-------------- S -------------- SAFEGUARDS. Temporary and selective measures (such as increased tariffs, tariff quotas or quantitative restrictions) explicitly designed to slow imports in order to enable a particular industry to adjust to heightened competition from foreign suppliers. Safeguard actions are known in the United States as "escape clause" actions, and authority to take such actions is provided for in various U.S. laws. GATT Article XIX -- entitled "Emergency Action on Imports of Particular Products" -- recognizes a country's right to withdraw or modify concessions granted earlier, or to impose new restrictions, if a product is "being imported in such increased quantities...as to cause or threaten serious injury to domestic producers" and to maintain such restrictions "for such time as may be necessary to prevent or remedy such injury." Exporters have a complementary right under GATT not to be deprived arbitrarily of access to foreign markets. Under the Uruguay Round trade accord, GATT member countries strengthened safeguard rules by clarifying existing guidelines and tightening timetables. The duration of a safeguard measure has been limited (to a maximum of eight years), as has the degree of protection it provides. GATT members also agreed to prohibit "gray area measure" (such as voluntary export restraints, orderly marketing arrangements, and other informal trade-limiting agreements designed to curtail fairly traded imports), and to phase out all such pre-existing measures within four years of the July 1, 1995 entry into force of the new World Trade Organization. All countries do, however, receive one exception that it can keep in place until January 1, 2000. There are certain exceptions for developing countries. Safeguard measures can only be applied against a product originating in a developing country if the developing country's share of imports exceeds a certain percentage of the total imports to a country and the combined import share of developing countries is not more than a certain percentage of total imports. Also developing countries may apply a safeguard measure for up to 10 years -- two years longer than that permitted to industrial countries. See also Adjustment; Codes of Conduct; Competitive; Concession; Escape Clause;Framework Agreement; General Agreement on Tariffs and Trade; Market Access; Protectionism; Quantitative Restrictions; Specials and Differential Treatment; Tokyo Round; and Trade Act of 1974. SALES TAX. A tax levied on the exchange of goods and services at one or more stages in the process of distribution. See also Distribution; Indirect Tax; and Value Added Tax. SANCTIONS. See Embargo. SCHEDULE. See Concession; Demand; Supply; and Tariff Schedules. SCHEDULE OF CONCESSIONS. See Bound Rates; Concession; and Tariff Schedules of the United States. SCHUMAN PLAN. See European Coal and Steel Community. SDRs. See Special Drawing Rights. SECTION 22 (OF THE AGRICULTURAL ADJUSTMENT ACT OF 1933, AS AMENDED). Authorizes the U.S. president to impose quantitative restrictions on imports of agricultural products when such imports appear likely to affect price support programs operated by the U.S. Department of Agriculture. The president has imposed such quotas on imports of wheat and flour, cotton, lint, peanuts, cheese, butter and other dairy products. In 1956 the Contracting Parties of GATT authorized a waiver of Article XI prohibitions against quantitative restrictions for U.S. actions under Section 22. Since that time, the United States has submitted an annual report to the Contracting Parties on all relevant actions and the reasons for them. See also Public Law 480; Quantitative Restrictions; and Waiver. SECTION 201 OF THE TRADE ACT OF 1974. Section 201 is the United States' implementation of Article XIX, the "escape clause," of the GATT Under Section 201, the U.S. International Trade Commission (USITC) investigates whether an article is being imported into the United States in such increased quantities, absolute or relative to domestic production,as to be a substantial cause of serious injury, or threat thereof, to a domestic industry. The president has discretion to follow the USITC's recommendation on relief, which cannot exceed a total period of eight years, including extensions. Relief normally takes the form of increased duties or quantitative restrictions. See also Escape Clause; Safeguards; and Trade Act of 1974. SECTION 203 (OF THE TRADE ACT OF 1974). See Escape Clause; and Trade Act of 1974. SECTION 232 INVESTIGATIONS. Under Section 232 of the Trade Expansion Act of 1962, as amended, the U.S. Department of Commerce's Bureau of Export Administration conducts investigations of the effect of imports on U.S. national security. Investigations may be initiated based on a request of an interested party, or may be self-initiated by the Commerce Department. Among the most important criteria considered are: *requirements of the defense and essential civilian sectors; *maximum domestic