

for U.S. and other trading partners to export wheat, corn, and rice to China.

II. TRADE ENFORCEMENT ACTIVITIES | 69

On February 9, 2017, the United States and China held consultations in Geneva. The EU, Canada,

Australia, and Thailand requested to join the consultations, but China denied the third parties’ requests.

The consultations failed to resolve the U.S. concerns, and at the request of the United States, the WTO

established a panel on September 22, 2017. Australia, Brazil, Canada, Ecuador, the EU, Guatemala, India,

Indonesia, Japan, Kazakhstan, Korea, Norway, Russia, Singapore, Chinese Taipei, Ukraine and Vietnam

reserved third party rights. The Panel was composed on February 22, 2018, as follows: Mr. Mateo Diego-

Fernandez, Chair; and, Mr. Stefan H. Johannesson and Mr. Esteban B. Conejos, Jr., Members.

The Panel circulated its report on April 18, 2019. The Panel found that with respect to the United States’

claims under Paragraph 116 of China’s Working Party Report:

 The basic eligibility criteria used in China’s administration of its TRQs for wheat, rice, and corn

are inconsistent with the obligations to administer TRQs on a transparent, predictable, and fair

basis, and to administer TRQs using clearly specified requirements.

 The allocation principles used in China’s administration of its wheat, rice, and corn TRQs are

inconsistent with the obligations to administer TRQs on a transparent, predictable, and fair basis,

and to administer TRQs using clearly specified administrative procedures.

 The reallocation procedures used in China’s administration of its wheat, rice, and corn TRQs are

inconsistent with the obligation to administer TRQs using clearly specified administrative

procedures.

 The public comment process used in China’s administration of its wheat, rice, and corn TRQs is

inconsistent with the obligations to administer TRQs on a transparent, predictable, and fair basis,

and to administer TRQs using clearly specified administrative procedures.

 The administration of STE and non-STE portions of China’s wheat, rice, and corn TRQs is

inconsistent with the obligations to administer TRQs on a transparent, predictable, and fair basis,

to administer TRQs using clearly specified administrative procedures, and to administer TRQs in

a manner that would not inhibit the filling of each TRQ.

 The usage requirements for imported wheat and corn used in China’s administration of its TRQ for

wheat and corn are inconsistent with the obligations to administer TRQs on a predictable basis, to

administer TRQs using clearly specified administrative procedures, and to administer TRQs in a

manner that would not inhibit the filling of each TRQ.

The Panel also found that China’s administration of its wheat, rice, and corn TRQs is, as a whole,

inconsistent with the obligations to administer TRQs on a transparent, predictable, and fair basis, to

administer TRQs using clearly specified requirements and administrative procedures, and to administer

TRQs in a manner that would not inhibit the filling of each TRQ.

The DSB adopted the Panel report on May 28, 2019. The United States and China agreed that the

reasonable period of time for China to come into compliance with WTO rules would end on June 29, 2021.

On July 15, 2021, the United States requested authorization to suspend the application to China of tariff

concessions and other obligations pursuant to Article 22.2 of the DSU. China objected to the U.S. request,

automatically referring the matter to arbitration. On July 15, 2021, China requested the establishment of a

70 | II. TRADE ENFORCEMENT ACTIVITIES

compliance panel pursuant to Article 21.5 of the DSU, and at its meeting on August 30, 2021, the DSB

established a compliance panel.

China – Additional Duties on Certain Products from the United States (DS558)

On July 16, 2018, the United States requested consultations with China with respect to its imposition of

additional duties on certain products originating in the United States. China imposed the additional duties

in retaliation for the action the President took under Section 232 of the Trade Expansion Act of 1962, as

amended, on imports of steel and aluminum products that threaten to impair U.S. national security. The

U.S. consultations request alleges that the additional duties contravene China’s obligations under the WTO

Agreement because they: (1) fail to extend to U.S. products an advantage, favor, privilege or immunity

granted by China to products originating in the territory of other WTO Members; (2) accord less favorable

treatment to products originating in the United States; and, (3) impose duties in excess of those set forth in

China’s schedule.

The United States held consultations with China on August 29, 2018, but these consultations did not resolve

the dispute. At the request of the United States, the WTO established a panel on November 21, 2018, to

examine the U.S. complaint. On January 25, 2019, the Director-General composed the Panel as follows:

Mr. William Ehlers, Chair; and, Mr. Cristian Espinosa Cañizares and Ms. Mónica Rolong, Members. As

of December 2022, panel proceedings were ongoing.

European Union – Measures concerning meat and meat products (hormones) (DS26, 48)

The United States and Canada challenged the EU ban on imports of meat from animals to which any of six

hormones for growth promotional purposes had been administered. The Panel found that the EU ban is

inconsistent with the EU’s obligations under the Agreement on the Application of Sanitary and

Phytosanitary Measures (SPS Agreement), and that the ban is not based on science, a risk assessment, or

relevant international standards.

Upon appeal, the Appellate Body affirmed the Panel’s findings that the EU ban fails to satisfy the

requirements of the SPS Agreement. The Appellate Body also found that, while a country has broad

discretion in electing what level of protection it wishes to implement, in doing so it must fulfill the

requirements of the SPS Agreement. The Appellate Body concluded that in this case, the ban imposed is

not rationally related to the conclusions of the risk assessments the EU had performed.

Because the EU did not comply with the recommendations and rulings of the DSB by May 13, 1999, the

final date of its compliance period as set by arbitration, the United States sought WTO authorization to

suspend concessions with respect to certain products of the EU in an amount equal to the value of the

estimated annual harm to U.S. exports resulting from the EU’s failure to lift its ban on imports of U.S. meat.

The EU exercised its right to request arbitration concerning the amount of the suspension. On July 12,

1999, the arbitrators determined the level of suspension to be $116.8 million. On July 26, 1999, the DSB

authorized the United States to suspend such concessions and the United States proceeded to impose 100

percent ad valorem duties on a list of EU products with an annual trade value of $116.8 million.

On November 3, 2003, the EU notified the WTO that it had amended its hormones ban. On November 8,

2004, the EU requested consultations with respect to “the United States continued suspension of

concessions and other obligations under the covered agreements” in the EU-Hormones dispute. The

Appellate Body issued its report in the U.S. – Continued Suspension (WT/DS320) dispute on October 16,

2008.

II. TRADE ENFORCEMENT ACTIVITIES | 71

On October 31, 2008, USTR announced that it was considering changes to the list of EU products on which

100 percent ad valorem duties had been imposed in 1999. A modified list of EU products was announced

by USTR on January 15, 2009.

On December 22, 2008, the EU requested consultations with the United States and Canada pursuant to

Articles 4 and 21.5 of the DSU, regarding the EU’s implementation of the DSB’s recommendations and

rulings in the EU–Hormones dispute. In its consultations request, the EU stated that it considered that it

has brought into compliance the measures found inconsistent in EU–Hormones by, among other things,

adopting its revised ban in 2003. Consultations took place in February 2009.

Pursuant to an MOU between the United States and the EU, further litigation in the EU-Hormones

compliance proceeding has been suspended.

In 2016, industry representatives requested that the United States reinstate suspension of concessions, as

authorized by the DSB. USTR accordingly initiated proceedings under Section 306 of the Trade Act. In

2019, the United States and the EU concluded successful negotiations to resolve concerns with the operation

of the TRQ established by the MOU. On August 2, 2019 the United States and the EU signed the Agreement

on the Allocation to the United States of a Share in the Tariff Rate Quota for High Quality Beef Referred

to in the Revised MOU Regarding the Importation of Beef from Animals Not Treated with Certain Growth-

promoting Hormones and Increased Duties Applied by the United States to Certain Products of the

European Union. On December 13, 2019, USTR published notice of its determination not to reinstate

action in connection with the EU’s measures concerning meat and meat products in the Federal Register.

For further discussion of the U.S. suspension of concessions and the MOU, see Chapter II.B Section 301.

European Union – Measures affecting the approval and marketing of biotechnology products (DS291)

Since the late 1990s, the EU has pursued policies that undermine the commercialization and trade of

agricultural biotechnology products. After approving a number of agricultural biotechnology products

through October 1998, the EU adopted an across-the-board moratorium under which no further

biotechnology applications were allowed to reach final approval. In addition, six Member States (Austria,

France, Germany, Greece, Italy, and Luxemburg) adopted unjustified bans on certain biotechnology crops

that had been approved by the EU prior to the adoption of the moratorium. These measures have caused a

growing portion of U.S. agricultural exports to be excluded from EU markets and unfairly cast concerns

about biotechnology products around the world, particularly in developing countries.

On May 13, 2003, the United States filed a consultation request with respect to: (1) the EU’s moratorium

on all new biotechnology approvals; (2) delays in the processing of specific biotech product applications;

and, (3) the product-specific bans adopted by six EU Member States (Austria, France, Germany, Greece,

Italy, and Luxembourg). The United States requested the establishment of a panel on August 7, 2003.

Argentina and Canada submitted similar consultation and panel requests. On August 29, 2003, the DSB

established a panel to consider the claims of the United States, Argentina, and Canada. On March 4, 2003,

the Director-General composed the Panel as follows: Mr. Christian Häberli, Chair; and Mr. Mohan Kumar

and Mr. Akio Shimizu, Members.

72 | II. TRADE ENFORCEMENT ACTIVITIES

The Panel issued its report on September 29, 2006. The Panel agreed with the United States, Argentina,

and Canada that the disputed measures of the EU, Austria, France, Germany, Greece, Italy, and

Luxembourg are inconsistent with the obligations set out in the SPS Agreement. In particular:

 The Panel found that the EU adopted a de facto, across-the-board moratorium on the final approval

of biotechnological products, starting in 1999 up through the time the Panel was established in

August 2003.

 The Panel found that the EU had presented no scientific or regulatory justification for the

moratorium, and thus that the moratorium resulted in “undue delays” in violation of the EU’s

obligations under the SPS Agreement.

 The Panel identified specific, WTO inconsistent “undue delays” with regard to 24 of the 27 pending

product applications that were listed in the U.S. panel request.

 The Panel upheld the United States’ claims that, in light of positive safety assessments issued by

the EU’s own scientists, the bans adopted by six EU Member States on products approved in the

EU prior to the moratorium were not supported by scientific evidence, and were thus inconsistent

with WTO rules.

The DSB adopted the Panel report on November 21, 2006. At the meeting of the DSB held on December

19, 2006, the EU notified the DSB that the EU intended to implement the recommendations and rulings of

the DSB in these disputes, and stated that it would need a RPT for implementation. On June 21, 2006, the

United States, Argentina, and Canada notified the DSB that they had agreed with the EU on a one-year

period of time for implementation, to end on November 21, 2007. On November 21, 2007, the United

States, Argentina, and Canada notified the DSB that they had agreed with the EU to extend the

implementation period to January 11, 2008.

On January 17, 2008, the United States submitted a request for authorization to suspend concessions and

other obligations with respect to the EU under the covered agreements at an annual level equivalent to the

annual level of nullification or impairment of benefits accruing to the United States resulting from the EU’s

failure to bring measures concerning the approval and marketing of biotechnology products into compliance

with the recommendations and rulings of the DSB. On February 6, 2008, the EU objected under Article

22.6 of the DSU, claiming that the level of suspension proposed by the United States was not equivalent to

the level of nullification or impairment, referring the matter to arbitration. The United States and the EU

mutually agreed to suspend the Article 22.6 arbitration proceedings on February 18, 2008.

Subsequent to the suspension of the Article 22.6 proceeding, the United States continues monitoring EU

developments and has been engaging with the EU in discussions with the goal of normalizing trade in

biotechnology products.

European Communities and certain Member States – Measures affecting trade in large civil aircraft

(DS316)

On October 6, 2004, the United States requested consultations with the EU, as well as with Germany,

France, the UK, and Spain, with respect to subsidies provided to Airbus, a manufacturer of large civil

aircraft. The United States alleged that such subsidies violated various provisions of the Agreement on

Subsidies and Countervailing Measures (SCM Agreement), as well as Article XVI:1 of the GATT 1994.

Consultations were held on November 4, 2004. On January 11, 2005, the United States and the EU agreed

to a framework for the negotiation of a new agreement to end subsidies for large civil aircraft. The parties

II. TRADE ENFORCEMENT ACTIVITIES | 73

set a three-month time frame for the negotiations and agreed that, during negotiations, they would not

request panel proceedings.

The United States and the EU were unable to reach an agreement within the 90-day time frame. Therefore,

the United States filed a request for a panel on May 31, 2005. The Panel was established on July 20, 2005.

The U.S. request challenged several types of EU subsidies that appear to be prohibited, actionable, or both.

On October 17, 2005, the Deputy Director-General composed the Panel as follows: Mr. Carlos Pérez del

Castillo, Chair; and, Mr. John Adank and Mr. Thinus Jacobsz, Members. The Panel met with the parties

on March 20 and March 21, 2007, and on July 25 and July 26, 2007, and met with the parties and third

parties on July 24, 2007. The Panel granted the parties’ request to hold part of its meetings with the parties

in public session. This portion of the Panel’s meetings was videotaped and reviewed by the parties to ensure

that business confidential information had not been disclosed before being shown in public on March 22

and July 27, 2007.

The Panel issued its report on June 30, 2010. It agreed with the United States that the disputed measures

of the EU, France, Germany, Spain, and the UK were inconsistent with the SCM Agreement. In particular:

 Every instance of “launch aid” provided to Airbus was a subsidy because in each case, the terms

charged for this unique low interest, success-dependent financing were more favorable than were

available in the market.

 Some of the launch aid provided for the A380, Airbus’s newest and largest aircraft, was contingent

on exports and, therefore, a prohibited subsidy.

 Several instances in which German and French government entities created infrastructure for

Airbus were subsidies because the infrastructure was not general, and the price charged to Airbus

for use resulted in less than adequate remuneration to the government.

 Several government equity infusions into the Airbus companies were subsidies because they were

on more favorable terms than available in the market.

 Several EU and Member State research programs provided grants to Airbus to develop technologies

used in its aircraft.

 These subsidies caused adverse effects to the interests of the United States in the form of lost sales,

displacement of U.S. imports into the EU market, and displacement of U.S. exports into the markets

of Australia, Brazil, China, Korea, Mexico, Singapore, and Chinese Taipei.

The EU filed a notice of appeal on July 21, 2010. The WTO Appellate Body conducted an initial hearing

on August 3, 2010 to discuss procedural issues related to the need to protect business confidential

information and highly sensitive business information and issued additional working procedures to that end

on August 10, 2010. The Appellate Body held two hearings on the issues raised in the EU’s appeal of the

Panel’s findings of WTO inconsistent subsidization of Airbus. The first hearing, held November 11 to

November 17, 2010, addressed issues associated with the main subsidy to Airbus, launch aid, and the other

subsidies challenged by the United States. The second hearing held December 9 to December 14, 2010,

focused on the Panel’s findings that the European subsidies caused serious prejudice to the interests of the

United States in the form of lost sales and declining market share in the EU and other third country markets.

On May 18, 2011, the Appellate Body issued its report. The Appellate Body affirmed the Panel’s central

findings that European government launch aid had been used to support the creation of every model of large

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civil aircraft produced by Airbus. The Appellate Body also confirmed that launch aid and other challenged

subsidies to Airbus have directly resulted in Boeing losing sales involving purchases of Airbus aircraft by

EasyJet, Air Berlin, Czech Airlines, Air Asia, Iberia, South African Airways, Thai Airways International,

Singapore Airlines, Emirates Airlines, and Qantas, as well as lost market share, with Airbus gaining market

share in the EU and in third country markets, including China and Korea, at the expense of Boeing. The

Appellate Body also found that the Panel applied the wrong standard for evaluating whether subsidies are

export subsidies, and that the Panel record did not have enough information to allow application of the

correct standard.

On December 1, 2011, the EU provided a notification in which it claimed to have complied with the DSB

recommendations and rulings. On December 9, 2011, the United States requested consultations regarding

the notification and also requested authorization from the DSB to impose countermeasures. The United

States and the EU held consultations on January 13, 2012. On December 22, 2011, the EU objected to the

level of suspension of concessions requested by the United States, and the matter was referred to arbitration

pursuant to Article 22.6 of the DSU. On January 19, 2012, the United States and the EU requested that the

arbitration be suspended pending the conclusion of the compliance proceeding.

On March 30, 2012, in light of the Parties’ disagreement over whether the EU had complied with the DSB’s

recommendations and rulings, the United States requested that the DSB refer the matter to the original Panel

pursuant to Article 21.5 of the DSU. The DSB did so at a meeting held on April 13, 2012. On April 25,

2012, the compliance Panel was composed with the members of the original Panel: Mr. Carlos Pérez del

Castillo, Chair; and, Mr. John Adank and Mr. Thinus Jacobsz, Members.

