TEXT: USTR PRESS RELEASE ON FOREIGN TRADE BARRIERS REPORT
(Highlights Chinese, EU trade barriers)

Washington -- U.S. exporters continued to have difficulty gaining access to the Chinese market and face numerous barriers in Europe, according to the 13th annual U.S. report on foreign trade barriers.

The "1998 National Trade Estimate Report on Foreign Trade Barriers" was issued by the Office of the U.S. Trade Representative March 31.

"The NTE report reflects a series of market access concerns with China across agriculture, industrial production and services," according to a press release issued with the report. "Concerns remain about illegal distribution and retail sale of IPR products, and end user piracy of business software."

The report also highlighted a variety of trade barriers in Taiwan, Canada, Mexico and South Korea, among other countries.

It said that the European Union maintains a broad array of restrictive distribution practices and tariffs, and unpredictable product approval, labeling and licensing requirements.

Texts may be obtained from USTR's web site at:

http://www.ustr.gov/reports/nte/1998

Following is the text of the USTR press release:

(begin text)

USTR RELEASES 1998 INVENTORY OF WORLD-WIDE TRADE BARRIERS

The Office of the U. S. Trade Representative released today the thirteenth annual U. S. report on foreign trade barriers. The 1998 National Trade Estimate Report on Foreign Trade Barriers (NTE) lists a wide range of foreign trade barriers that restrict U. S. exports as well as those of other nations.

In this year's State of the Union address, President Clinton said, "As we enter the 21st century, the global economy requires us to seek opportunity not just at home, but in all the markets of the world." Using the NTE as a vital source of information, the Administration has identified barriers to U. S. exports, negotiated agreements to reduce them, and diligently monitored and enforced those agreements, as well as our own trade laws.

U. S. Trade Representative Charlene Barshefsy said, "Because international trade is an increasingly important component of our economic strength at home and leadership abroad, it is vital to the long-term prosperity and influence of the United States that this Administration continue to exercise leadership and continue to press our trading partners toward more open markets and broader compliance with a rules-based trading system."

1997 was an exceptional year for both U. S. exports and the U. S. economy. In its seventh year of expansion last year, the U. S. economy grew by a strong 3.8 percent in constant 1992 dollars. U.S. exports of goods and commercial services, however, grew three times faster than the overall economy, rising over 12 percent in constant dollar terms last year. In fact, of the $260 billion increase in U.S. GDP last year, $106 billion, or slightly over 40 percent was accounted for by the increase exports.

The NTE report lists all significant trade barriers including policies restricting the import of goods and services, export subsidies, deficiencies in intellectual property protection, and investment barriers. Where such barriers are inconsistent with trade agreement obligations, including those under the WTO agreements, the U.S. is pursuing appropriate redress.

The Clinton Administration has negotiated 250 trade agreements, all designed to advance our economic and trade interests. These agreements, coupled with 75 enforcement actions, have resulted in significant progress. This year's NTE sites several examples where our trade partners recently have reduced or eliminated trade barriers.

"1997 was the year of the trade trifecta where we succeeded in bringing down global trade barriers in telecommunications services, information technology, and financial services. These areas represent the infrastructure of the 21st century and high growth areas of trade where the United States leads the world," said Ambassador Barshefsky. "These successful negotiations demonstrate the importance of our multilateral trade agenda as we look ahead to IPR, government procurement, agriculture, and services in the next two years." The NTE Report demonstrates that the United Stated vigorously enforces all of its international trade agreements and U.S. trade laws. In the past 5 years, USTR has brought 75 trade enforcement actions, and has utilized the WTO dispute settlement procedures more than any other WTO member, filing 35 cases to date.

Ambassador Barshefsky noted that "there is much work that must be accomplished to ensure that rules for fair and open trade are applied around the world." To this end, the Clinton Administration will continue to use a combination of sectoral, bilateral, regional, and multilateral initiatives to open new markets to American exports throughout the world.

Highlights of the 1998 NTE Report

This year's report highlights trade issues of concern around the world. With respect to Japan, the Administration continues to pursue vigorously improvements in market access for U. S. goods and services. Still, the U.S. merchandise trade deficit with Japan increased 17 percent in 1997 to $55.7 billion. A key development in 1997 was the establishment of the Enhanced Initiative on Deregulation and Competition Policy which calls for the urgent need for significant deregulation affecting: telecommunications, medical devices and pharmaceutical products, housing, financial services, competition policy, distribution, and transparency. The U.S. Government successfully concluded several bilateral agreements with Japan during the past year which reduce or eliminate market access barriers affecting: wood products, sound recordings, tomatoes, telecommunications procurement, port practices, Nippon Telegraph and Telephone procurement, distilled spirits, and civil aviation. In addition, the Administration continues to monitor closely Japan's implementation of agreements affecting sectors such as: autos and auto parts, flat glass, insurance, computers, as well as working to address other market access barriers, such as barriers faced in the electric utilities sector, increasingly important as Japan deregulates this sector, and the new market-opening initiative on film.