production capacity; *quantity, quality and availability of imports; *impact of foreign competition on the economic welfare of the essential domestic industry; *other factors relevant to the unique circumstances of the specific case. The secretary of commerce has 270 days to present his/her findings and recommendations to the president. During this time, the Commerce Department may provide the public with an opportunity to comment and present information and advice relevant to the application, if appropriate. Upon receipt of the Commerce Department report, the president has 90 days to determine whether he agrees with the Commerce Department's findings,and to determine whether to use his/her statutory authority to "adjust imports" to remove any identified national security threat. Commerce has had authority for conducting Section 232 investigations since 1980. See also Codes of Conduct; Non-Tariff Barriers; Non-Tariff Measures; Quantitative Restrictions; and Trade Expansion Act of 1962. SECTION 301. Section 301 is the provision of the Trade Act of 1974, as amended, which gives the U.S. trade representative the authority to negotiate to eliminate a large range of foreign trade practices. The authority to take such action requires a finding that a foreign government has denied U.S. rights under a trade agreement, or has taken action that is inconsistent with, or otherwise denies benefits to the United States under a trade agreement; or engaged in an act, policy or practice that is unjustifiable, unreasonable or discriminatory and that burdens or restricts U.S. commerce. See also Concession; Export Subsidies; Special 301; Super 301; Trade Act of 1974; and Unfair Trade Practices. SECTION 332 OF THE TARIFF ACT OF 1930. Section 332 of the Tariff Act of 1930 provides the basic statutory authority for the U.S. International Trade Commission to conduct general fact-finding investigations and issue reports on any matter relating to trade. Such reports do not contain recommendations unless they have been specifically requested, and do not provide a legal basis for other trade actions by the president. Investigations conducted by the USITC under section 332 are instituted in response to a request from the Committee on Ways and Means of the U.S. House of Representatives, the Committee on Finance of the U.S. Senate, either branch of the Congress, the president, the U.S. trade representative under authority delegated by the president, or upon the Commission's own motion. See also Tariff Act of 1930. SECTION 337. Section 337 of the Tariff Act of 1930 protects U.S. industries from imports which infringe valid patents, copyrights, trademarks and other intellectual property rights. Parties can obtain relief in the form of cease and desist and exclusion orders if they succeed in showing they are a "domestic industry" under the statute and that their intellectual property right is valid and infringed. Economic injury does not need to be demonstrated regarding patents and federally registered trademarks, copyrights and semiconductor mask works. For other forms of intellectual property, economic injury must be demonstrated. The president may approve, disapprove or fail to disapprove any U.S. International Trade Commission (USITC) order within a 60-day review period. The president may disapprove a USITC exclusion order for policy reasons, which include the effect of the order on the public health and welfare, competitive conditions in the U.S. economy, the production of like or directly competitive items in the United States, the effect of the order on U.S. consumers and the impact of an order on foreign relations. See also Copyright; Intellectual Property; Patents; Tariff Act of 1930; Trademark; and Trade-Related Aspects of Intellectual Property. SECTION 406. Refers to Section 406 of the Trade Act of 1974 which was established to provide a remedy against market disruption caused by imports into the United States from communist countries. The provisions of Section 406, as amended by the Omnibus Trade and Competitiveness Act of 1988, are similar to those under Sections 201-203 of the Trade Act of 1974. However, Section 406 provides a lower standard of injury causation and, unlike Section 201,the investigation can be brought against imports from a specific country rather than all imports of a specific product. Section 406 requires the U.S. International Trade Commission (USITC) to investigate complaints filed by domestic industries or workers claiming that imports from a communist country are causing market disruption with respect to a domestically produced article. If the USITC finds that market disruption exists, it must recommend to the president relief in the form of temporary import restrictions in the form of tariffs, quotas, or tariff quotas to prevent or remedy such market disruption. See also Import Relief; Protectionism; Safeguards; Trade Act of 1974; and U.S. International Trade Commission. SECURITY. A document giving title to property as collateral for a bank loan. Also saleable income yielding paper traded in a stock exchange, such as stocks and shares. See also Broker; Capital Market; Commercial Paper; Loan; Property; and Spot Market. SECURITY CAPITAL. See Risk. SELECTIVE QUOTAS. See Quantitative Restrictions; and Safeguards. SELF-INITIATION. The Office of the U.S. Trade Representative (USTR) may self-initiate a section 301 investigation or may do so in response to a petition from an interested person. The USTR retains discretion whether or not to initiate an investigation. See also Section 301. SEMICONDUCTOR ARRANGEMENT. The U.S.