On September 22, 2016, the report of the Article 21.5 Panel was circulated to the Members. The Panel

found that the EU breached Articles 5(c) and 6.3(a), (b), and (c) of the SCM Agreement, and that the EU

and certain Member States failed to comply with the DSB recommendations under Article 7.8 of the SCM

Agreement to “take appropriate steps to remove the adverse effects or … withdraw the subsidy.”

Significant findings by the compliance Panel against the EU include:

 34 out of 36 alleged compliance “steps” notified by the EU did not amount to “actions” with respect

to the subsidies provided to the Airbus or the adverse effects that those subsidies were to have

caused in the original proceeding.

 As a result, the EU failed to withdraw the subsidies, as recommended by the DSB.

 Those subsidies were a genuine and substantial cause of lost sales to U.S. aircraft, and displacement

and impedance of exports of U.S. aircraft to Australia, China, India, Korea, Singapore, and the

United Arab Emirates.

On October 13, 2016, the EU notified the DSB of its decision to appeal certain issues of law and legal

interpretations developed by the compliance panel. The Division hearing the appeal was composed of

Ricardo Ramirez-Hernandez as Presiding Member, and Peter van den Bossche and Ujal Singh Bhatia.

On May 15, 2018, the Appellate Body issued its report. The Appellate Body confirmed that the EU and

certain Member States failed to comply with the earlier WTO determination finding launch aid inconsistent

with their WTO obligations. The Appellate Body further confirmed that almost $5 billion in new launch

aid for the A350 XWB was WTO-inconsistent. The Appellate Body found that the WTO-inconsistent

subsidies continue to cause significant lost sales of Boeing aircraft in the twin-aisle and very large aircraft

markets, and that these subsidies impede exports of Boeing 747 aircraft to numerous geographic markets.

The Appellate Body also found that, due to the passage of time, the EU no longer needed to take action

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regarding some of the earlier (i.e., pre-A380) launch aid subsidies previously found to be WTO-

inconsistent.

On July 13, 2018, at the request of the United States, the arbitration regarding the level of countermeasures

(suspended in January 2012) was resumed. On October 2, 2019, the Arbitrator issued its decision that the

level of countermeasures commensurate with the degree and nature of the adverse effects determined to

exist is up to $7.50 billion annually. On October 14, 2019, the WTO accordingly authorized the United

States to take countermeasures consistent with the award of the Arbitrator. The United States imposed

tariffs on certain imports from the involved EU member states pursuant to Section 301 of the Trade Act.

On May 17, 2018, the EU represented to the DSB that it had taken new steps to achieve compliance with

its WTO obligations. However, following consultations, the United States did not agree that the EU had

achieved compliance. At the request of the EU, the WTO established a second compliance panel on August

27, 2018.

On December 2, 2019, the second compliance Panel issued its report. The Panel found that the EU

continued to be in breach of Articles 5(c) and 6.3(a), (b), and (c) of the SCM Agreement, and that the EU

and certain Member States had accordingly failed to comply with the DSB recommendations under Article

7.8 of the SCM Agreement to “take appropriate steps to remove the adverse effects or … withdraw the

subsidy.” The Panel agreed with the United States that none of the measures taken by the four EU Member

States amounted to a withdrawal of the launch aid for the A350XWB and A380. The Panel also found that

that launch aid for the A380 and A350XWB continued to be a genuine and substantial cause of lost sales

to U.S. aircraft, and impedance of exports of U.S. aircraft to China, India, Korea, Singapore, and the United

Arab Emirates.

On December 6, 2019, the EU notified the DSB of its decision to appeal certain findings of the compliance

Panel.

On June 15 and June 17, 2021, the United States reached understandings on cooperative frameworks with

the EU and the UK, respectively, on the parallel aircraft disputes (DS316 and DS353). In accordance with

the understandings, each side intends not to impose any WTO-authorized countermeasures for a period of

five years starting from July 4, 2021. Each side also intends to provide any financing to its large civil

aircraft producer (LCA producer) for the production or development of large civil aircraft on market terms.

Additionally, each side intends to provide any funding for research and development (R&D) for large civil

aircraft to its LCA producer through an open and transparent process while making the results of fully

government funded R&D widely available. A working group is also established under each framework to

analyze and overcome any disagreements in the sector, including on any existing support measures. The

working group will also collaborate on jointly analyzing and addressing non-market practices of third

parties that may harm their respective large civil aircraft industries.

For further discussion of the U.S. countermeasures, see Chapter II.B Section 301.

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European Union – Additional Duties on Certain Products from the United States (DS559)

On July 16, 2018, the United States requested consultations with the EU with respect to its imposition of

additional duties on certain products originating in the United States. The EU imposed the additional duties

in retaliation for the action the President took under Section 232 of the Trade Expansion Act of 1962, as

amended, on imports of steel and aluminum products that threaten to impair U.S. national security. The

U.S. consultations request alleges that the additional duties contravene the EU’s obligations under the WTO

Agreement because they: (1) fail to extend to U.S. products an advantage, favor, privilege or immunity

granted by the EU to products originating in the territory of other WTO Members; (2) accord less favorable

treatment to products originating in the United States; and, (3) impose duties in excess of those set forth in

the EU’s schedule.

The United States held consultations with the EU on August 28, 2018, but these consultations did not

resolve the dispute. At the request of the United States, the WTO established a panel on November 21,

2018, to examine the U.S. complaint. On January 25, 2019, the Director-General composed the Panel as

follows: Mr. William Ehlers, Chair; and, Ms. Olga Lucía Lozano Ferro and Mr. Anwar Zaheer Jamali,

Members.

In November 2021, the United States and EU announced arrangements on steel and aluminum cooperation,

and the EU announced that it would suspend its additional duties. The United States requested that the

Panel suspend its work. The EU informed the Panel that it did not object to that request, and the Panel

granted it. Pursuant to that agreement, the United States and the EU mutually agreed to resort to arbitration

regarding the matter pending before the Panel in this dispute. Upon composition of the Arbitrator, the

arbitration was immediately and indefinitely suspended and the dispute before this Panel was terminated.

On January 17, 2022, the United States and the European Union notified the DSB that they were terminating

this dispute before the panel in light of the agreed procedures for arbitration under Article 25 of the DSU.

On January 20, 2022, the Chair of the panel informed the DSB that it had ceased all work in these

proceedings.

On January 17, 2022, the United States and the European Union notified the DSB that they had agreed,

pursuant to Article 25.2 of the DSU, to resort to arbitration on the matter pending before the panel in this

dispute. The arbitrator was composed on January 20, 2022 with the same persons who served as members

of the Panel. As provided in the Parties' communication of January 17, 2022, the arbitration was suspended.

India – Measures Concerning the Importation of Certain Agricultural Products from the United States

(DS430)

On March 6, 2012, the United States requested consultations with India regarding its import prohibitions

on various agricultural products from the United States. India asserts these import prohibitions are

necessary to prevent the entry of avian influenza into India. However, the United States has not had an

outbreak of highly pathogenic avian influenza since 2004. With respect to low pathogenic avian influenza,

the only kind of avian influenza found in the United States since 2004, international standards do not support

the imposition of import prohibitions, including the type maintained by India. The United States considers

that India’s restrictions are inconsistent with numerous provisions of the SPS Agreement, including Articles

2.2, 2.3, 3.1, 5.1, 5.2, 5.5, 5.6, 5.7, 6.1, 6.2, 7, Annex B, and Articles I and XI of GATT 1994.

The United States and India held consultations on April 16 and 17, 2012, but were unable to resolve the

dispute. At the request of the United States, the WTO established a panel to examine the U.S. complaint

on June 25, 2012. On February 18, 2014, the Director-General composed the Panel as follows: Mr. Stuart

Harbinson, Chair; and, Ms. Delilah Cabb and Mr. Didrik Tønseth, Members.

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The Panel issued its report on October 14, 2014. In its report, the Panel found in favor of the United States.

Specifically, the Panel found that India’s restrictions breach its WTO obligations because they: (1) are not

based on international standards or a risk assessment that takes into account available scientific evidence;

(2) arbitrarily discriminate against U.S. products because India blocks imports while not similarly blocking

domestic products; (3) constitute a disguised restriction on international trade; (4) are more trade restrictive

than necessary since India could reasonably adopt international standards for the control of avian influenza

instead of imposing an import ban; (5) fail to recognize the concept of disease free areas and are not adapted

to the characteristics of the areas from which products originate and to which they are destined; and, (6)

were not properly notified in a manner that would allow the United States and other WTO Members to

comment on India’s restrictions before they went into effect. India filed its notice of appeal on January 26,

2015.

On June 4, 2015, the Appellate Body issued its report in this dispute, upholding the Panel’s findings that

India’s restrictions: (1) are not based on international standards or a risk assessment that takes into account

available scientific evidence; (2) arbitrarily discriminate against U.S. products because India blocks imports

while not similarly blocking domestic products; (3) are more trade restrictive than necessary since India

could reasonably adopt international standards for the control of avian influenza instead of imposing an

import ban; and, (4) fail to recognize the concept of disease-free areas and are not adapted to the

characteristics of the areas from which products originate and to which they are destined.

On July 13, 2015, India informed the DSB that it intended to implement the DSB’s recommendations and

rulings and would need a RPT to do so. On December 8, 2015, the United States and India agreed that the

RPT would be 12 months, ending on June 19, 2016.

On July 7, 2016, the United States requested the authorization of the DSB to suspend concessions or other

obligations pursuant to Article 22.2 of the DSU. India objected to the request, referring the matter to

arbitration. The arbitrator was composed with the members of the original Panel. As of December 2022,

the arbitration proceedings were ongoing.

On April 6, 2017, India requested the establishment of a compliance panel. India asserted that it had enacted

a revised avian influenza measure that complied with India’s WTO obligations. The compliance Panel was

composed by the original panelists. As of December 2022, the compliance Panel proceeds were ongoing.

From 2018 through 2022, the United States and India on several occasions postponed both the release of

the Arbitrator’s decision on the level of suspension of concessions and the remaining steps in the

compliance Panel proceeding while the two sides discuss potential resolution of the dispute. In March

2018, the United States and India agreed to veterinary export certificates for the shipment to India of U.S.

poultry and poultry products.

India – Solar Local Content I / II (DS456)

In February 2013, the United States requested WTO consultations with India concerning domestic content

requirements for participation in an Indian solar power generation program known as the National Solar

Mission (NSM). Under Phase I of the NSM, which India initiated in 2010, India provided guaranteed long-

term payments to solar power developers contingent on the purchase and use of solar cells and solar

modules of domestic origin. India continued to impose domestic content requirements for solar cells and

modules under Phase II of the NSM, which India launched in October 2013. In March 2014, the United

States held consultations with India on Phase II of the NSM. In April 2014, after two rounds of unsuccessful

consultations with India, the United States requested that the WTO DSB establish a dispute settlement

panel. In May 2014, the DSB established a WTO panel to examine India’s domestic content requirements

under its NSM program. On September 24, 2014, the Parties agreed to compose the Panel as follows: Mr.

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David Walker, Chair; and, Mr. Pornchai Danvivathana and Mr. Marco Tulio Molina Tejeda, Members. The

Panel held meetings with the Parties on February 3 and February 4, 2015, and on April 28 and April 29,

2015.

The Panel issued its final public report on February 24, 2016, finding in favor of the United States on all

claims. The Panel found that India’s domestic content requirements under its NSM are inconsistent with

India’s national treatment obligations under Article III:4 of the GATT 1994, and Article 2.1 of the

Agreement on Trade-related Investment Measures (TRIMS Agreement). Because an Indian solar power

developer may bid for and maintain certain power generation contracts only by using domestically produced

equipment, and not by using imported equipment, India’s requirements accord “less favorable” treatment

to imported solar cells and modules than that accorded to like products of Indian origin. India appealed this

decision to the WTO Appellate Body on April 20, 2016. The Appellate Body issued its report on September

16, 2016. The Appellate Body affirmed the Panel’s finding that India’s domestic content requirements

(DCR measures) under its NSM are inconsistent with India’s national treatment obligations under Article

III:4 of the GATT 1994 and Article 2.1 of the TRIMS Agreement. The Appellate Body also affirmed that

Panel’s rejection of India’s defensive claims under Articles III:8(a), XX(j) and XX(d) of the GATT 1994.

The DSB adopted the Panel and Appellate Body reports during a special meeting of the DSB on October

14, 2016. At that meeting, India informed the DSB that India intended to implement the DSB’s

recommendations and rulings in a manner that respects its WTO obligations, and that it would need an RPT

to do so. India and the United States agreed that India would complete implementation of the DSB

recommendations and rulings by December 14, 2017.

On December 14, 2017, India submitted a status report to DSB indicating that India had implemented the

rulings and recommendations of the DSB. On December 19, 2017 the United States requested authorization

from the DSB to suspend trade concessions under Article 22.2 of the DSU on grounds that India had not,

in fact, brought its measures into conformity with WTO rules. India objected to the United States’ request

on January 3, 2018, referring the matter to arbitration.

On January 23, 2018, India requested the establishment of a compliance panel under Article 21.5 of the

DSU to determine whether the measures that India has purportedly taken to comply with the

recommendations and rulings of the DSB are consistent with WTO rules. At its meeting on February 28,

2018, the DSB agreed to establish a compliance panel.

India – Export Related Measures (DS541)

On March 14, 2018, the United States requested consultations with India concerning certain Indian

measures relating to export subsidy programs including: (1) the Export Oriented Units Scheme and sector

specific schemes, including Electronics Hardware Technology Parks Scheme; (2) the Merchandise Exports

from India Scheme; (3) the Export Promotion Capital Goods Scheme; (4) Special Economic Zones; and,

(5) a duty-free imports for exporters program. The United States alleges that these programs are

inconsistent with Articles 3.1(a) and 3.2 of the SCM Agreement because they provide prohibited subsidies

contingent upon export performance. Consultations were held on April 11, 2018, but failed to resolve the

dispute.

On May 17, 2018, the United States requested the establishment of a panel to examine the complaint. On

July 16, 2018, the United States requested the Director-General to determine the composition of the Panel,

and on July 23, 2018, the Director-General composed the Panel as follows: Mr. Jose Antonio S.

Buencamino, Chair; and, Ms. Leora Blumberg and Mr. Serge Pannatier, Members.

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On October 31, 2019, the Panel issued its report. The Panel found all of the challenged export subsidy

programs inconsistent with Articles 3.1(a) and 3.2 of the SCM Agreement. The Panel rejected India’s two

principal defenses of its programs. First, the Panel disagreed with India’s argument that India continued to

have an exemption, based on a certain developing country status designation, to provide subsidies

contingent upon export performance. Second, the Panel rejected India’s defense that the export subsidy

programs qualified as “duty-drawback” schemes. With respect to certain product lines under the duty-free

imports for exporters program, the Panel found language for those lines limited the import duty exemption

at issue to products used in the manufacture/processing of final products for export. Those product lines

were exempted and were not deemed to be subsidies. However, the remaining product lines did not qualify

for duty-drawback protection and were found to be subsidies.

On November 19, 2019, India notified the DSB of its decision to appeal the Panel’s report.

India – Additional Duties on Certain Products from the United States (DS585)

On July 3, 2019, the United States requested consultations with India with respect to its imposition of

additional duties on certain products originating in the United States. India imposed the additional duties

in retaliation for the action the President took under Section 232 of the Trade Expansion Act of 1962, as

amended, on imports of steel and aluminum products that threaten to impair U.S. national security. The

U.S. consultations request alleges that the additional duties contravene India’s obligations under the WTO

Agreement because they: (1) fail to extend to U.S. products an advantage, favor, privilege or immunity

granted by India to products originating in the territory of other WTO Members; (2) accord less favorable

treatment to products originating in the United States; and, (3) impose duties in excess of those set forth in

India’s schedule.

The United States held consultations with India on August 1, 2019, but these consultations did not resolve

the dispute. At the request of the United States, the WTO established a panel on October 28, 2019 to

examine the U.S. complaint. On January 7, 2020, following the agreement of the parties, the Panel was

composed as follows: Mr. Hugo Cayrús, Chair; and, Mr. Anthony Abad and Mr. César Montaño Huerta,

Members. As of December 2022, panel proceedings were ongoing.

Indonesia – Import Restrictions on Horticultural Products, Animals, and Animal Products (DS455,

DS465 and DS478)

On May 8, 2014, the United States, joined by New Zealand, requested consultations with Indonesia

concerning certain measures affecting the importation of horticultural products, animals, and animal

products into Indonesia. The measures on which consultations were requested include Indonesia’s import

licensing regimes for horticultural products and for animals and animal products, as well as certain

prohibitions and restrictions that Indonesia imposes through these regimes.