The NTE report reflects a series of market access concerns with China across agriculture, industrial production and services. The full range of U.S. market access concerns are embraced in the U. S. bilateral agenda with China, and the framework for China's WTO accession negotiations. Under the 1995 and 1996 IPR agreements with China, China has shut down 62 illicit CD production lines. However, concerns remain about illegal distribution and retail sale of IPR products, and end user piracy of business software. The report notes that under the 1997 renewal of the U. S.-China bilateral textiles agreement, import quotas were reduced in 14 categories of textile and apparel products that were illegally trans-shipped to the United States. In China's WTO accession negotiations, we have made some progress in area such as trading rights, judicial review, non-discrimination and transparency. China has announced its intention to join the ITA and to make significant tariff cuts.

During the past year, important progress was made with Taiwan on market access issues involving computers, telecommunications, and government procurement; however, significant trade issues remain in such areas as tariffs, government procurement, IPR (e. g., exports of pirated products to third countries), standards and licensing requirements.

The report notes that the European Union and the United States share the largest two-way trade and investment relationship in the world with goods trade approaching $300 billion a year, services trade well over $100 billion a year and annual direct investment flows across the Atlantic of about $100 billion. However, the report also notes that restrictive distribution practices, tariffs, and unpredictable product approval, labeling and licensing requirements have restricted market access for U.S. goods and services providers. The report highlights the importance of gaining greater market access certainty for a range of products products, including food, pharmaceuticals, beef from animals treated with growth promoting hormones, products developed through the application of biotechnology, and wine. A recent breakthrough in the implementation of the U.S.-EU veterinary equivalency agreement should facilitate increased market access for U.S. meat exporters. On-going concerns with the EU focus on the need for standards, uniform testing, fair labeling, and gaining certainty in licensing and certification practices. The report also describes a range of market access concerns with Russia, including an average weighted tariff of 13.3 percent and a lack of transparency in many aspects of government policy and the operation of the legal system. Unpredictable changes in customs regimes, and restrictions in services trade and investment also inhibit market access in Russia and many of the former Soviet Republics which are in the midst of WTO accession negotiations.

In the Western Hemisphere, global agreements in telecommunications, financial services and information technology will improve market access conditions in Latin America as changes are implemented. In 1997, Mexico became the second largest export market for the United Stated, surpassing Japan. In fact, 50 percent of global export growth last year was accounted for by growth to our NAFTA partners alone. Under the NAFTA, we have seen a progress across a range of disciplines newly subject to the NAFTA's rules and implementation schedule. For example, Canada and the United States eliminated tariffs on all covered products as of January 1, 1998. Due to the NAFTA, Mexico has eliminated tariffs on approximately two-thirds of all U. S. goods entering Mexico to date, whereas before the NAFTA, over 80 percent of U. S. goods entering Mexico were subject to duties. NAFTA has leveled the playing field for U.S. exporters, the report notes that there were a number of market access difficulties with Mexico in such areas as anti-dumping actions, telecommunication practices, intellectual property rights enforcement, and other technical barriers to trade. The Administration has actively pursued solutions in these areas through either bilateral efforts, or trilateral efforts under the extensive NAFTA work program. While noting that U. S.-Canada trade now amounts to a billion dollars a day and growing, the report describes a number of practices in the cultural sector which continue to restrict market access in addition to continuing concerns about market access conditions for dairy products, and the practices of the Canadian Wheat Board. In Brazil, a recent agreement to dismantle the Brazilian auto regime is a constructive step, but the report notes that the average tariff rate in Brazil is 13.8 percent, four times higher than the U. S. average, and there are a series of concerns related to market access, investment restrictions, and inadequate IPR restrictions.

This year's report notes that in Korea, U. S. industry and agricultural interests continue to encounter significant market access barriers, which we are addressing both bilaterally and in appropriate multilateral fora. However, the report also indicates that macroeconomic reforms spurred by the IMF stabilization program for Korea, if implemented fully and faithfully, should reduce barriers to free trade, investment, and competition in that market.

(end text)

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