-Japan Semiconductor Arrangement, which came into effect August 1, 1991, contains provisions to improve access to the Japanese market for foreign capital-affiliated semiconductor producers. It also provides for the expeditious processing by the U.S. government of anti-dumping complaints filed by domestic semiconductor producers. The arrangement, which replaced the 1986 Semiconductor Arrangement, is in force for five years. See also Bilateral Trade Agreement; Binding Concession; and Trade Agreement. SEMI-PROCESSED PRODUCT. See Primary Commodity; and Tariff Escalation. SENSITIVE PRODUCTS. Domestically produced goods considered economically and politically important in a country whose competitive position would be threatened if protection against the imports of similar goods were reduced. The steel and textiles industries in many developed countries, for example, employ large numbers of workers, often in communities that cannot in the short term offer alternative employment. For these reasons, there has been strong opposition to the reduction of tariff and other trade-restricting measures affecting sensitive products. See also Adjustment; Competitive; Escape Clause; Generalized System of Preferences; Liberalization; Linear Reduction of Tariffs; Orderly Marketing Agreements; Protection; and Textiles. SERVICES. Economic activities -- such as transportation, banking, insurance, tourism, telecommunications, advertising,the entertainment industry, data processing and consulting -- that are normally consumed as they are produced,as contrasted with economic goods that are more tangible. Service industries, which are usually labor intensive, have become increasingly important in domestic and international trade since at least the 1920s. Services account for about two-thirds of the economic activity of the United States, and a rapidly increasing percentage of U.S. exports. Traditional GATT rules have not applied the same discipline to restrain the imposition of non-tariff barriers to trade in services that has been applied to international trade in goods. The establishment, and incorporation into GATT, of disciplines on trade in services was one of the major objectives of the Uruguay Round. The Uruguay Round agreement establishes a framework to permit freer trade in over 140 sectors including construction and tourism. It sets some basic rules including national treatment, transparency and recognition requirements for purposes of permitting foreign nationals to be professionally licensed or certified in another market. Negotiations aimed at agreement in some sectors including financial services and maritime services are continuing in 1996. See also GATT Ministerial Meeting of 1982; Goods; Insurance; Invisible Trade; Price; Structural Change; Structural Impediments Initiative; Uruguay Round; and Utility. SINGLE-COLUMN TARIFF. A tariff schedule listing only one duty rate for each imported product. The United States maintained a single-column tariff schedule until 1909, when special preferences were instituted for products imported from Cuba and the Philippines. See also Column 1 Rates; Column 2 Rates; Preferences; Tariff; and Tariff Schedules of the United States. SMOOT-HAWLEY TARIFF ACT OF 1930. See Tariff Act of 1930. SNAPBACK. Snapback is a return to earlier and usually higher tariff levels. See also Tariff; and Tariff Schedules. SNPA. See Substantial New Program of Action. SOCIAL OVERHEAD CAPITAL. See Infrastructure. SOCIAL SECURITY CHARGES. See Direct Tax. SOCIALIST ECONOMIES. See State Trading Nations. SOFT LOAN. A credit providing for significantly easier repayment terms than credits that are normally obtainable from commercial banks. A soft loan frequently involves a grace period of several years and only a small servicing charge. See also Credit; Interest; International Development Association; Least Developed Countries; Loan; and Official Development Assistance. SOUTH. See Developing Countries. SOUTH-SOUTH TRADE. Trade between developing countries. See also Developing Countries; Economic Cooperation Among Developing Countries; and Global System of Trade Preferences. SPECIAL 301. Since May 1989 the U.S. trade representative (USTR) has implemented the so-called "special 301" intellectual property provision of the Omnibus Trade and Competitiveness Act of 1988. The special 301 authority is designed to formulate an overall strategy on