The United States had previously requested consultations on prior versions of Indonesia’s import licensing

regimes governing the importation of horticultural products and animals and animal products, including the

regime established in 2012. The United States was concerned about these regimes and certain measures

imposed through them and, on January 10, 2013, requested consultations with Indonesia. Indonesia

subsequently amended or replaced its import licensing regulations changing their structure and

requirements. The United States requested consultations again, this time joined by New Zealand, on August

30, 2013. Indonesia again amended its import licensing regimes shortly thereafter, and the consultation

request in the current dispute (DS478) followed.

The United States was concerned that Indonesia, through its import licensing regimes, imposes numerous

prohibitions and restrictions on the importation of covered products, including: (1) prohibiting the

80 | II. TRADE ENFORCEMENT ACTIVITIES

importation of certain products altogether; (2) imposing strict application windows and validity periods for

import permits; (3) restricting the type, quantity, and country of origin of products that may be imported;

(4) requiring that importers actually import a certain percentage of the volume of products allowed under

their permits; (5) restricting the uses for which products may be imported; (6) imposing local content

requirements; (7) restricting imports on a seasonal basis; and, (8) setting a “reference price” below which

products may not be imported. The Indonesian measures at issue appeared to be inconsistent with several

WTO provisions, including Article XI:1 of the GATT 1994 and Article 4.2 of the Agriculture Agreement.

The United States and New Zealand held consultations with Indonesia on June 19, 2014, but these

consultations failed to resolve the dispute. On March 18, 2015, the United States, together with New

Zealand, requested the WTO to establish a dispute settlement panel to examine Indonesia’s import

restrictions. A panel was established on May 20, 2015. The Director-General Composed the Panel as

follows: Mr. Christian Espinoza Cañizares, Chair; and, Mr. Gudmundur Helgason and Ms. Angela Maria

Orozco Gómez, Members. The Panel held meetings with the Parties on February 1 and February 2, 2016,

and on April 13 and April 14, 2016.

The Panel circulated its report on December 22, 2016. The Panel found that all of Indonesia’s import

restricting measures for horticultural products and animal products are inconsistent with Article XI:1 of the

GATT 1994. The Panel also found that Indonesia has failed to demonstrate that the challenged measures

are justified under any general exception available under the GATT 1994. Indonesia appealed the Panel’s

report on February 17, 2017. An appellate report was issued on November 9, 2017, affirming the finding

of the Panel that all of Indonesia’s measures are inconsistent with Article XI:1 of the GATT 1994 and that

Indonesia had not established an affirmative defense with respect to any measure.

The WTO adopted the appellate report and the Panel report on November 22, 2017. A WTO arbitrator set

the reasonable period of time for Indonesia to bring its measures into compliance with WTO rules to expire

on July 22, 2018. On August 2, 2018, the United States requested WTO authorization to suspend

concessions of other obligations pursuant to Article 22.2 of the DSU. On August 14, 2018, Indonesia

objected to the United States’ proposed level of suspension of concessions pursuant to Article 22.6 of the

DSU, referring the matter to arbitration. The United States paused the arbitration on August 20, 2018, to

provide more time for the parties to discuss a resolution to the dispute. Indonesia notified the DSB on

December 18, 2020, that a new law that aims to address one of the inconsistent measures had entered into

force on November 2, 2020. With respect to the other inconsistent measures, Indonesia notified the DSB

that it made “significant adjustments” to its relevant regulations that include the removal of some of the

measures. As of December 31, 2022, Indonesia continued to assert to the DSB that it removed or adjusted

the measures to comply with the DSB rulings and recommendations. The United States continues to

monitor the situation closely.

Russia – Additional Duties on Certain Products from the United States (DS566)

On July 16, 2018, the United States requested consultations with Russia with respect to its imposition of

additional duties on certain products originating in the United States. Russia imposed the additional duties

in retaliation for the action the President took under Section 232 of the Trade Expansion Act of 1962, as

amended, on imports of steel and aluminum products that threaten to impair U.S. national security. The

U.S. consultations request alleged that the additional duties contravene Russia’s obligations under the WTO

Agreement because they: (1) fail to extend to U.S. products an advantage, favor, privilege or immunity

granted by Russia to products originating in the territory of other WTO Members; (2) accord less favorable

treatment to products originating in the United States; and, (3) impose duties in excess of those set forth in

Russia’s schedule.

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The United States held consultations with Russia on August 28, 2018, but these consultations did not

resolve the dispute. At the request of the United States, the WTO established a panel on December 18,

2018 to examine the U.S. complaint. On January 25, 2019, the Director-General composed the Panel as

follows: Mr. William Ehlers, Chair; and, Ms. Petina Gappah and Mr. Syed Tauquir Hussain Shah,

Members. As of December 2022, panel proceedings were ongoing.

Turkey – Additional Duties on Certain Products from the United States (DS561)

On July 16, 2018, the United States requested consultations with Turkey with respect to its imposition of

additional duties on certain products originating in the United States. Turkey imposed the additional duties

in retaliation for the action the President took under Section 232 of the Trade Expansion Act of 1962, as

amended, on imports of steel and aluminum products that threaten to impair U.S. national security. The

U.S. consultations request alleges that the additional duties contravene Turkey’s obligations under the WTO

Agreement because they: (1) fail to extend to U.S. products an advantage, favor, privilege or immunity

granted by Turkey to products originating in the territory of other WTO Members; (2) accord less favorable

treatment to products originating in the United States; and, (3) impose duties in excess of those set forth in

Turkey’s schedule.

The United States held consultations with Turkey on August 29, 2018, as well as supplemental consultations

on November 14, 2018, regarding an amendment to Turkey’s measure imposing the additional duties.

These consultations, however, did not resolve the dispute. At the request of the United States, on January

28, 2019 the WTO established a panel to examine the matter. On February 29, 2019, the Director-General

composed the Panel as follows: Mr. William Ehlers, Chair; and Mr. Johannes Bernabe and Mr. Homero

Larrea, Members. As of December 2022, Panel proceedings were ongoing.

Disputes Brought Against the United States

This section includes summaries of dispute settlement activity for disputes in which the United States was

a responding party (listed by DS number).

United States – Section 110(5) of the Copyright Act (DS160)

As amended in 1998 by the Fairness in Music Licensing Act, section 110(5) of the U.S. Copyright Act

exempts certain retail and restaurant establishments that play radio or television music from paying royalties

to songwriters and music publishers. The EU claimed that, as a result of this exception, the United States

was in violation of its TRIPS obligations. Consultations with the EU took place on March 2, 1999. A panel

on this matter was established on May 26, 1999. On August 6, 1999, the Director-General composed the

Panel as follows: Ms. Carmen Luz Guarda, Chair; and, Mr. Arumugamangalam V. Ganesan and Mr. Ian

F. Sheppard, Members. The Panel issued its final report on June 15, 2000, and found that one of the two

exemptions provided by section 110(5) is inconsistent with the U.S. WTO obligations. The Panel report

was adopted by the DSB on July 27, 2000, and the United States has informed the DSB of its intention to

respect its WTO obligations. On October 23, 2000, the EU requested arbitration to determine the period of

time to be given to the United States to implement the Panel’s recommendation. By mutual agreement of

the parties, Mr. J. Lacarte-Muró was appointed to serve as arbitrator. He determined that the deadline for

implementation should be July 27, 2001. On July 24, 2001, the DSB approved a U.S. proposal to extend

the deadline until the earlier of the end of the then current session of the U.S. Congress or December 31,

2001.

On July 23, 2001, the United States and the EU requested arbitration to determine the level of nullification

or impairment of benefits to the EU as a result of section 110(5)(B). In a decision circulated to WTO

Members on November 9, 2001, the arbitrators determined that the value of the benefits lost to the EU in

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this case was $1.1 million per year. On January 7, 2002, the EU sought authorization from the DSB to

suspend its obligations vis-à-vis the United States. The United States objected to the details of the EU

request, thereby causing the matter to be referred to arbitration.

However, because the United States and the EU had been engaged in discussions to find a mutually

acceptable resolution of the dispute, the arbitrators suspended the proceeding pursuant to a joint request by

the parties filed on February 26, 2002.

On June 23, 2003, the United States and the EU notified the WTO of a mutually satisfactory temporary

arrangement regarding the dispute. Pursuant to this arrangement, the United States made a lump sum

payment of $3.3 million to the EU, to a fund established to finance activities of general interest to music

activities to combat piracy in the digital network. The arrangement covered a three-year period, which

ended on December 21, 2004.

United States – Section 211 Omnibus Appropriations Act (DS176)

Section 211 addresses the ability to register or enforce, without the consent of previous owners, trademarks

or trade names associated with businesses confiscated without compensation by the Cuban government.

The EU questioned the consistency of Section 211 with the TRIPS Agreement and requested consultations

on July 7, 1999. Consultations were held September 13 and December 13, 1999. On June 30, 2000, the

EU requested a panel. A panel was established on September 26, 2000, and at the request of the EU, the

Director-General composed the Panel on October 26, 2000. The Director-General composed the Panel as

follows: Mr. Wade Armstrong, Chair; and, Mr. François Dessemontet and Mr. Armand de Mestral,

Members. The Panel report was circulated on August 6, 2001, rejecting 13 of the EU’s 14 claims and

finding that, in most respects, section 211 is not inconsistent with the obligations of the United States under

the TRIPS Agreement. The EU appealed the decision on October 4, 2001. The Appellate Body issued its

report on January 2, 2002.

The Appellate Body reversed the Panel’s one finding against the United States and upheld the Panel’s

favorable findings that WTO Members are entitled to determine trademark and trade name ownership

criteria. The Appellate Body found certain instances, however, in which section 211 might breach the

national treatment and most favored nation obligations of the TRIPS Agreement. The Panel and Appellate

Body reports were adopted on February 1, 2002, and the United States informed the DSB of its intention to

implement the recommendations and rulings. The RPT for implementation ended on June 30, 2005. On

June 30, 2005, the United States and the EU agreed that the EU would not request authorization to suspend

concessions at that time and that the United States would not object to a future request on grounds of lack

of timeliness.

In January 2016, the United States notified the EU of positive developments that resolved a longstanding

issue of concern to the EU and others, which helped move this dispute into a more cooperative phase.

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United States – Antidumping measures on certain hot-rolled steel products from Japan (DS184)

Japan alleged that the U.S. Department of Commerce (Commerce) and the U.S. International Trade

Commission’s preliminary and final determinations in their antidumping investigations of certain hot-rolled

steel products from Japan issued on November 25 and November 30, 1998, February 12, 1999, April 28,

1999, and June 23, 1999, were erroneous and based on deficient procedures under the U.S. Tariff Act of

1930 and related regulations. Japan claimed that these procedures and regulations violate the GATT 1994,

as well as the Agreement on Implementation of Article VI of the GATT 1994 (Antidumping Agreement)

and the Agreement Establishing the WTO. Consultations were held on January 13, 2000, and a panel was

established on March 20, 2000. In May 2000, the Director-General composed the Panel as follows: Mr.

Harsha V. Singh, Chair; and, Mr. Yanyong Phuangrach and Ms. Lidia di Vico, Members. On February 28,

2001, the Panel circulated its report, in which it rejected most of Japan’s claims, but found that, inter alia,

particular aspects of the antidumping duty calculation, as well as one aspect of the U.S. antidumping duty

law, were inconsistent with the Antidumping Agreement. On April 25, 2001, the United States filed a

notice of appeal on certain issues in the Panel report.

The Appellate Body report was issued on July 24, 2001, reversing in part and affirming in part. The reports

were adopted on August 23, 2001. Pursuant to a February 19, 2002 arbitral award, the United States was

given 15 months, or until November 23, 2002, to implement the DSB’s recommendations and rulings. On

November 22, 2002, Commerce issued a new final determination in the hot-rolled steel antidumping duty

investigation, which implemented the recommendations and rulings of the DSB with respect to the

calculation of antidumping margins in that investigation. The RPT ended on July 31, 2005. With respect

to the outstanding implementation issue, on July 7, 2005, the United States and Japan agreed that Japan

would not request authorization to suspend concessions at that time and that the United States would not

object to a future request on grounds of lack of timeliness.

United States – Continued Dumping and Subsidy Offset Act of 2000 (CDSOA) (DS217/234)

On December 21, 2000, Australia, Brazil, Chile, the EU, India, Indonesia, Japan, South Korea, and Thailand

requested consultations with the United States regarding the Continued Dumping and Subsidy Offset Act

of 2000 (19 U.S.C. § 754) (CDSOA), which amended Title VII of the Tariff Act of 1930 to transfer import

duties collected under U.S. antidumping and countervailing duty orders from the U.S. Treasury to the

companies that filed the antidumping and countervailing duty petitions. Consultations were held on

February 6, 2001. On May 21, 2001, Canada and Mexico also requested consultations on the same matter,

which were held on June 29, 2001. On July 12, 2001, the original nine complaining parties requested the

establishment of a panel, which was established on August 23, 2001. On September 10, 2001, a panel was

established at the request of Canada and Mexico, and all complaints were consolidated into one panel. The

Panel was composed of: Mr. Luzius Wasescha, Chair; and, Mr. Maamoun Abdel-Fattah and Mr. William

Falconer, Members.

The Panel issued its report on September 2, 2002, finding against the United States on three of the five

principal claims brought by the complaining parties. Specifically, the Panel found that the CDSOA

constitutes a specific action against dumping and subsidies and, therefore, is inconsistent with the

Antidumping and SCM Agreements as well as Article VI of the GATT 1994. The Panel also found that

the CDSOA distorts the standing determination conducted by Commerce and, therefore, is inconsistent with

the standing provisions in the Antidumping and SCM Agreements. The United States prevailed against the

complainants’ claims under the Antidumping and SCM Agreements that the CDSOA distorts Commerce’s

consideration of price undertakings (agreements to settle antidumping and countervailing duty

investigations). The Panel also rejected Mexico’s actionable subsidy claim brought under the SCM

Agreement. Finally, the Panel rejected the complainants’ claims under Article X:3 of the GATT, Article

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15 of the Antidumping Agreement, and Articles 4.10 and 7.9 of the SCM Agreement. The United States

appealed the Panel’s adverse findings on October 1, 2002.

The Appellate Body issued its report on January 16, 2003, upholding the Panel’s finding that the CDSOA

is an impermissible action against dumping and subsidies, but reversing the Panel’s finding on standing.

The DSB adopted the Panel and Appellate Body reports on January 27, 2003. At the meeting, the United

States stated its intention to implement the DSB recommendations and rulings. On June 13, 2003, the

Arbitrator determined that this period would end on December 27, 2003. On June 19, 2003, legislation to

bring the Continued Dumping and Subsidy Offset Act into conformity with U.S. obligations under the

Antidumping Agreement, the SCM Agreement, and the GATT of 1994 was introduced in the U.S. Senate

(S. 1299).

On January 15, 2004, eight complaining parties (Brazil, Canada, Chile, the EU, India, Japan, South Korea,

and Mexico) requested WTO authorization to retaliate. The remaining three complaining parties (Australia,

Indonesia, and Thailand) agreed to extend to December 27, 2004, the period of time in which the United

States had to comply with the WTO rulings and recommendations in this dispute. On January 23, 2004,

the United States objected to the requests from the eight complaining parties to retaliate, thereby referring

the matter to arbitration. On August 31, 2004, the Arbitrators issued their awards in each of the eight

arbitrations. They determined that each complaining party could retaliate, on a yearly basis, covering the

total value of trade not exceeding, in U.S. dollars, the amount resulting from the following equation: amount

of disbursements under CDSOA for the most recent year for which data are available relating to

antidumping or countervailing duties paid on imports from each party at that time, as published by the U.S.

authorities, multiplied by 0.72.

Based on requests from Brazil, the EU, India, Japan, South Korea, Canada, and Mexico, on November 26,

2004, the DSB granted these Members authorization to suspend concessions or other obligations, as

provided in DSU Article 22.7 and in the Decisions of the Arbitrators. The DSB granted Chile authorization

to suspend concessions or other obligations on December 17, 2004. On December 23, 2004, and January

7 and January 11, 2005, the United States reached agreements with Australia, Thailand, and Indonesia that

these three complaining parties would not request authorization to suspend concessions at that time, and

that the United States would not object to a future request on grounds of lack of timeliness.

On February 8, 2006, the U.S. President signed the Deficit Reduction Act into law. That Act included a

provision repealing the CDSOA. Certain of the complaining Parties nevertheless continued to impose

retaliatory measures because they considered that the Deficit Reduction Act failed to bring the United States

into immediate compliance.

The United States has informed WTO Members that it has withdrawn the challenged measure and come

into compliance in this dispute. In 2022, the EU continued imposing countermeasures at a rate of 0.1

percent.