intellectual property and market access, and to enhance the administration's ability to negotiate improvements in foreign intellectual property regimes through bilateral and/or multilateral initiatives. The statute requires the USTR to identify, on an annual basis, those foreign countries which deny adequate and effective protection of intellectual property rights or fair and equitable market access for Americans relying on intellectual property protection. Of those trading partners not making significant progress or entering into good faith negotiations, the countries that represent the most egregious cases may be identified as "priority foreign countries." Priority foreign countries are subject to investigation under section 301 conducted on an accelerated time frame. See also Concession; Intellectual Property; Omnibus Trade and Competitiveness Act of 1988; Section 301; and Trade Act of 1988. SPECIAL AND DIFFERENTIAL TREATMENT (S&D). The concept that exports of developing countries should be given preferential access to markets of developed countries, and that developing countries participating in trade negotiations need not fully reciprocate concessions they receive. This principle was first widely discussed during the Kennedy Round, leading to the adoption of Part IV of GATT, which obligated the developed countries to pursue trade policies that take into account the development needs of developing countries. The Tokyo Declaration subsequently proclaimed that exports of developing countries should receive particular benefits consistent with their trade, financial and development needs. Among proposals considered during the Tokyo Round negotiations for accomplishing this were: compensatory tariff reductions for exports of developing countries to offset any reductions in their margins of preference that might result from Tokyo Round tariff cuts; advance implementation of Tokyo Round tariff cuts affecting developing country exports; substantial reduction of elimination of tariff escalation; special provisions for developing country exports in any new codes of conduct covering non-tariff barriers; assurance that any new multilateral safeguard system would contain special provisions for developing country exports; and the principle that developed countries would expect less than full reciprocity for trade concessions granted to developing countries. The Framework Agreement concluded at the end of the Tokyo Round provides a legal basis for special and differential treatment in favor of exports from developing countries, and some of the codes of conduct negotiated in the Tokyo Round provided for such treatment. Under the Uruguay Round agreement, developing countries are given much longer than developed countries for phasing in trade liberalization measures in several areas including agriculture, intellectual property and investment. The Uruguay Round also strengthened pre-existing GATT rules regarding dumping and subsidization, and developing countries were given a longer timetable for coming into compliance with these rules. See also Codes of Conduct; Concession; Framework Agreement; General Agreement on Tariffs and Trade; Generalized System of Preferences; Margin of Preferences; Market Access; North-South Trade; Preferences; Reciprocity; Safeguards; Tariff Escalation; Tokyo Declaration; Tokyo Round; and Uruguay Round. SPECIAL DRAWING RIGHTS (SDRs). Created in 1969 by the International Monetary Fund (IMF) as a supplemental international monetary reserve asset, SDRs are available to governments through the IMF and may be used in transactions between the IMF and member governments. IMF member countries have agreed to regard SDRs as complementary to gold and reserve currencies in settling their international accounts. The unit value of an SDR reflects the foreign exchange value of a "basket" of currencies of several major trading countries (the U.S. dollar, the German mark, the French franc, the Japanese yen, and the British pound). The SDR has become the unit of account used by the IMF and several national currencies are pegged to it. Some commercial banks accept deposits denominated in SDRs. See also Currency; International Monetary Fund; and Reserve Currency. SPECIAL REPRESENTATIVE FOR TRADE NEGOTIATIONS (STR). See United States Trade Representative. SPECIFIC DUTY. See Specific Tariff. SPECIFIC LIMITATIONS ON TRADE. Government measures that restrict imports or exports of a product during a given period to an explicitly stated volume or value, usually by requiring a "license" or other government authorization for each export or import transaction. See also Boycott; Embargo; Exchange Controls; Export Quotas; Licensing; Non-Tariff Barriers; Quantitative Restrictions; and Tariff Quota. SPECIFIC TARIFF. A customs duty assessed as a stated monetary amount per unit of physical quantity, as so many cents a pound, bushel or yard, regardless of the value of the imported item. See also Ad Valorem Tariff; and Tariff. SPECULATIVE RISK. See