United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services (DS285)

On March 13, 2003, Antigua and Barbuda (Antigua) requested consultations regarding its claim that U.S.

Federal, State, and territorial laws on gambling violate U.S. specific commitments under the GATS, as well

as Articles VI, XI, XVI, and XVII of the GATS, to the extent that such laws prevent or can prevent operators

from Antigua from lawfully offering gambling and betting services in the United States. Consultations

were held on April 30, 2003.

Antigua requested the establishment of a panel on June 12, 2003. The DSB established a panel on July 21,

2003. At the request of Antigua, on August 21, 2003, the Director-General composed the Panel as follows:

II. TRADE ENFORCEMENT ACTIVITIES | 85

Mr. B.K. Zutshi, Chair; and, Mr. Virachai Plasai and Mr. Richard Plender, Members. The Panel’s final

report, circulated on November 10, 2004, found that the United States breached Article XVI (Market

Access) of the GATS by maintaining three U.S. Federal laws (18 U.S.C. §§ 1084, 1952, and 1955) and

certain statutes of Louisiana, Massachusetts, South Dakota, and Utah. It also found that these measures

were not justified under exceptions in Article XIV of the GATS.

The United States filed a notice of appeal on January 7, 2005. The Appellate Body issued its report on

April 7, 2005, in which it reversed and/or modified several Panel findings. The Appellate Body overturned

the Panel’s findings regarding the state statutes, and found that the three U.S. Federal gambling laws at

issue “fall within the scope of ‘public morals’ and/or ‘public order’” under Article XIV. To meet the

requirements of the Article XIV chapeau, the Appellate Body found that the United States needed to clarify

an issue concerning Internet gambling on horse racing.

The DSB adopted the Panel and Appellate Body reports on April 20, 2005. On May 19, 2005, the United

States stated its intention to implement the DSB recommendations and rulings. On August 19, 2005, an

Article 21.3(c) arbitrator determined that the RPT for implementation would expire on April 3, 2006.

At the DSB meeting of April 21, 2006, the United States informed the DSB that the United States was in

compliance with the recommendations and rulings of the DSB in the dispute. On June 8, 2006, Antigua

requested consultations with the United States regarding U.S. compliance with the DSB recommendations

and rulings. The parties held consultations on June 26, 2006. On July 5, 2006, Antigua requested the DSB

to establish a panel pursuant to Article 21.5 of the DSU, and a panel was established on July 19, 2006. The

chair of the original panel and one of the panelists were unavailable to serve. The Parties agreed on their

replacements, and the Panel was composed as follows: Mr. Lars Anell, Chair; and, Mr. Mathias Francke

and Mr. Virachai Plasai, Members. The report of the Article 21.5 Panel, which was circulated on March

30, 2007, found that the United States had not complied with the recommendations and rulings of the DSB

in this dispute.

On May 4, 2007, the United States initiated the procedure provided for under Article XXI of the GATS to

modify the schedule of U.S. commitments so as to reflect the original U.S. intent of excluding gambling

and betting services.

The DSB adopted the report of the Article 21.5 panel on May 22, 2007. On June 21, 2007, Antigua

submitted a request, pursuant to Article 22.2 of the DSU, for authorization from the DSB to suspend the

application to the United States of concessions and related obligations of Antigua under the GATS and the

TRIPS Agreement. On July 23, 2007, the United States referred this matter to arbitration under Article

22.6 of the DSU. The arbitration was carried out by the three panelists who served on the Article 21.5

Panel.

On December 21, 2007, the Article 22.6 arbitration award was circulated. The Arbitrator concluded that

Antigua’s annual level of nullification or impairment of benefits is $21 million, and that Antigua may

request authorization from the DSB to suspend its obligations under the TRIPS Agreement in this amount.

On December 6, 2012, Antigua submitted a request under Article 22.7 of the DSU for authorization to

suspend concessions or other obligations under the TRIPS Agreement consistent with the award of the

Arbitrator. At the DSB meeting of January 28, 2013, the DSB authorized Antigua to suspend concessions

or other obligations under the TRIPS Agreement consistent with the award of the Arbitrator.

During 2007 and early 2008, the United States reached agreement with every WTO Member, aside from

Antigua, that had pursued a claim of interest in the GATS Article XXI process of modifying the U.S.

schedule of GATS commitments so as to exclude gambling and betting services. Antigua and the United

States have engaged in efforts to achieve a mutually agreeable resolution to this matter.

86 | II. TRADE ENFORCEMENT ACTIVITIES

United States – Subsidies on large civil aircraft (DS317)

On October 6, 2004, the EU requested consultations with respect to “prohibited and actionable subsidies

provided to U.S. producers of large civil aircraft.” The EU alleged that such subsidies violated several

provisions of the SCM Agreement, as well as Article III:4 of the GATT. Consultations were held on

November 5, 2004. On January 11, 2005, the United States and the EU agreed to a framework for the

negotiation of a new agreement to end subsidies for large civil aircraft. The parties set a three-month

timeframe for the negotiations and agreed that, during negotiations, they would not request panel

proceedings. These discussions did not produce an agreement. On May 31, 2005, the EU requested the

establishment of a panel to consider its claims. The EU filed a second request for consultations regarding

large civil aircraft subsidies on June 27, 2005. This request covered many of the measures covered in the

initial consultations, as well as many additional measures that were not covered.

A panel was established with regard to the October claims on July 20, 2005. On October 17, 2005, the

Deputy Director-General established the Panel as follows: Ms. Marta Lucía Ramírez de Rincón, Chair;

and, Ms. Gloria Peña and Mr. David Unterhalter, Members. Since that time, Ms. Ramírez and Mr.

Unterhalter have resigned from the Panel. They have not been replaced.

The EU requested establishment of a panel with regard to its second panel request on January 20, 2006.

That Panel was established on February 17, 2006. On December 8, 2006, the WTO issued notices changing

the designation of this Panel to DS353. The summary below of United States – Subsidies on large civil

aircraft (Second Complaint) (DS353) discusses developments with regard to this Panel.

United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint) (DS353)

On June 27, 2005, the EU filed a second request for consultations regarding large civil aircraft subsidies

allegedly applied by the United States. The section above on United States – Subsidies on large civil

aircraft (DS317) discusses developments with regard to the dispute arising from the initial request for

consultations. The June 2005 request covered many of the measures in the initial consultations, as well as

many additional measures that were not covered. The EU requested establishment of a panel with regard

to its second panel request on January 20, 2006. A panel was established on February 17, 2006. On

November 22, 2006, the Deputy Director-General composed the Panel as follows: Mr. Crawford Falconer,

Chair; and, Mr. Francisco Orrego Vicuña and Mr. Virachai Plasai, Members.

The Panel granted the parties’ request to open the substantive meetings with the parties to the public via a

screening of a videotape of the public session. The sessions of the Panel meeting that involved business

confidential information and the Panel’s meeting with third parties were closed to the public.

On March 31, 2011, the Panel circulated its report with the following findings:

Findings against the EU

 Most of the National Aeronautics and Space Administration (NASA) research spending challenged

by the EU did not go to Boeing.

 Most of the U.S. Department of Defense (DoD) research payments to Boeing were not subsidies or

did not cause adverse effects to Airbus.

 Treatment of patent rights under U.S. Government contracts is not a subsidy specific to the aircraft

industry.

II. TRADE ENFORCEMENT ACTIVITIES | 87

 Treatment of certain overhead expenses in U.S. Government contracts is not a subsidy.

 Washington State infrastructure and plant location incentives were not a subsidy or did not cause

adverse effects.

 Commerce research programs were not a subsidy specific to the aircraft industry.

 The U.S. Department of Labor payments to Edmonds Community College in Snohomish County,

Washington, were not specific subsidies.

 Kansas and Illinois tax programs were not subsidies or did not cause adverse effects.

 The Foreign Sales Corporation/Extraterritorial Income tax measures were a WTO inconsistent

subsidy, but as the United States removed the subsidy in 2006, there was no need for any further

recommendation.

Findings against the United States

 NASA research programs conferred a subsidy to Boeing of $2.6 billion that caused adverse effects

to Airbus.

 Tax programs and other incentives offered by the State of Washington and some of its

municipalities conferred a subsidy of $16 million that caused adverse effects to Airbus.

 Certain types of research projects funded under the U.S. Department of Defense’s Manufacturing

Technology and Dual Use Science and Technology programs were a subsidy to Boeing of

approximately $112 million that caused adverse effects to Airbus.

On April 1, 2011, the EU filed a notice of appeal on certain findings, and on April 28, 2011, the United

States filed a notice of other appeal. On March 12, 2012, the Appellate Body circulated its report with the

following findings:

 The Panel erred in its analysis of whether NASA and DoD research funding was a subsidy.

However, the Appellate Body affirmed the Panel’s subsidy finding with regard to NASA research

funding and DoD research funding through assistance instruments on other grounds. The Appellate

Body declared the Panel’s findings with regard to DoD procurement contracts moot, but made no

further findings.

 The Panel correctly found that NASA and DoD rules regarding the allocation of patent rights were

not, on their face, specific subsidies. The Appellate Body found that the Panel should have

addressed the EU allegations of de facto specificity, but was unable to complete the Panel’s analysis

of this issue.

 The Panel correctly found that Washington State tax measures and industrial revenue bonds issued

by the City of Wichita were subsidies.

 The Panel erred in concluding that the WTO DSB was not obligated to initiate information-

gathering procedures requested by the EU, but this error did not require any modification in the

panel’s ultimate findings.

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 The Panel correctly concluded that NASA research funding and DoD funding of research through

assistance instruments caused adverse effects to Airbus.

 The Panel erred in analyzing the effects of the Wichita industrial revenue bonds separately from

other tax measures. The Appellate Body grouped the Wichita measure with the other tax benefits.

 The Panel erred in concluding that Washington State tax benefits, in tandem with Foreign Sales

Corporation/ Extraterritorial Income (FSC/ETI) tax benefits program, caused lost sales, lost market

share, and price depression of the Airbus A320 and A340 product lines. The Appellate Body found

that the evidence before it justified a finding of lost sales only in two instances, involving 50 A320

airplanes.

On March 23, 2012, the DSB adopted its recommendations and rulings in this dispute. At the following

DSB meeting, on April 13, 2012, the United States informed the DSB of its intention to implement the

recommendations and rulings of the DSB in connection with this matter. On September 23, 2012, the

United States notified the DSB that it had brought the challenged measures into compliance with the

recommendations and rulings of the DSB.

On September 25, 2012, the EU requested consultations regarding the U.S. notification. On October 11,

2012, the EU requested that the DSB refer the matter to the original Panel pursuant to Article 21.5 of the

DSU. The DSB did so at a meeting held on October 23, 2012. On October 30, 2012, the compliance Panel

was composed with the members of the original Panel: Mr. Crawford Falconer, Chair; and, Mr. Francisco

Orrego Vicuña and Mr. Virachai Plasai, Members.

The compliance Panel circulated its report on June 9, 2017, with the following findings:

Findings against the EU

 The EU alleged that DoD provided Boeing with funding and other resources worth $2.9 billion to

conduct research that assisted Boeing’s development of large civil aircraft. The Panel rejected most

of the EU claims for procedural reasons. It found that the remaining claims were worth only $41

million, that most of those programs were not subsidies. The Panel subsequently found that the

DoD funding found to constitute subsidies did not cause adverse effects to Airbus.

 The Panel found that NASA R&D programs were subsidies, but only conferred benefits of

approximately $158 million. It found that these subsidies did not cause adverse effects to Airbus.

 The EU alleged that the Federal Aviation Administration (FAA) provided funding and resources

worth $28 million to Boeing. The Panel found that the FAA program in question was a subsidy,

and agreed that it was worth $28 million. However, it found that these subsidies did not cause

adverse effects to Airbus.

 The EU alleged that Boeing received $51 million in tax benefits from 2007 through 2014 under the

FSC/ETI program that Congress discontinued in 2006. The Panel found that there was no evidence

that Boeing benefitted from this program in the 2007 to 2014 period.

 The EU asserted that the City of Wichita issued “industrial revenue bonds” in a way that gave

Boeing tax subsidies. The Panel found that this program was a subsidy, but that it did not constitute

a WTO breach because it was not “specific,” i.e., targeted toward particular entities or industries.

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 The EU brought claims with respect to a number of Washington State programs. The Panel rejected

one of the EU claims for procedural reasons. The Panel found that all of the remaining programs

were subsidies. However, with one exception, the Panel found that these programs did not cause

any adverse effects to Airbus.

 The EU alleged that several South Carolina programs worth a total of $1.7 billion caused adverse

effects to Airbus. The Panel found that all but three of these programs either were not subsidies or

were not “specific,” i.e., did not involve the type of targeting needed to establish a WTO breach.

Although it found that three South Carolina programs, worth a total of $78 million, were subsidies,

the Panel concluded that they did not cause adverse effects to Airbus.

Findings against the United States

 The EU argued that Washington State’s adjustment to its Business and Occupation (“B&O”) tax

applicable to aerospace manufacturing foregoes revenue that could otherwise be collected from

Boeing, making it a subsidy for WTO purposes. The Panel found that this program confers a

subsidy on Boeing, worth an average value of $100-$110 million per year during the period of

review. The Panel further found that these subsidies cause adverse effects, but only with respect

to certain sales of the Airbus A320 aircraft.

On June 29, 2017, the EU filed a notice of appeal on certain findings, and the United States filed a notice

of other appeal on August 10, 2017. The Division assigned to hear the appeal consisted of Mr. Peter Van

den Bossche, Mr. Thomas R. Graham, and Mr. Shree B.C. Servansing. On March 28, 2019, the Division

circulated its report with the following relevant findings:

 The Panel did not err in including DoD procurement contracts within its terms of reference, but the

panel did not sufficiently engage with evidence and arguments regarding whether the funding

conferred a benefit. However, there were insufficient factual findings by the panel or undisputed

facts on the record for the Appellate Body to complete the analysis in this respect.

 The Panel erred when considering whether revenue was “foregone” with respect to the FSC/ETI

tax concessions by focusing on the conduct of eligible taxpayers rather than the government. The

Appellate Body completed the legal analysis and found that the measure was inconsistent with the

SCM Agreement to the extent that Boeing remains entitled to FSC/ETI tax concessions.

 The Panel did not err in using the period following the end of the implementation period to assess

whether Wichita industrial revenue bonds were specific because of the granting of

disproportionately large amounts of subsidies to certain enterprises, but the Panel erred in finding

that no disparity existed between the expected and actual distribution of the subsidies. However,

there were insufficient factual findings by the Panel or undisputed facts on the record for the

Appellate Body to complete its legal analysis in this respect.

 The Panel did not err in its interpretation of the term “limited number” of certain enterprises with

respect to the specificity of the South Carolina economic development bonds, but the panel erred

by excluding evidence as to the percentage of bonds by value used by certain enterprises from its

evaluation of whether the subsidy was specific by reason of predominant use by certain enterprises.

However, there were insufficient factual findings by the Panel or undisputed facts on the record for

the Appellate Body to complete its legal analysis in this respect.

90 | II. TRADE ENFORCEMENT ACTIVITIES

 The Panel erred in the application of the term “designated geographical region” in assessing the

specificity of the South Carolina multi-county industrial park job tax credits. The Appellate Body

completed the legal analysis with respect to this and found that the subsidy was specific.

 The Panel correctly found that the EU had failed to establish that there was a continuation of the

original adverse effects of the pre-2007 aeronautics R&D subsidies into the post-implementation

period in the form of present serious prejudice in relation to the A330 and A350XWB.

 The Panel erred in in its analysis of whether the technology effects of the pre-2007 aeronautics

R&D subsidies in relation to certain U.S. aircraft continued into the post-implementation period,

and therefore, the panel’s finding that the EU failed to establish that the pre-2007 R&D subsidies

were a genuine and substantial cause of adverse effects to the A350XWB and A320neo in the post-

implementation period was reversed. However, there were insufficient factual findings by the panel

or undisputed facts on the record for the Appellate Body to complete its legal analysis in this

respect, and there was no basis to conclude that the original adverse effects, in the form of

technology effects, continued into the post-implementation period.

 The Panel correctly found that the EU failed to establish that the tied tax subsidies caused adverse

effects in the twin-aisle LCA market in the post-implementation period, but that there were adverse

effects in the post-implementation period in the form of significant lost sales in the single-aisle

LCA and in the form of threat of impedance of imports of Airbus single-aisle LCA in the U.S. and

United Arab Emirates markets.

On September 27, 2012, the EU requested authorization from the DSB to impose countermeasures. On

October 22, 2012, the United States objected to the level of suspension of concessions requested by the EU,

referring the matter to arbitration pursuant to Article 22.6 of the DSU. On November 27, 2012, the United

States and the EU each requested that the arbitration be suspended pending the conclusion of the compliance

proceeding. On June 5, 2019, at the request of the EU, the arbitration regarding the level of countermeasures

was resumed. On October 13, 2020, the Arbitrator issued its decision with respect to the adverse effects

caused by the Washington State tax rate reduction during an historical 2012 reference period. The

Arbitrator determined the level of countermeasures commensurate with the degree and nature of the adverse

effects determined to exist is approximately $3.99 billion annually. On October 26, 2020, the WTO granted

the EU authorization to take countermeasures consistent with the Arbitrator’s decision. Because the

Washington State tax rate reduction was repealed effective April 1, 2020, the EU has no legal basis to

maintain countermeasures on U.S. goods.

On June 15 and June 17, 2021, the United States reached understandings on cooperative frameworks with

the EU and the UK, respectively, on the parallel aircraft disputes (DS316 and DS353). In accordance with

the understandings, each side intends not to impose any WTO-authorized countermeasures for a period of

five years starting from July 4, 2021. Each side also intends to provide any financing to its large civil

aircraft producer (LCA producer) for the production or development of large civil aircraft on market terms.

Additionally, each side intends to provide any funding for research and development (R&D) for large civil

aircraft to its LCA producer through an open and transparent process while making the results of fully

government funded R&D widely available. A working group was also established under each framework

to analyze and overcome any disagreements in the sector, including on any existing support measures. The

working group will collaborate on jointly analyzing and addressing non-market practices of third parties

that may harm their respective large civil aircraft industries.

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United States — Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India

(DS436)

On April 24, 2012, India requested consultations concerning countervailing measures on certain hot-rolled

carbon steel flat products from India. India challenged the Tariff Act of 1930, in particular: sections

771(7)(G) regarding the cumulation of imports for purposes of an injury determination and 776(b) regarding

the use of “facts available.” India also challenged Title 19 of the Code of Federal Regulations, sections

351.308 regarding “facts available” and 351.511(a)(2)(i)-(iv), which relates to Commerce’s calculation of

benchmarks. In addition, India challenged the application of these and other measures in the U.S.

Department of Commerce’s countervailing duty (CVD) determinations and the U.S. International Trade

Commission’s (USITC) injury determination. Specifically, India argued that these determinations were

inconsistent with Articles I and IV of the GATT 1994 and Articles 1, 2, 10, 11, 12, 13, 14, 15, 19, 21, 22,

and 32 of the SCM Agreement. The DSB established a panel to examine the matter on August 31, 2012.

The Panel was composed by the Director-General on February 18, 2013, as follows: Mr. Hugh McPhail,

Chair; and, Mr. Anthony Abad and Mr. Hanspeter Tschaeni, Members.

The Panel met with the parties on July 9 and July 10, 2013, and on October 8 and October 9, 2013. The

Panel circulated its report on July 14, 2014. The Panel rejected India’s claims against the U.S. statutes and

regulations concerning facts available and benchmarks under Articles 12.7 and 14(d) of the SCM

Agreement, respectively. It also rejected India’s “as such” claim regarding the U.S. statutory cumulation

provision for injury determinations in five-year reviews, but found that the U.S. statute governing

cumulation in original injury investigations was inconsistent with Article 15 of the SCM Agreement

because it required the cumulation of subsidized imports with dumped non-subsidized imports in the

context of CVD investigations. Applying this reasoning, the Panel also found that the USITC’s injury

determination in the India Hot-Rolled Steel CVD investigation breached U.S. obligations under Article 15.

The Panel rejected India’s challenges under Article 1.1(a)(1) of the SCM Agreement to Commerce’s

“public body” findings in two instances, as well as most of India’s claims with respect to Commerce’s

application of facts available under Article 12.7 in the determination at issue. The Panel also rejected most

of India’s claims against Commerce’s specificity determinations under Article 2.1, and its calculation of

certain benchmarks used in the proceedings under Article 14(d). The Panel found that Commerce’s

determination that certain low-interest loans constituted “direct transfers” of funds was consistent with

Article 1.1(a)(1), but that Commerce’s determination that a captive mining program constituted a financial

contribution was not consistent with Article 1.1(a). Finally, the Panel found that Commerce did not act

inconsistently with Articles 11, 13, 21 and 22 of the SCM Agreement when it analyzed new subsidy

allegations in the context of review proceedings.

On August 8, 2014, India appealed the Panel’s findings. On August 13, 2014, the United States also

appealed certain of the Panel’s findings. The Appellate Body released its report on December 8, 2014.

The Appellate Body upheld the Panel’s findings regarding the U.S. benchmarks regulation, but found that

certain instances of Commerce’s application of these regulations were inconsistent with Article 14(d). The

Appellate Body rejected India’s interpretation of “public body” under Article 1.1(a)(1), but reversed the

Panel’s finding that Commerce acted consistently in making the public body determination at issue on

appeal. Regarding specificity, the Appellate Body rejected each of India’s appeals under Article 2.1(c), as

it did with respect to India’s challenge to the Panel’s finding under Article 1.1(a)(1)(i) relating to “direct

transfers of funds.” The Appellate Body also reversed the Panel’s finding that Commerce had acted

inconsistently with Article 1.1(a)(1)(iii) in finding that a captive mining program constituted a provision of

goods. Finally, the Appellate Body upheld the Panel’s rejection of India’s claims under Articles 11, 13,

and 21 regarding new subsidy allegations. The Appellate Body reversed the Panel’s findings under Article

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22 of the SCM Agreement, but was unable to complete the analysis. The DSB adopted the Appellate Body

report and the Panel report, as modified by the Appellate Body report, on December 19, 2014.

Regarding injury, the Appellate Body found that the Panel had failed to conduct an objective examination

of the U.S. cumulation statute. However, without any relevant Panel factual findings or arguments by the

Parties, the Appellate Body erroneously found that one subsection of the cumulation provision

(1677(7)(G)(i)(III)) was inconsistent with the SCM Agreement because it requires cumulation of subsidized

imports with dumped non-subsidized imports in the context of CVD investigations, without considering

that this subsection could apply only if Commerce self-initiated an investigation on the same day that a

petition was filed covering the same products.

At the DSB meeting held on January 16, 2015, the United States notified the DSB of its intention to comply

with the recommendations and rulings and indicated it would need an RPT to do so. On March 24, 2015,

the United States and India informed the DSB that they had agreed on an RPT of 15 months, ending on

March 19, 2016. At the United States’ request, India then agreed to a 30-day extension to April 18, 2016.

On March 7, 2016, the USITC issued a Section 129 determination in the hot-rolled steel from India CVD

proceeding to comply with the findings of the Appellate Body. On March 18, 2016, Commerce issued its

preliminary determination memos in the Section 129 proceedings, and on April 14, 2016, Commerce issued

its final Section 129 determinations. On April 22, 2016, the United States informed the DSB that it had

complied with the recommendations and rulings in this dispute.

On June 5, 2017, India requested consultations regarding the U.S. implementation, and on March 28, 2018,

India requested the establishment of a compliance panel. On May 31, 2018, the Panel was composed of

the original panel members. The compliance Panel circulated its panel report on November 15, 2019. The

compliance Panel rejected the majority of India’s claims that the United States failed to bring its CVD

determination and injury determination into compliance. The United States prevailed on eight sets of

claims, including with respect to Commerce’s determination that the National Mineral Development

Corporation is a public body, rejection of in-country benchmarks, use of out-of-country benchmarks, the

calculation of benefit under the Steel Development Fund program, inclusion of new subsidies in a review

proceeding, disclosure of essential facts, the “appropriateness” of exceeding a terminated domestic

settlement rate in a Section 129 proceeding, and all but one aspect of the injury determination. The

compliance Panel found in favor of India on one specificity claim and on one injury issue. The compliance

Panel also found that the United States’ failure to amend one portion of the cumulation statute (19 USC §

1677(7)(G)(i)(III)) was inconsistent with the DSB recommendation made in the original proceedings of the

dispute.

On December 18, 2019, the United States notified the DSB of its decision to appeal issues of law covered

in the report of the compliance Panel and legal interpretations developed by the compliance Panel. Because

no division of the Appellate Body can be established to hear this appeal, the United States has sought to

confer with India to seek a positive solution to this dispute.

United States — Countervailing Duty Measures on Certain Products from China (DS437)

On May 25, 2012, China requested consultations regarding numerous U.S. countervailing duty

determinations in which Commerce had determined that various Chinese state-owned enterprises were

“public bodies” under Article 1.1(a)(1) of the SCM Agreement, with a view towards extending the

Appellate Body’s analysis in DS379 to those determinations. China challenged various other aspects of

these investigations as well, including but not limited to Commerce’s calculation of benchmarks, initiation

II. TRADE ENFORCEMENT ACTIVITIES | 93

standard, determination of specificity of the subsidies, use of facts available, and finding that export

restraints were a countervailable subsidy.

Consultations were held in July 2012, and a panel was established in September 2012. The Panel was

composed by the Director-General on November 26, 2012, as follows: Mr. Mario Matus, Chair; and, Mr.

Scott Gallacher and Mr. Hugo Perezcano Díaz, Members. The Panel met with the Parties on April 30 and

May 1, 2013, and on June 18 and June 19, 2013. The Panel circulated its report on July 14, 2014. The

Panel found that Commerce’s determinations in 12 investigations that certain state-owned enterprises were

“public bodies” were inconsistent with Article 1.1(a)(1) of the SCM Agreement, based on the Appellate

Body’s analysis in DS379. However, the Panel found in favor of the United States with respect to China’s

claims regarding Commerce’s calculation of benchmarks, initiation of investigations, and use of facts

available. The Panel also upheld most of Commerce’s specificity determinations. The Panel also found

that China established that Commerce acted inconsistently with Article 11.3 of the SCM Agreement by

initiating countervailing duty investigations of export restraints.

On August 22, 2014, China appealed the Panel’s findings regarding Commerce’s calculation of

benchmarks, specificity determinations, and use of facts available. On August 27, 2014, the United States

appealed the Panel’s finding that a section of China’s panel request setting forth claims related to

Commerce’s use of facts available was within the panel’s terms of reference. The Appellate Body held a

hearing in Geneva on October 16 and October 17, 2014, with Peter Van den Bossche as Chair; and, Ujal

Singh Battia and Seung Wha Chang as Members.

On December 18, 2014, the Appellate Body circulated its report. On benchmarks, the Appellate Body

reversed the Panel and found that Commerce’s determination to use out-of-country benchmarks in four

countervailing duty investigations was inconsistent with Articles 1.1(b) and 14(d) of the SCM Agreement.

On specificity, the Appellate Body rejected one of China’s claims with respect to the order of analysis in

de facto specificity determinations. However, the Appellate Body reversed the Panel’s findings that

Commerce did not act inconsistently with Article 2.1 when it failed to identify the “jurisdiction of the

granting authority” and “subsidy programme” before finding the subsidy specific. On facts available, the

Appellate Body accepted China’s claim that the Panel’s findings regarding facts available were inconsistent

with Article 11 of the DSU, and reversed the Panel’s finding that Commerce’s application of facts available

was not inconsistent with Article 12.7 of the SCM Agreement. Lastly, the Appellate Body rejected the U.S.

appeal of the Panel’s finding that China’s panel request failed to meet the requirement of Article 6.2 of the

DSU to present an adequate summary of the legal basis of its claim sufficient to present the problem clearly.

The DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report,

on January 16, 2015. In a letter dated February 13, 2015, the United States notified the DSB of its intention

to comply with its WTO obligations and indicated it would need a RPT to do so.

On June 26, 2015, China requested that the RPT be determined through arbitration pursuant to Article

21.3(c) of the DSU. On July 17, 2015, the Director-General appointed Mr. Georges M. Abi-Saab as the

arbitrator. On October 9, 2015, the Arbitrator issued his award, deciding that the RPT would be 14 months

and 16 days, ending on April 1, 2016.

Commerce subsequently issued redeterminations in 15 separate countervailing duty investigations and with

respect to one “as such” finding of the DSB. Commerce implemented these determinations on April 1,

2016, and May 26, 2016. On June 22, 2016, the United States notified the DSB that it had brought the

challenged measures into compliance with the recommendations and rulings of the DSB.

On May 13, 2016, China requested consultations regarding the U.S. implementation. The United States

and China held consultations on May 27, 2016. On July 8, 2016, China requested that the DSB refer the

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matter to the original Panel pursuant to Article 21.5 of the DSU. The DSB did so at a meeting held on July

21, 2016. On October 5, 2016, the compliance Panel was composed with one member of the original Panel:

Mr. Hugo Perezcano Diaz, Chair; and, two additional panelists Mr. Luis Catibayan and Mr. Thinus Jacobsz,

Members, who were selected to replace unavailable members of the original panel. The compliance Panel

circulated its report on March 21, 2018. The compliance Panel found that Commerce’s redeterminations

that certain state-owned enterprises were “public bodies” were not inconsistent with Article 1.1(a)(1) of the

SCM Agreement, and Commerce’s Public Bodies Memorandum is not inconsistent with the SCM

Agreement, “as such.” The compliance Panel also upheld Commerce’s redetermination concerning

regional specificity. However, the compliance Panel found in favor of China with respect to China’s claims

regarding Commerce’s calculation of benchmarks and its input specificity analysis.

On April 27, 2018, the United States appealed certain findings of the compliance Panel regarding the Public

Bodies Memorandum, Commerce’s benchmarks and input specificity redeterminations, and whether certain

Commerce determinations were within the compliance Panel’s terms of reference. On May 2, 2018, China

appealed certain findings of the compliance Panel regarding Commerce’s redeterminations that certain

state-owned enterprises were “public bodies,” the Public Bodies Memorandum, and the legal interpretation

of Articles 1.1(b) and 14(d) of the SCM Agreement. The three persons hearing the appeal were Thomas R.

Graham as Presiding Member; and, Ujal Singh Battia and Shree B.C. Servansing. An appellate report was

circulated on July 16, 2019. The Appellate Majority upheld the findings of the compliance Panel. The

appellate report includes a lengthy dissent that calls into question the reasoning and interpretative analysis

of the appellate majority and prior Appellate Body reports.

The DSB considered the appellate report and the compliance Panel report, as modified by the appellate

report, at its meeting on August 15, 2019. The United States noted in its DSB statement that, through the

interpretations applied in this proceeding, based primarily on erroneous approaches by the Appellate Body

in past reports, the WTO dispute settlement system is weakening the ability of WTO Members to use WTO

tools to discipline injurious subsidies. The SCM Agreement is not meant to provide cover for, and render

untouchable, one Member’s policy of providing massive subsidies to its industries through a complex web

of laws, regulations, policies, and industrial plans. Finding that the kinds of subsidies at issue in this dispute

cannot be addressed using existing WTO remedies, such as countervailing duties, calls into question the

usefulness of the WTO to help WTO Members address the most urgent economic problems in today’s

global economy. The United States noted specific aspects of the findings of the appellate report that are

erroneous and undermine the interests of all WTO Members in a fair-trading system, including erroneous

interpretations of “public body” and out-of-country benchmarks, diminishing U.S. rights and adding to U.S.

obligations, engaging in fact-finding, and treating prior reports as “precedent.”

On October 17, 2019, China requested authorization to suspend concessions and other obligations pursuant

to Article 22.2 of the DSU. On October 25, 2019, the United States objected to China’s request, referring

the matter to arbitration pursuant to Article 22.6 of the DSU. On November 15, 2019, the WTO notified

the parties that the arbitration would be carried out by the panelists who served during the compliance

proceeding: Mr. Hugo Perezcano Diaz, Chair; and, Mr. Luis Catibayan and Mr. Thinus Jacobsz, Members.

The Arbitrator held a virtual hearing with the parties in November 2020. In January 2022, the Arbitrator

decided that the level of suspension of concessions or other obligations should be no more than $645.121

million annually.