Risk. SPOT MARKET. A market in which goods or securities are traded for immediate delivery. The spot price is therefore the price for immediate delivery. See also Forward Market; Market; Price; and Security. STABEX. See Lome Convention. STANDARDS. Technical specifications that lay down characteristics of a product such as size, quality, performance or safety. Standards may also cover terminology, testing methods, packaging, labeling or marking requirements.The Tokyo Round Agreement on Technical Barriers to Trade -- usually known as the "Standards Code" -- seeks to ensure that national standards are not used to impede trade. See also Codes of Conduct; Non-Tariff Barriers; Packaging, Labeling and Marking Regulations; Quarantine, Sanitary and Health Laws and Regulations; and Trade Agreements Act of 1979. STANDARDS CODE. See Standards. STATE TRADING COMPANIES. Government-owned or government-controlled enterprises that export and/or import goods and services.State trading companies exist in countries with "mixed economies" -- in which privately owned enterprises also play an important economic role -- as well as in socialist countries. See also Public Sector; State Trading Nations;and Unfair Trade Practices. STEEL. See Sensitive Products; and Trigger Price Mechanism. STEEL VOLUNTARY RESTRAINT ARRANGEMENTS (VRAs). Formal agreements between the United States and the governments of 16 countries plus the EC. Although the structure of the arrangements varies, exports to the United States of both carbon and specialty steel products were restricted either to a specified quota or to a percentage of U.S. import penetration, based on quarterly estimates of U.S. domestic consumption. The VRA program was initiated for five years beginning October 1, 1984,and was subsequently extended in September 1989 for two-and-one-half more years. The last VRA program terminated March 31, 1992. See also Export Quotas; Export Restraints; General Agreement on Tariffs and Trade; International Commodity Agreement; Multilateral Agreement; Orderly Marketing Agreements; and Sensitive Products. STOCKBROKER. See Broker. STOCKHOLM CONVENTION. See European Free Trade Association. STOCKPILES. See Buffer Stocks; and Strategic Stockpiles. STR. See United States Trade Representative. STRATEGIC STOCKPILES. Accumulated stocks of raw materials or other commodities deemed essential to national defense and maintained so that the country's actual or potential supply of the goods stocked will not fall below the quantity likely to be required for a given period of national emergency. The U.S. Strategic and Critical Stockpiling Act of 1946 authorizes the U.S. General Services Administration to maintain strategic stockpiles, and to expand or reduce them, according to changing estimates of defense needs, while making every effort to phase purchases or sales so as to have minimum effects on world prices. Buffer stocks, in contrast with strategic stockpiles, are intended to stabilize prices and thus protect exporters against economic losses they would face when prices decline precipitously. See also Buffer Stocks; and Commodity. STRUCTURAL CHANGE. Secular trends in the principal elements of an economic system, including its patterns of production, consumption, trade and relative prices. Structural change can take place within national economies and is reflected in the ever wider and deeper linkages among them and the consequent increasing interdependence of the world economy. Expansion in the economy as a whole and temporary, cyclical shifts of its components, are not considered structural changes. Since the Industrial Revolution, structural change within most national economies has resulted principally from developments in comparative advantage associated with technological advance, improved infrastructure and changing consumer preference, factors that have characteristically reflected movement from subsistence to commercial agriculture, reduction in the percentage of the labor force engaged in agriculture,and increases in the relative significance of manufacturing (and, at a later stage, a further development toward service industries), changes in the relative economic importance of various industries, the rise and decline of specific economic activities in different countries and regions, and evolution in the composition of exports and imports. See also Adjustment; Comparative Advantage; Competitive; Economic Development; Industrial Revolution; Infrastructure; Progress; Secular Trend; Services; Technology; Trade Diversion; Transfer of Technology; and Welfare. STRUCTURAL IMPEDIMENTS INITIATIVE (SII). U.S.