United States – Anti-Dumping and Countervailing Measures on Large Residential Washers from Korea

(DS464)

On August 29, 2013, the United States received from Korea a request for consultations pertaining to

antidumping and countervailing duty measures imposed by the United States pursuant to final

determinations issued by Commerce following antidumping and countervailing duty investigations

II. TRADE ENFORCEMENT ACTIVITIES | 95

regarding large residential washers (washers) from Korea. Korea claimed that Commerce’s determinations,

as well as certain methodologies used by Commerce, were inconsistent with U.S. commitments and

obligations under Articles 1, 2, 2.1, 2.4, 2.4.2, 5.8, 9.3, 9.4, 9.5, 11, and 18.4 of the Antidumping Agreement,

Articles 1.1, 1.2, 2.1, 2.2, 10, 14, and 19.4 of the SCM Agreement; Articles VI, VI:1, VI:2, and VI:3 of the

GATT 1994; and Article XVI:4 of the WTO Agreement. Specifically, Korea challenged Commerce’s

alleged use of “zeroing” and application of the second sentence of Article 2.4.2 of the Antidumping

Agreement, as applied in the washers antidumping investigation and “as such.” Korea also challenged

Commerce’s determinations in the washers countervailing duty investigation that Article 10(1)(3) of

Korea’s Restriction of Special Taxation Act (RSTA) is a subsidy that is specific within the meaning of

Article 2.1 of the SCM Agreement, Commerce’s determination of the amount of subsidy benefit received

by a respondent under Article 10(1)(3) of the RSTA, Commerce’s determination that Article 26 of the

RSTA is a regionally specific subsidy, and Commerce’s imposition of countervailing duties on one

respondent that were attributable to tax credits that the respondent received for investments that it made

under Article 26 of the RSTA.

The United States and Korea held consultations on October 3, 2013. On December 5, 2013, Korea

requested that the DSB establish a panel. On January 22, 2014, a panel was established. On June 20, 2014,

the Director-General composed the Panel as follows: Ms. Claudia Orozco, Chair; and Mr. Mazhar Bangash

and Mr. Hanspeter Tschaeni, Members.

The Panel circulated its report on March 11, 2016. The Panel found that aspects of Commerce’s

antidumping determination were inconsistent with the second sentence of Article 2.4.2 of the Antidumping

Agreement, including the determination to apply an alternative, average-to-transaction comparison

methodology and the application of that methodology to all transactions rather than just to so-called pattern

transactions. The Panel rejected other claims asserted by Korea, including Korea’s argument that

Commerce acted inconsistently with Article 2.4.2 by determining the existence of a pattern exclusively on

the basis of quantitative criteria.

The Panel found that aspects of Commerce’s differential pricing methodology are inconsistent “as such”

with the second sentence of Article 2.4.2 of the Antidumping Agreement. The Panel also found that the

United States’ use of zeroing when applying the average-to-transaction comparison methodology is

inconsistent with the second sentence of Article 2.4.2 and Article 2.4, both “as such” and as applied in the

washers antidumping investigation.

In addition, the Panel made several findings on the CVD issues raised by Korea. The Panel found that

Commerce’s disproportionality analysis, in its original and remand determinations, was inconsistent with

Article 2.1(c) of the SCM Agreement. But the Panel rejected Korea’s remaining claims – i.e., its claim that

Commerce’s regional specificity determination was inconsistent with Article 2.2 of the SCM Agreement,

and its claims concerning the proper quantification of subsidy ratios.

On April 19, 2016, the United States appealed certain of the Panel’s findings. Korea filed another appeal

on April 25, 2016.

On September 7, 2016, the Appellate Body circulated its report. The Appellate Body upheld several of the

Panel’s findings under the Antidumping Agreement, including the Panel’s finding that the average-to-

transaction comparison methodology should be applied only to so-called pattern transactions, the Panel’s

finding that the use of zeroing is inconsistent with the second sentence of Article 2.4.2 and Article 2.4, both

“as such” and as applied, and the Panel’s finding that the differential pricing methodology is inconsistent

“as such” with the second sentence of Article 2.4.2 of the Antidumping Agreement. The Appellate Body

reversed other findings made by the Panel. For instance, the Appellate Body found that an investigating

authority must assess the price differences at issue on both a quantitative and qualitative basis, and the

96 | II. TRADE ENFORCEMENT ACTIVITIES

Appellate Body mooted the Panel’s finding concerning systemic disregarding, finding instead that the

combined application of comparison methodologies is impermissible. With respect to the CVD issues, the

Appellate Body upheld the Panel’s rejection of Korea’s regional specificity claim, but found that certain

aspects of Commerce’s calculation of subsidy rates were inconsistent with Article 19.4 of the SCM

Agreement and Article VI:3 of the GATT 1994.

On September 26, 2016, the DSB adopted the Panel and Appellate Body reports. On October 26, 2016, the

United States stated that it intends to implement the recommendations of the DSB in this dispute in a manner

that respects U.S. WTO obligations, and that it will need a reasonable period of time in which to do so. On

April 13, 2017, an Article 21.3(c) arbitrator determined that the RPT for implementation would expire on

December 26, 2017.

On January 11, 2018, Korea requested authorization to suspend concessions and other obligations pursuant

to Article 22.2 of the DSU. On January 19, 2018, the United States objected to Korea’s request, referring

the matter to arbitration pursuant to Article 22.6 of the DSU. On February 6, 2018, the WTO notified the

parties that the arbitration would be carried out by the original panelists: Ms. Claudia Orozco, Chair; and

Mr. Mazhar Bangash and Mr. Hanspeter Tschaeni, Members. The Arbitrator circulated its decision on

February 8, 2019. The Arbitrator determined that the level of nullification or impairment to Korea from

U.S. noncompliance with respect to the antidumping and countervailing duty measures on washers totaled

no more than $84.81 million per year, and the Arbitrator further specified a formula for calculating the

nullification or impairment for products other than washers.

On May 6, 2019, Commerce published a notice in the U.S. Federal Register announcing the revocation of

the antidumping and countervailing duty orders on washers (84 Fed. Reg. 19,763 (May 6, 2019)). With

this action, the United States completed implementation of the DSB recommendations concerning those

antidumping and countervailing duty orders.

United States – Certain Methodologies and their Application to Anti-Dumping Proceedings Involving

China (DS471)

On December 3, 2013, the United States received a request from China for consultations pertaining to

antidumping measures imposed by the United States pursuant to final determinations issued by Commerce

following antidumping investigations regarding a number of products from China, including certain coated

paper suitable for high-quality print graphics using sheet-fed presses; certain oil country tubular goods;

high pressure steel cylinders, polyethylene terephthalate film, sheet, and strip; aluminum extrusions; certain

frozen and canned warm water shrimp; certain new pneumatic off–the-road tires; crystalline silicon

photovoltaic cells, whether or not assembled into modules; diamond sawblades and parts thereof;

multilayered wood flooring; narrow woven ribbons with woven selvedge; polyethylene retail carrier bags;

and, wooden bedroom furniture. China claimed that Commerce’s determinations, as well as certain

methodologies used by Commerce, are inconsistent with U.S. obligations under Articles 2.4.2, 6.1, 6.8,

6.10, 9.2, 9.3, 9.4, and Annex II of the Antidumping Agreement; and, Article VI:2 of the GATT 1994.

Specifically, China challenged Commerce’s application in certain investigations and administrative reviews

of a “targeted dumping methodology,” “zeroing” in connection with such methodology, a “single rate

presumption for non-market economies,” and an “NME-wide methodology” including certain “features.”

China also challenged a “single rate presumption” and the use of “adverse facts available” “as such.”

The United States and China held consultations on January 23, 2014. On February 13, 2014, China

requested that the DSB establish a panel, and a panel was established on March 26, 2014. On August 28,

2014, the Director-General composed the Panel as follows: Mr. José Pérez Gabilondo, Chair; and, Ms.

Beatriz Leycegui Gardoqui and Ms. Enie Neri de Ross, Members.

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The Panel circulated its report on October 19, 2016. The Panel found that a number of aspects of the

“targeted dumping methodology” applied by Commerce in three challenged investigations were not

inconsistent with the requirements of the Antidumping Agreement, including certain quantitative aspects

of Commerce’s methodology. However, the Panel found fault with other aspects of Commerce’s

methodology and with Commerce’s explanation of why resort to the alternative methodology was

necessary. The Panel also found that Commerce’s application of the alternative methodology to all sales,

rather than only to so-called pattern sales, and Commerce’s use of “zeroing” in connection with the

alternative methodology, were inconsistent with the second sentence of Article 2.4.2 of the Antidumping

Agreement. The Panel found that Commerce’s use of a rebuttable presumption that all producers and

exporters in China comprise a single entity under common government control – the China-government

entity – to which a single antidumping margin is assigned, both as used in specific proceedings and

generally, is inconsistent with certain obligations in the Antidumping Agreement concerning when

exporters and producers are entitled to a unique antidumping margin or rate. Finally, the Panel agreed with

the United States that China had not established that Commerce has a general norm whereby it uses adverse

inferences to pick information that is adverse to the interests of the China-government entity in calculating

its antidumping margin or rate. The Panel also decided to exercise judicial economy with respect to the

information Commerce utilized in particular proceedings.

On November 18, 2016, China appealed certain of the Panel’s findings regarding Commerce’s “targeted

dumping methodology,” use of “adverse facts available,” and the “single rate presumption.” The Appellate

Body held a hearing in Geneva on February 27 and February 28, 2017, and issued a report on May 11,

2017. The Appellate Body rejected virtually all of China’s claims on appeal and did not make any

additional findings of inconsistency against the United States.

On May 22, 2017, the DSB adopted the Panel and Appellate Body reports. On June 19, 2017, the United

States stated that it intends to implement the recommendations of the DSB in this dispute in a manner that

respects U.S. WTO obligations, and that it will need a reasonable period of time in which to do so. On

October 17, 2017, China requested that an Article 21.3(c) arbitrator determine the RPT for implementation.

The Arbitrator determined the reasonable period of time to be 15 months, expiring on August 22, 2018.

On September 9, 2018, China requested authorization to suspend concessions and other obligations

pursuant to Article 22.2 of the DSU. On September 19, 2018, the United States objected to China’s request,

referring the matter to arbitration. On October 5, 2018, the WTO notified the parties that the arbitration

would be carried out by the original panelists: Mr. José Pérez Gabilondo, Chair; and, Ms. Beatriz Leycegui

Gardoqui and Ms. Enie Neri de Ross, Members. The Arbitrator circulated its decision on November 1,

2019. The Arbitrator determined that the level of nullification or impairment to China from U.S.

noncompliance with respect to determinations made by Commerce in a number of antidumping proceedings

involving goods from China, as well as certain methodologies China claimed Commerce applies in

antidumping proceedings, totaled no more than $3.579 billion per year.

United States – Anti-Dumping Measures on Oil Country Tubular Goods from Korea (DS488)

On December 22, 2014, the United States received from Korea a request for consultations pertaining to

antidumping duties imposed on oil country tubular goods from Korea. Korea claimed that the calculation

by Commerce of the constructed value profit rate for Korean respondents was inconsistent with U.S.

obligations under Articles 2.2, 2.2.2, 2.4, 6.2, 6.4, 6.9, and 12.2.2 of the Antidumping Agreement and

Articles I and X:3 of the GATT 1994. Korea also claimed that Commerce’s decision regarding the

affiliation of a certain Korean respondent to a supplier, and the effects of that decision, was inconsistent

with Articles 2.2.1.1 and 2.3 of the Antidumping Agreement and that its selection of two mandatory

respondents was inconsistent with Article 6.10, including Articles 6.10.1 and 6.10.2. Korea further claimed

that Commerce’s methodology for disregarding a respondent’s exports to third-country markets was

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inconsistent “as such” and “as applied” in the investigation at issue with Article 2.2 of the Antidumping

Agreement.

The United States and Korea held consultations on January 21, 2015. On February 23, 2015 Korea

requested the establishment of a panel. The DSB established a panel on March 25, 2015, and the Parties

agreed to the composition of the Panel on July 13, 2015 as follows: Mr. John Adank, Chair; and, Mr. Abd

El Rahman Ezz El Din Fawzy and Mr. Gustav Brink, Members. Subsequently, Mr. Adank withdrew as

Chair prior to the second substantive meeting of the Panel, and the Parties agreed that Mr. Crawford

Falconer would replace Mr. Adank as Chair. The Panel met with the parties on July 20 and July 21, 2016,

and November 1 and November 2, 2016.

The Panel circulated its report on November 14, 2017. The Panel found that the United States had acted

inconsistently with the chapeau of Article 2.2.2 of the Antidumping Agreement because Commerce did not

determine profit for constructed value based on actual data pertaining to sales of the like product in the

home market. The Panel also found that the United States had acted inconsistently with Articles 2.2.2(i)

and (iii) because Commerce relied on a narrow definition of the “same general category of products” in

concluding it could not determine profit under Article 2.2.2(i) and in concluding that it could not calculate

a profit cap under Article 2.2.2(iii). The Panel further found that the United States had acted inconsistently

with Article 2.2.2(iii) because Commerce failed to calculate and apply a profit cap. The Panel exercised

judicial economy with respect to Korea’s claims that the United States acted inconsistently with the chapeau

of Article 2.2.2 because Commerce did not determine profit for constructed value based on actual data

pertaining to sales of the like product in third-country markets and with respect to Articles 1 and 9.3 as a

consequence of substantive violations of Articles 2.2.2, 2.2.2(i), and 2.2.2(iii). Finally, the Panel found two

of Korea’s claims with respect to profit for constructed value to be outside its terms of reference, specifically

its claim that the United States had violated Article 2.2.2(iii) because Commerce had determined the profit

rate based on a certain company’s financial statements and its claim that the United States had violated

Article X: 3(a) of the GATT 1994, because Commerce had purportedly acted contrary to its agency practice

of determining profit.

The Panel otherwise rejected the remaining claims asserted by Korea with respect to the investigation at

issue, including claims regarding the use of constructed export price and the selection of costs for

calculation of constructed normal value; found such claims to be outside its terms of reference; or, exercised

judicial discretion. For example, the Panel specifically found that Korea failed to demonstrate that the

United States acted inconsistently with Articles 6.10 and 6.10.2 of the Antidumping Agreement in its

selection of mandatory respondents. The Panel also specifically rejected Korea’s claims that Commerce’s

methodology for disregarding a respondent’s exports to third-country markets was inconsistent “as such”

and “as applied” in the investigation with Article 2.2 of the Antidumping Agreement. Finally, the Panel

exercised judicial economy with respect to Korea’s claim that the United States had acted inconsistently

with Article 2.4.

On January 12, 2018, the DSB adopted the Panel report in this dispute. On February 26, 2018, the United

States and Korea informed the DSB that they had agreed that the reasonable period of time to implement

the DSB’s recommendations and rulings would be 12 months, expiring on January 12, 2019. On November

23, 2018, Commerce published a notice in the Federal Register commencing a proceeding to gather

information, analyze record evidence, and consider the determinations which would be necessary to bring

its measures into conformity with the DSB recommendations and rulings. On January 11, 2019, the United

States and Korea informed the DSB that they had mutually agreed to extend the reasonable period of time

for an additional six months, expiring on July 12, 2019.

On July 5, 2019, Commerce published a final decision memorandum, addressed all comments submitted

by interested parties, and implemented the recommendations and rulings of the DSB in a manner that

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respects U.S. WTO obligations. On July 11, 2019, the United States informed the DSB that these actions

brought the United States into compliance with the panel findings in this dispute.

On July 29, 2019, Korea requested the authorization of the DSB to suspend concessions or other obligations

pursuant to Article 22.2 of the DSU on the grounds that the United States had failed to comply with the

DSB’s recommendations and rulings within the reasonable period of time. On August 8, 2019, the United

States objected to Korea’s proposed level of suspension of concessions pursuant to Article 22.6 of the DSU,

referring the matter to arbitration. On February 6, 2020, Korea and the United States reached an

understanding regarding procedures under Articles 21 and 22 of the DSU, under which each party agreed

it would accept a report by the compliance panel without appeal.

United States – Countervailing Measures on Supercalendered Paper from Canada (DS505)

On March 30, 2016, Canada requested consultations with the United States to consider claims related to

U.S. countervailing duties on supercalendered paper from Canada (Investigation C-122-854).

Consultations between the United States and Canada took place in Washington, D.C. on May 4, 2016.

On June 9, 2016, Canada requested the establishment of a panel challenging certain actions of Commerce

with respect to the countervailing duty investigation and final determination, the countervailing duty order,

and an expedited review of that order. The Panel request also presented claims with respect to alleged U.S.

“ongoing conduct” or, in the alternative, a purported rule or norm, with respect to the application of facts

available in relation to subsidies discovered during the course of a countervailing duty investigation.

Canada alleged that the U.S. measures at issue were inconsistent with obligations under Articles 1.1(a)(1),

1.1(b), 2, 10, 11.1, 11.2, 11.3, 11.6, 12.1, 12.2, 12.3, 12.7, 12.8, 14, 14(d), 19.1, 19.3, 19.4, 22.3, 22.5, and

32.1 of the SCM Agreement; and Article VI:3 of the GATT 1994.

A panel was established on July 21, 2016. On August 31, 2016, the Panel was composed by the Director-

General to include: Mr. Paul O’Connor, Chair; and, Mr. David Evans and Mr. Colin McCarthy, Members.

The Panel met with the parties on March 21 and March 22, 2017, and on June 13 and June 14, 2017. The

Panel report was circulated on July 5, 2018. The Panel report, among other things, upheld Canada’s claims

that there was “ongoing conduct” with respect to Commerce’s treatment of subsidies that Canadian

respondents refused to disclose in response to Commerce questionnaires, but which Commerce

subsequently discovered during verification in the course of the countervailing duty investigation. The

Panel report also found that such treatment was inconsistent with Article 12.7 of the SCM Agreement.

Commerce terminated the countervailing duties on July 5, 2018.

On August 27, 2018, the United States notified the DSB of its decision to appeal the Panel’s findings related

to the alleged “ongoing conduct” and to the treatment of undisclosed subsidies discovered during the course

of a countervailing duty investigation. The persons hearing the appeal were Ujal Singh Battia as Presiding

Member, and Thomas R. Graham and Hong Zhao. A hearing was held in Geneva on November 4 and 5,

2019, and an appellate report was issued on February 6, 2020. The document contains a majority view

upholding the findings of the Panel and also a separate opinion that calls into question the reasoning and

interpretative analysis of the appellate majority concerning “ongoing conduct.”

The DSB considered the appellate document and panel report at its meeting on March 5, 2020. The United

States noted in its DSB statement that there were serious procedural and substantive concerns with the

appellate document, and objected to the adoption of the document as an Appellate Body Report. The United

States explained that the document cannot be an Appellate Body report because the Chinese national who

served on the appeal was not a valid member of the Appellate Body given that the individual is affiliated

with the Government of China, in breach of Article 17.3 of the DSU. The concern related to the individual’s

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service was further compounded because the appeal directly implicated the interests of the Government of

China. The United States also reiterated its concerns of ex-Appellate Body members’ continuation of

service without authorization by the DSB, and the failure to adhere to the deadline in Article 17.5 of the

DSU. Accordingly, the United States did not join in a consensus to adopt the document and report that

were before the DSB. The United States explained that because there was no valid Appellate Body report

in this dispute, the document and report could only be adopted by positive consensus. Because there was

no consensus on adoption, the DSB did not validly adopt any document and report in this dispute, and

therefore there was no valid recommendation of the DSB with which to bring a measure into conformity

with a covered agreement.

On June 18, 2020, Canada requested authorization to suspend concessions and other obligations pursuant

to Article 22.2 of the DSU. On June 26, 2020, the United States objected to Canada’s request, referring the

matter to arbitration pursuant to Article 22.6 of the DSU. On August 6, 2020, the WTO notified the parties

that the arbitration would be carried out by the panelists who served during the panel proceeding: Mr. Paul

O’Connor, Chair; and, Mr. David Evans and Mr. Colin McCarthy, Members. The Arbitrator held a virtual

hearing with the Parties in September 2021. The Arbitrator’s decision was circulated on July 13, 2022.

The Arbitrator adopted the U.S. economic model as the basis for determining a future level of nullification

or impairment, and rejected Canada’s proposed formula as the basis of the Arbitrator’s award. However,

during the arbitration, the United States disputed Canada’s ability to pursue countermeasures and the

Arbitrator’s ability to issue a decision, given that the challenged “ongoing conduct” measure had been

removed with the revocation of the CVD order. The United States argued that Canada did not suffer from

any economic harm from the disputed conduct, and may never experience any economic effect. Therefore,

following the issuance of the Arbitrator’s decision, there was no monetary award for Canada to seek based

on the CVD order on supercalendered paper.

United States – Certain Measures Relating to the Renewable Energy Sector (DS510)

On September 9, 2016, India requested WTO consultations regarding alleged domestic content requirement

and subsidy measures maintained under renewable energy programs in the States of California,

Connecticut, Delaware, Massachusetts, Michigan, Minnesota, Montana, and Washington.

India’s request alleges the U.S.-state measures are inconsistent with: Articles III:4, XVI:1, and XVI:4 of

the GATT 1994; Article 2.1 and 2.2 of the TRIMS Agreement; and, Articles 3.1(b), 3.2, 5(a), 5(c), 6.3(a),

6.3(c), and 25 of the SCM Agreement. Consultations between India and the United States took place in

Geneva on November 16 and November 17, 2016.

A panel was established on March 21, 2017. On April 11, 2018, India requested the Director-General to

compose the Panel. On April 21, 2018, the Panel was composed by the Director-General to include: Mr.

Alberto Juan Dumont, Chair; and, Ms. Penelope Jane Ridings and Mr. Miguel Rodriguez Mendoza,

Members.

The Panel circulated its report on June 27, 2019. The Panel found that certain measures maintained by the

States of California, Massachusetts, Minnesota, and Washington were not within its terms of reference.

With respect to the other measures, the Panel found that each of the measures was inconsistent with Article

III:4 of the GATT 1994 because it accorded less favorable treatment to imported products as compared to

like domestic products. The Panel exercised judicial economy on India’s claims under Articles 2.1 and 2.2

of the TRIMS Agreement and Articles 3.1(b) and 3.2 of the SCM Agreement.

On August 15, 2019, the United States notified the DSB of its decision to appeal certain issues of law and

legal interpretations in the panel report. On August 20, 2019, India notified the DSB of its decision to

appeal.

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United States – Measures Related to Price Comparison Methodologies (DS515)

On December 12, 2016, China requested consultations with the United States regarding its use of a non-

market economy (NME) methodology in the context of antidumping investigations involving Chinese

producers. In its request, China asserts that WTO Members were required to terminate the use of an NME

methodology by December 11, 2016, and thereafter apply the provisions of the Antidumping Agreement

and the GATT 1994 to determine normal value.

Specifically, China alleges that the following “measures” are inconsistent with Articles 2.1, 2.2, 9.2, 18.1,

and 18.4 of the Antidumping Agreement and Articles I:1, VI:1, and VI:2 of GATT 1994:

 Sections 771(18) and 773 of the Tariff Act of 1930, as amended;

 Part 351.408 of Commerce’s regulations, 19 C.F.R. § 351.408;

 Commerce’s 2006 determination that China is a ‘non-market economy” for purposes of the Tariff

Act of 1930, as amended;

 The failure of the United States, by way of omission, to revoke the 2006 determination or otherwise

modify its laws with respect to antidumping investigations and reviews of Chinese products

initiated and/or resulting in preliminary or final determinations after December 11, 2016.

China also challenged Section 773(e) of the Tariff Act of 1930 – the constructed value provision that applies

to market economies – to the extent that it permits the use of “surrogate values.” Consultations took place

on February 7 and February 8, 2017, in Geneva.

China requested supplemental consultations on November 3, 2017, which took place on January 4, 2018,

in Geneva. As part of its supplemental consultations request, China further alleged that certain of the

following “measures” were also inconsistent with: Articles 2.1, 2.2, 5.2, 5.3, 7.1(ii), 9.2, 9.3, 11.1, 11.2,

11.3, 18.1, and 18.4 of the Antidumping Agreement; Articles I:1, VI:1, and VI:2 of GATT 1994; and,

Article XVI:4 of the Marrakesh Agreement Establishing the WTO:

 Commerce’s 2017 determination that China is a “non-market economy” for purposes of the Tariff

Act of 1930, as amended;

 The policy or practice of using surrogate values to determine normal value in both original and

administrative review determinations in antidumping proceedings involving Chinese products,

whether that conduct is pursuant to Section 773(c) of the Tariff Act, Section 773(e), or any other

provision of U.S. law;

 Certain named Commerce final determinations of normal value in antidumping investigations or

administrative reviews of Chinese imports made subsequent to December 11, 2016, which were

based on the use of “surrogate values”;

 Commerce’s preliminary affirmative determinations in Certain Hardwood Plywood Products

From the People’s Republic of China (June 23, 2017), Certain Aluminum Foil From the People’s

Republic of China (October 26, 2017), and Carton-Closing Staples from the People’s Republic of

China (October 27, 2017);

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 Certain named Commerce final determinations in sunset reviews in which Commerce relied on

margins of dumping calculated on the basis of “surrogate values”;

 The policy or practice of making final determinations in sunset reviews of antidumping orders

applicable to Chinese products relying on margins of dumping calculated on the basis of surrogate

values, whether pursuant to Section 773(c) of the Tariff Act of 1930, Section 773(e), or any other

provision of U.S. law; and,

 The failure of Commerce, by way of omission, to conduct “reviews based on changed

circumstances” pursuant to Section 751(b) of the Tariff Act in the antidumping investigations of

Chinese products, by virtue of the expiration of Section 15(a)(ii) of China’s Accession Protocol.

China further added that the measures at issue are “not justifiable” under the second Supplementary

Provision of Article VI:1 of GATT 1994, as referenced in Article 2.7 of the Antidumping Agreement. The

parties consulted in December 2016 and November 2017, but China has not moved forward with panel

proceedings.

United States – Countervailing Measures on Certain Pipe and Tube Products from Turkey (DS523)

On March 8, 2017, Turkey requested consultations concerning CVD measures imposed by the United States

pursuant to four final CVD determinations issued by Commerce pertaining to certain pipe and tube

products. Turkey alleges inconsistencies with Articles 1.1(a)(1), 1.1(b), 2.1(c), 2.4, 10, 12.7, 14(d), 15.3,

19.4, and 32.1 of the SCM Agreement, and Article VI:3 of the GATT 1994.

Turkey challenges the application of measures in four final CVD determinations with respect to the

provision of hot-rolled steel for less than adequate remuneration. Specifically, Turkey challenges

Commerce’s “public bodies” determination, use of facts available, and determination of specificity of the

subsidy program. Turkey also challenges Commerce’s calculation of benchmarks, both as applied and “as

such.” With respect to injury, Turkey challenges the USITC’s “practice” of cross-cumulating imports, as

well as the application of that practice in the underlying determinations.

Consultations between the United States and Turkey took place in Geneva on April 28, 2017. A panel was

established on June 19, 2017, and on September 14, 2017, the Director-General composed the Panel as

follows: Mr. Guillermo Valles, Chair; and, Ms. Luz Elena Reyes de la Torre and Mr. Jose Antonio de la

Puente Leon, Members.

The Panel circulated its report on December 18, 2018. With respect to public body, the Panel found that

Commerce acted inconsistently with Article 1.1(a)(1) by failing to apply the standard set out previously by

the Appellate Body, and failing to establish based on record evidence that the relevant entities were public

bodies. With respect to benchmarks as such, the Panel rejected Turkey’s claims that Commerce has a

practice of rejecting in-country benchmarks solely based on majority or substantial government ownership

or control of the market. For benchmarks as applied, the Panel declined to make a finding under Article

14(d) of the SCM Agreement because the relevant determination had ceased to have legal effect prior to

the Panel’s establishment. With respect to specificity, the Panel found that Commerce acted inconsistently

with Articles 2.1(c) and 2.4 of the SCM Agreement by failing to identify and clearly substantiate the

existence of a subsidy program, and failing to take into account the extent of diversification of Turkey’s

economy and the length of time in which the program had been in place. With respect to facts available,

the Panel found Commerce acted inconsistently with Article 12.7 of the SCM Agreement by failing to do

a comparative process of reasoning and evaluation before selecting from the facts available in certain

circumstances. With respect to injury, the Panel found that Article 15.3 of the SCM Agreement does not

permit the USITC to assess cumulatively the effects of imports not subject to CVD investigations with the

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effects of imports subject to CVD investigations. The Panel thus found cross-cumulation by the USITC,

both in the original investigations at issue and as a practice, to be inconsistent with Article 15.3. With

respect to cross-cumulation in sunset reviews, the Panel found the USITC did not act inconsistently with

Article 15.3 of the SCM Agreement, either “as such” or in connection with the sunset review at issue.

On January 25, 2019, the United States notified the DSB of its decision to appeal certain legal conclusions

and interpretations of the Panel. On January 30, 2019, Turkey also filed an appeal. The persons hearing

this appeal had been Ujal Singh Bhatia as Presiding Member, and Thomas Graham and Hong Zhao.

United States – Countervailing Measures on Softwood Lumber from Canada (DS533)

On November 28, 2017, the United States received from Canada a request for consultations pertaining to

the final determination issued by Commerce following a CVD investigation regarding softwood lumber

from Canada. Canada claimed that Commerce’s determination is inconsistent with U.S. commitments and

obligations under Articles 1.1(a), 1.1(b), 2.1(a), 2.1(b), 10, 11.2, 11.3, 14(d), 19.1, 19.3, 19.4, 21.1, 21.2,

32.1, and 32.5 of the SCM Agreement; and, Article VI:3 of the GATT 1994. Specifically, Canada

challenged Commerce’s determinations regarding benchmarks for stumpage, log export permitting

processes, and non-stumpage programs.

The United States and Canada held consultations on January 17, 2018. At Canada’s request, the WTO

established a panel on April 9, 2018. On July 6, 2018, the Director-General composed the panel as follows:

Ms. Enie Neri de Ross, Chair; and, Mr. Gustav Brink and Mr. Alberto Trejos, Members. As of December

2022, Panel proceedings were ongoing.

The Panel circulated its report on August 24, 2020. The Panel found that Commerce’s determinations

regarding benchmarks for stumpage, log export permitting processes, and non-stumpage programs were

inconsistent with the SCM Agreement. The Panel effectively applied the WTO Appellate Body’s flawed

test for using out-of-country benchmarks in its analysis of benchmarks from within Canada that Commerce

used to measure the benefit of subsidies. The Panel also applied a heightened level of scrutiny in its review

of Commerce’s determination, in essence putting itself in the place of the investigating authority, contrary

to the terms of the SCM Agreement.

On September 28, 2020, the United States notified the DSB of its decision to appeal certain issues of law

covered in the panel report.

United States – Anti-Dumping Measures Applying Differential Pricing Methodology to Softwood

Lumber from Canada (DS534)

On November 28, 2017, the United States received from Canada a request for consultations pertaining to

the final determination issued by Commerce following an antidumping investigation regarding softwood

lumber from Canada. Canada claimed that Commerce’s determination is inconsistent with U.S.

commitments and obligations under Articles 1, 2.1, 2.4, and 2.4.2 of the Antidumping Agreement; and

Articles VI:1 and VI:2 of the GATT 1994. Specifically, Canada challenged Commerce’s application of a

differential pricing methodology, including the United States’ use of zeroing when applying the average-

to-transaction comparison methodology.

The United States and Canada held consultations on January 17, 2018. At Canada’s request, the WTO

established a panel on April 9, 2018. On May 22, 2018, the Director-General composed the Panel as

follows: Mr. Thinus Jacobsz, Chair; and, Ms. María Valeria Raiteri and Mr. Guillermo Valles, Members.

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The Panel circulated its report on April 9, 2019. The Panel found that Commerce’s use of zeroing when

applying the average-to-transaction comparison methodology was not inconsistent with the Antidumping

Agreement or the GATT 1994. Among other things, the Panel reasoned that nothing in the text of the

Antidumping Agreement directly addresses the use of zeroing. The Panel agreed with the United States

that, if the use of zeroing were prohibited in connection with the alternative, targeted dumping

methodology, then the alternative calculation methodology necessarily always would result in a margin of

dumping that is mathematically equivalent to that calculated using the normal calculation methodology,

which would render the alternative methodology useless. In coming to its conclusion, the Panel also

examined and disagreed with findings in prior WTO Panel and Appellate Body reports. The Panel

explained why it found the approach of those reports not persuasive.

The Panel also found that one aspect of Commerce’s differential pricing analysis, in which Commerce

aggregated differences in export prices across categories (i.e., purchasers, regions, and time periods) to find

a single pattern of export prices which differed significantly among different purchasers, regions, and time

periods, was inconsistent with the requirements of the Antidumping Agreement.

On June 4, 2019, Canada notified the DSB of its decision to appeal certain of the panel’s findings. The

persons hearing this appeal had been Hong Zhao as Presiding Member, and Ujal Singh Bhatia and Thomas

Graham.

United States – Certain Systemic Trade Remedies Measures from Canada (DS535)

On December 20, 2017, Canada requested consultations with the United States concerning certain laws,

regulations, and practices that Canada claims are maintained by the U.S. in its AD and CVD proceedings.

Specifically, Canada alleged that the United States: (1) failed to implement WTO-inconsistent findings by

liquidating final duties in excess of WTO-consistent rates, and failed to refund cash deposits collected in

excess of WTO-consistent rates; (2) retroactively collected provisional AD and CVD duties following

preliminary affirmative critical circumstances determinations; (3) treated export controls as a financial

contribution and improperly initiated investigations into and/or imposed duties; (4) improperly calculated

the benefit in determining whether there is a provision of goods for less than adequate remuneration; (5)

effectively closed the evidentiary record before the preliminary determination and failed to exercise its

discretion to accept additional factual information; and, (6) created an institutional bias in favor of

affirmative results in injury, threat of injury, or material retardation when the commissioners of the U.S.