-Japan bilateral talks aimed at identifying and removing internal impediments that inhibit external account adjustment and market access. See also Bilateral Agreement; Market; Market Access; Market Forces; and Restrictive Business Practices. SUBSIDIARY. A company controlled by another company, usually through ownership of 50 to 100 percent of its shares or through other organizational or managerial arrangement. See also Multinational Corporation; Restrictive Business Practices; and Unfair Trade Practices. SUBSIDIES CODE. See Countervailing Duties; and Export Subsidies. SUBSIDY. An economic benefit granted by a government to producers of goods, often to strengthen their competitive position. The subsidy may be direct (a cash grant) or indirect (low-interest export credits guaranteed by a government agency, for example). Under the Uruguay Round accord, countries agreed to make trading rules concerning subsides more predictable by defining three classes of subsidies: prohibited, actionable and non-actionable. A country can retaliate against a subsidy that is prohibited; it can retaliate against a subsidy that is actionable if it can show injury to a domestic industry or harm to the benefits of a trade agreement.A country cannot retaliate against a non-actionable subsidy. See Competitive; Export Subsidies; Industrial Policy; Infant Industry Argument; International Arrangement on Export Credits; and Non-Tariff Barriers. SUBSTANTIAL NEW PROGRAM OF ACTION (SNPA). A comprehensive statement of economic measures to be taken by the international community to enhance the outlook for economic development in the least developed countries, as agreed at an international conference held in Paris in August 1981. See also Least Developed Countries. SUPER 301. Section 301 of the Trade Act of 1974, as added by section 1302 of the Omnibus Trade and Competitiveness Act of 1988, required the USTR in 1989 and 1990 to identify trade liberalization priorities and to initiate Section 301 investigations with respect to such priority practices in all countries where these liberalization priorities have not been met. This particular aspect of U.S. trade law expired in 1991. On March 3, 1994, President Clinton signed an executive order reinstituting the Super 301 trade law provision. Under this executive order, the U.S. trade representative will identify in 1994 and 1995 those "priority foreign country practices," the elimination of which have the greatest potential for the expansion of U.S. exports.After identification, the priority foreign country practices will become the subject of investigations under Section 301. The first step of that process is consultations with the foreign government in an effort to reach agreement on the elimination of the practices in question, or in appropriate cases, compensation for the damage done by the practices. If no agreement is reached, the investigation will continue. Where the foreign practices at issue constitute violations of trade agreements, such as the GATT, or the new WTO, the United States will take those practices to the dispute resolution process created in those agreements. At the end of the investigation, the trade representative will have to determine if the practices are actionable under Section 301 and, if so, what action should be taken in response to them. See also Liberalization; Omnibus Trade and Competitiveness Act of 1988; Section 301; Trade Act of 1974; and Uruguay Round. SUPPLY. The quantity of an economic good that sellers will make available at a given price at a certain time in a specific market. A supply schedule indicates the quantity of an economic good that might enter the market at all possible prices at a particular time. Supply in a market economy is principally determined by the response of many individual entrepreneurs and firms to their perceptions of opportunities for earning profits. See also Demand; Entrepreneur; Goods; Market; Market Economy; Microeconomics; Price Elasticity of Supply; Private Sector; and Profit. SUPPLY ACCESS. Assurance that importing countries will have fair and equitable access at reasonable prices to supplies of raw materials and other essential imports. Such assurance might include explicit constraints against the use of the export embargo as an instrument of foreign policy. Requests for such assurance reflect the desire of countries to have a consistent supply of important raw materials at stable prices. See also Embargo; Market; and Supply. SUPPLY SCHEDULE. See Supply. SURPLUS. The amount of a commodity that cannot be absorbed in a given market at the existing price. See also Market;and Public Law 480. SUSPENSION OF LIQUIDATION: In the United States, the preliminary determination in an anti-dumping investigation (or final determination after a negative preliminary determination), if affirmative, shall provide for the suspension of liquidation of all entries of covered merchandise which are entered, or withdrawn from warehouse, for consumption on or after the date of publication of the notice in the Federal Register. Each district director of customs is directed to require a cash deposit, or the posting of a bond or other security, for each entry concerned equal to the amount by which the foreign market value exceeds the U.S. price. See also Anti-Dumping Code; Dumping; Foreign Market Value; Liquidation; and United States Price.