International Trade Commission are evenly divided on whether a determination should be affirmative or

negative.

Canada claims these alleged measures are inconsistent with Articles VI (in particular, VI:2 and VI:3) and

X:3(a) of the GATT 1994; Articles 1, 3.1, 6 (in particular, 6.1, 6.2, and 6.9), 7 (in particular, 7.4 and 7.5),

9 (in particular, 9.2, 9.3, 9.3.1, and 9.4), 10 (in particular, 10.1 and 10.6), 11 (in particular 11.1 and 11.2),

18 (in particular, 18.1 and 18.4) of the Antidumping Agreement; Articles 1 (in particular, 1.1(a) and 1.1(b)),

10, 11 (in particular, 11.2, 11.3, and 11.6), 12 (in particular, 12.1 and 12.8), 14(d), 15.1, 17 (in particular,

17.3, 17.4, and 17.5), 19 (in particular, 19.1, 19.3 and 19.4), 20 (in particular, 20.1 and 20.6), 21 (in

particular, 21.1 and 21.2), and 32 (in particular, 32.1 and 32.5) of the SCM Agreement; and, Articles 21.1

and 21.3 of the DSU.

Consultations between the United States and Canada took place on February 6, 2018.

United States — Anti-Dumping Measures on Fish Fillets from Vietnam (DS536)

On January 8, 2018, Vietnam requested consultations concerning anti-dumping measures on fish fillets

from Vietnam. Vietnam claimed that Commerce’s determinations, as well as certain methodologies used

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by Commerce, are inconsistent with U.S. obligations under Articles 1, 2.1, 2.4, 2.4.2, 6, 9, 11, 17.6, and

Annex II of the Antidumping Agreement; Articles I:1, VI:1, VI:2, and X:3(a) of the GATT 1994; and,

Vietnam’s Protocol of Accession. The United States and Vietnam held consultations on March 1, 2018,

but were unable to resolve the dispute. On June 8, 2018, Vietnam requested the establishment of a panel.

The DSB established a panel on July 20, 2018. On December 3, 2018, the Director-General composed the

panel as follows: Mr. José Alfredo Graça Lima, Chair; and, Mr. Shahid Bashir and Mr. Greg Weppner,

Members. The Panel met with the parties on May 8 and May 9, 2019, and on August 6 and August 7, 2019.

In 2020 and continuing in 2021 and 2022, the United States and Vietnam have, on several occasions, jointly

informed the panel that they remain engaged in discussions with respect to the resolution of this dispute

and requested that the panel postpone circulation of the final report. The Panel has accepted these requests.

United States – Anti-Dumping and Countervailing Duties on Certain Products and the Use of Facts

Available (DS539)

In February 2018, Korea requested WTO dispute settlement consultations regarding Commerce’s use of

facts available in certain antidumping and countervailing duty measures against Korea, and certain laws,

regulations, and other measures maintained by the United States with respect to the use of facts available

in antidumping and countervailing duty proceedings. The United States and Korea held consultations in

March 2018, but those consultations failed to resolve the dispute. On April 27, 2018, Korea requested the

establishment of a panel. On May 28, 2018, the DSB established a panel. Following agreement of the

parties, a panel was composed on December 5, 2018 as follows: Ms. Marta Lemme, Chair; and Ms. Leonora

Blumberg and Mr. Matthew Kennedy, Members.

The Panel circulated its report on January 21, 2021. The Panel found that Commerce acted inconsistently

with the Antidumping Agreement, or SCM Agreement, in either resorting to facts available or selecting the

replacement facts in the eight instances challenged by Korea. With respect to the “as such” claim against

an alleged unwritten measure, the panel found that Korea failed to establish that such an unwritten rule even

existed. This obviated the Panel’s need to evaluate whether such a rule (if it did exist) would breach the

Antidumping Agreement or SCM Agreement.

On March 19, 2021, the United States notified the DSB of its decision to appeal certain issues of law

covered in the panel report.

United States – Tariff Measures on Certain Goods from China (DS543)

On April 4, 2018, China requested consultations with the United States concerning certain tariff measures

on Chinese goods that the United States might implement under Section 301-310 of the U.S. Trade Act of

1974. China alleged that the tariff measures are inconsistent with U.S. commitments and obligations under

Articles I:1, II:1(a), and II:1(b) of the GATT 1994 and Article 23 of the DSU. On July 6, July 16, and

September 18, respectively, China requested additional consultations regarding tariff measures imposed

under Section 301 that supplemented its original consultations request of April 4, 2018. The United States

and China held consultations in Geneva on August 28 and October 22, 2018.

At China’s request, the WTO established a panel on January 28, 2019. On June 3, 2019 the Panel was

composed by the Director-General. Following the resignation of a panelist on September 25, 2019, the

Director-General appointed a new panelist on October 17, 2019. The Panel includes: Mr. Alberto Juan

Dumont, Chair; and, Mr. Álvaro Espinoza and Ms. Athaliah Lesiba Molokomme, Members.

The Panel circulated its report on September 15, 2020. The Panel concluded that the tariff measures at

issue are inconsistent with Article I:1 of the GATT 1994 (MFN), because they fail to provide treatment for

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Chinese products that is no less favorable than that granted to like products originating from other WTO

Members, and with Articles II:1(a) and (b) of the GATT 1994, because the additional duties are in excess

of the bound rates found in the U.S. Schedule.

On October 27, 2020, the United States notified the DSB of its decision to appeal certain issues of law

covered in the panel report.

United States – Certain Measures on Steel and Aluminum Products (DS544)

On April 5, 2018, China requested consultations concerning certain duties that the United States had

imposed under Section 232 of the Trade Expansion Act of 1962, as amended, on imports of steel and

aluminum products that threaten to impair U.S. national security. China claimed that imposition of the

duties breached various provisions of the GATT 1994, and the Agreement on Safeguards. The United

States and China held consultations on July 19, 2018, but the consultations failed to resolve the dispute. At

China’s request, the WTO established a panel on November 21, 2018. On January 25, 2019, the Panel was

composed by the Director-General to include: Mr. Elbio Rosselli, Chair; and, Mr. Esteban B. Conejos, Jr.

and Mr. Rodrigo Valenzuela, Members.

The Panel circulated its final report on December 9, 2022. The Panel concluded that the Section 232

measures are inconsistent with Article I of the GATT 1994 because exemptions for certain countries from

Section 232 tariffs confer an advantage to products from those countries that have not been accorded

immediately and unconditionally to like products from all other Members, and with Article II:1(a) and

Article II:1(b) of the GATT 1994 because the Section 232 duties do not accord the treatment provided for

in the United States’ Schedule. The Panel rejected the complainant’s claims under Article XIX of the

GATT 1994 and the Agreement on Safeguards because the measures at issue are not safeguard measures,

as they were sought, taken, or maintained pursuant to a provision of the GATT 1994 other than Article

XIX, namely Article XXI of the GATT 1994. The Panel disagreed with the long-standing U.S.

interpretation that the essential security exception is self-judging and concluded that the measures at issue

were not “taken in time of war or other emergency in international relations” within the meaning of Article

XXI(b)(iii). Accordingly, the Panel found that the Section 232 measures were not justified under Article

XXI(b)(iii) of the GATT 1994. In response to the reports, the United States rejected the Panel’s flawed

interpretation and conclusions and reiterated that the United States has held the clear and unequivocal

position, for over 70 years, that issues of national security cannot be reviewed in WTO dispute settlement

and the WTO has no authority to second-guess the ability of a WTO Member to respond to a wide-range

of threats to its security.

United States – Safeguard Measure on Imports of Crystalline Silicon Photovoltaic Products (DS545)

On May 14, 2018, Korea requested consultations with the United States concerning a safeguard measure

imposed by the United States on imports of CSPV products. Korea claimed that the measure appears to be

inconsistent with Articles 1, 2.1, 3.1, 3.2, 4.1, 4.2, 5.1, 5.2, 7.1, 7.4, 8.1, 12.1, 12.2, and 12.3 of the

Agreement on Safeguards; and, Articles II:1, X:3, XIII, and XIX:1(a) of the GATT 1994. China, the EU,

Malaysia, and Thailand requested to join the consultations, and the United States accepted each request.

Consultations were held on June 26, 2018.

At Korea’s request, the WTO established a panel on September 26, 2018.

United States – Safeguard Measure on Imports of Large Residential Washers (DS546)

On May 14, 2018, Korea requested consultations with the United States concerning a safeguard measure

imposed by the United States on imports of large residential washers. Korea claimed that the measure

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appears to be inconsistent with Articles 1, 2.1, 2.2, 3.1, 3.2, 4.1, 4.2, 5.1, 7.1, 7.4, 8.1, 12.1, 12.2, and 12.3

of the Agreement on Safeguards; and Articles I:1, II, X:3 and XIX:1(a) of the GATT 1994. Thailand

requested to join consultations, and the United States accepted Thailand’s request. Consultations were held

on June 26, 2018.

At Korea’s request, the WTO established a panel on September 26, 2018. On July 1, 2019, the Panel was

composed by the Director-General to include: Mr. Alexander Hugh McPhail, Chair; and, Mr. Welber

Oliveira Barral and Ms. Stephanie Sin Far Lee, Members.

On February 8, 2022, the panel rejected certain of Korea’s claims, including against aspects of the ITC’s

serious injury investigation, the President’s chosen form of the safeguard measure, and whether the United

States timely notified key decisional points in the safeguard investigation. However, the panel found certain

aspects of the ITC’s serious injury determination were WTO-inconsistent. The panel also found that the

United States acted inconsistently with the WTO Agreement on Safeguards by not providing Korea with

sufficient time to allow for the possibility, through consultations, for meaningful consultations between

announcement of the final safeguard measure and the date it took effect. The United States and Korea have

been engaged in dialogue to attempt to resolve this dispute. To facilitate such dialogue, the parties have

jointly requested the WTO Dispute Settlement Body to extend the deadline to either adopt or appeal the

panel report. The most recent extension expires on February 27, 2023.

United States – Certain Measures on Steel and Aluminum Products (DS547)

On May 18, 2018, India requested consultations concerning certain duties that the United States had

imposed under Section 232 of the Trade Expansion Act of 1962, as amended, on imports of steel and

aluminum products that threaten to impair U.S. national security. India claimed that imposition of the duties

breached various provisions of the GATT 1994 and the Agreement on Safeguards. The United States and

India held consultations on July 20, 2018, but the consultations failed to resolve the dispute. At India’s

request, the WTO established a panel on December 4, 2018. On January 25, 2019, the Panel was composed

by the Director-General to include: Mr. Elbio Rosselli, Chair; and, Mr. Esteban B. Conejos, Jr. and Mr.

Rodrigo Valenzuela, Members. As of December 2022, Panel proceedings were ongoing.

United States – Certain Measures on Steel and Aluminum Products (DS548)

On June 1, 2018, the EU requested consultations concerning certain duties that the United States had

imposed under Section 232 of the Trade Expansion Act of 1962, as amended, on imports of steel and

aluminum products that threaten to impair U.S. national security. The EU claimed that imposition of the

duties breached various provisions of the GATT 1994 and the Agreement on Safeguards. The United States

and the EU held consultations on July 19, 2018, but the consultations failed to resolve the dispute. At the

EU’s request, the WTO established a panel on November 21, 2018. On January 25, 2019, the Panel was

composed by the Director-General to include: Mr. Elbio Rosselli, Chair; and, Mr. Esteban B. Conejos, Jr.

and Mr. Rodrigo Valenzuela, Members.

In November 2021, the United States and the EU announced arrangements on steel and aluminum, including

U.S. TRQs for EU steel and aluminum products free of duties under Section 232. The EU requested that

the Panel suspend its work. The United States informed the Panel that it did not object to that request, and

the Panel granted it. Pursuant to that agreement, the United States and the EU mutually agreed to resort to

arbitration regarding the matter pending before the Panel in this dispute. Upon composition of the

Arbitrator, the arbitration was immediately and indefinitely suspended and the dispute before the Panel was

terminated.

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On January 17, 2022, the EU and the United States notified the DSB that they were terminating this dispute

before the panel in light of the agreed procedures for arbitration under Article 25 of the DSU. On January

20, 2022, the Chair of the Panel informed the DSB that it had ceased all work in these proceedings.

On January 17, 2022, the EU and the United States notified the DSB that they had agreed, pursuant to

Article 25.2 of the DSU, to resort to arbitration on the matter pending before the Panel in this dispute. The

Arbitrator was composed on January 20, 2022 with the same persons who served as members of the Panel.

As provided in the Parties' communication of January 17, 2022, the arbitration was suspended.

United States – Certain Measures on Steel and Aluminum Products (DS552)

On June 13, 2018, Norway requested consultations concerning certain duties that the United States had

imposed under Section 232 of the Trade Expansion Act of 1962, as amended, on imports of steel and

aluminum products that threaten to impair U.S. national security. Norway claimed that imposition of the

duties breached various provisions of the GATT 1994 and the Agreement on Safeguards. The United States

and Norway did not hold consultations. At Norway’s request, the WTO established a panel on November

21, 2018. On January 25, 2019, the Panel was composed by the Director-General to include: Mr. Elbio

Rosselli, Chair; and, Mr. Esteban B. Conejos, Jr. and Mr. Rodrigo Valenzuela, Members.

The Panel circulated its final report on December 9, 2022. The Panel concluded that the Section 232

measures are inconsistent with Article I of the GATT 1994, because exemptions for certain countries from

Section 232 tariffs confer an advantage to products from those countries that has not been accorded

immediately and unconditionally to like products from all other Members, and with Article II:1(a) and

Article II:1(b) of the GATT 1994 because the Section 232 duties do not accord the treatment provided for

in the United States’ Schedule. The Panel also concluded that the Section 232 measures were inconsistent

with Article XI:1 of the GATT 1994 because by imposing import quotas on steel and aluminum from certain

countries, the United States has instituted prohibitions or restrictions other than duties, taxes or other

charges on the importation of those products of the territory of those members. The Panel rejected the

complainant’s claims under Article XIX of the GATT 1994 and the Agreement on Safeguards because the

measures at issue are not safeguard measures, as they were sought, taken, or maintained pursuant to a

provision of the GATT 1994 other than Article XIX, namely Article XXI of the GATT 1994.

The Panel disagreed with the long-standing U.S. interpretation that the essential security exception is self-

judging and concluded that the measures at issue were not “taken in time of war or other emergency in

international relations” within the meaning of Article XXI(b)(iii). Accordingly, the Panel found that the

Section 232 measures were not justified under Article XXI(b)(iii) of the GATT 1994. In response to the

reports, the United States rejected the Panel’s flawed interpretation and conclusions and reiterated that the

United States has held the clear and unequivocal position, for over 70 years, that issues of national security

cannot be reviewed in WTO dispute settlement and the WTO has no authority to second-guess the ability

of a WTO Member to respond to a wide-range of threats to its security.

United States – Certain Measures on Steel and Aluminum Products (DS554)

On June 29, 2018, Russia requested consultations concerning certain duties that the United States had

imposed under Section 232 of the Trade Expansion Act of 1962, as amended, on imports of steel and

aluminum products that threaten to impair U.S. national security. Russia claimed that imposition of the

duties breached various provisions of the GATT 1994 and the Agreement on Safeguards. The United States

and Russia held consultations on August 30, 2018, but the consultations failed to resolve the dispute. At

Russia’s request, the WTO established a panel on November 21, 2018. On January 25, 2019, the Panel was

composed by the Director-General to include: Mr. Elbio Rosselli, Chair; and, Mr. Esteban B. Conejos, Jr.

and Mr. Rodrigo Valenzuela, Members. In April 2022, following Russia’s premeditated and unprovoked

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full-scale invasion of Ukraine in violation of international law, the United States suspended permanent

normal trade relations with Russia and will continue to partner with other WTO Members to isolate and

ostracize Russia in the WTO and other multilateral institutions.

United States – Certain Measures on Steel and Aluminum Products (DS556)

On July 9, 2018, Switzerland requested consultations concerning certain duties that the United States had

imposed under Section 232 of the Trade Expansion Act of 1962, as amended, on imports of steel and

aluminum products that threaten to impair U.S. national security. Switzerland claimed that imposition of

the duties breached various provisions of the GATT 1994 and the Agreement on Safeguards. The United

States and Switzerland held consultations on August 30, 2018, but the consultations failed to resolve the

dispute. At Switzerland’s request, the WTO established a panel on December 4, 2018. On January 25,

2019, the Panel was composed by the Director-General to include: Mr. Elbio Rosselli, Chair; and, Mr.

Esteban B. Conejos, Jr. and Mr. Rodrigo Valenzuela, Members.