*EPF511 01/16/2004
Excerpt: Security Measures Work Without Interrupting Trade, Official Says
(USTR's Deily responds to WTO review of U.S. trade policy) (2990)

The Bush administration works hard to make sure that security measures do not harm the free flow of trade, Deputy U.S. Trade Representative Linnet Deily says.

In January 16 remarks to the World Trade Organization (WTO) in Geneva, Ambassador Deily described how each of the security measures works. Her remarks formed part of the U.S. response to a formal WTO review of U.S. trade policy.

For example, she talked about the 24-hour rule, which requires shippers to provide U.S. customs agents specific information electronically 24 hours before lading cargo on board a ship for export to a U.S. port.

"Although there was some initial skepticism," Deily said, "this requirement, which has been in force almost one full year, has been implemented successfully by the international trade community."

In that time no legitimate shipment has been detained by the 24-hour rule, she added.

She described the Container Security Initiative, which places U.S. officials at foreign seaports to screen cargo destined for the United States, and the Customs Trade Partnership Against Terrorism, a voluntary program aimed at bolstering security at every stage of manufacturing and shipping.

Deily also defended the law aimed at protecting the U.S. food supply from terrorist attack, applied to domestic and foreign suppliers alike.

In another section of her remarks Deily responded to complaints about U.S. imposition of duties to offset dumping and subsidies and about use of safeguard measures to give temporary protection to U.S. industries hurt by a surge of fairly traded imports.

"The U.S. policy in this area has been consistent for many years," Deily said. "Trade remedies [duties against dumping and subsidies] will be imposed where an objective and transparent examination of the facts reveals that such a measure is warranted under the relevant WTO Agreements and U.S. law."

The WTO dispute-settlement system ruled against President Bush's safeguard measures for the U.S. steel industry, and Bush revoked them in December. Deily added that the WTO "has yet to find any safeguard measure, by any country, to have been applied consistently with WTO rules."

She reminded other delegates that the United States has imposed no safeguard measures on textile imports in more than 10 years but declined to speculate whether the U.S. industry will seek new protection once the 1994 WTO agreement eliminating textile quotas takes full effect this year.

Following is an excerpt of Deily's statement:

(begin excerpt)

TRADE POLICIES BY MEASURE

Tariffs, Tariff Peaks and Non-Ad Valorem

As I noted earlier, there were many comments regarding the importance others attach to further liberalization of access to the U.S. market. My answer is simple: We are ready to negotiate with others in the DDA [Doha Development Agenda, the ongoing WTO round]. Specifically, questions were raised regarding the few remaining bound U.S. industrial tariffs that are higher than our average tariffs, and the issues of tariff escalation and non-ad valorem rates [duties set by some criteria other than as a proportion of the value]. The U.S. schedule contains specific rates in some areas, reflecting historical factors, preferences by industries who are producing high-value products, product sensitivities and changing interests of trading partners in our market.

However, looking forward rather than backwards, the 2002 U.S. NAMA [non-agricultural market access] proposal makes clear that we are prepared to eliminate all our tariffs, on every line of non-agricultural goods, if others -- including developing countries -- will undertake a similar degree of liberalization and ensure that our exporters can gain access opportunities to new markets. How we accomplish our collective goals for results in NAMA is a subject for further negotiation. Our NAMA proposal signaled our readiness to address definitively the remaining issues of escalation in the U.S. schedule. Tariff escalation would be totally eliminated under our initial approach. We remain prepared to address the issue in the negotiations if others -- including developing countries, which also have employed escalation extensively -- do the same. In addition, we have indicated a general willingness to reduce significantly or eliminate use of non-ad valorem rates in these negotiations. Again, the degree to which we are prepared to do so is a subject for negotiations.

I would remind my colleagues that the U.S. proposal for NAMA was developed in close consultation with Congress and the private sector, who believe strongly that realizing the market access opportunities of the DDA will be the litmus test for success for both developed and developing countries.

Security Measures

i. Container Security, 24-Hour Rule and Customs-Trade Partnership

Many delegations raised concerns regarding the possibility that recently implemented U.S. security procedures might affect adversely the free flow of international trade. I can confirm that President Bush and Secretary Ridge [Homeland Security Secretary Tom Ridge] are sensitive to this issue and fully understand the need to work closely with the international trade community to ensure this does not happen.

To address more thoroughly your concerns, I would like to take this opportunity to explain briefly to you how some of the recently implemented security measures actually work. U.S. Customs and Border Protection takes a step-by-step approach to the examination and screening of arriving international cargo. It is fully recognized that the U.S. economy, as well as the global economy, cannot thrive without the expeditious movement of international trade. These initiatives have been designed to identify and carefully screen high-risk cargo shipments while facilitating the expeditious movement of legitimate trade. Many of you mentioned the 24-hour rule. To comply with the 24-hour rule, shipment specific information is provided electronically to U.S. Customs and Border Protection 24 hours prior to lading on board the importing sea carrier. Although there was some initial skepticism, this requirement, which has been in force almost one full year, has been implemented successfully by the international trade community. The information received via the 24-hour rule requirement enables the electronic screening of international cargo destined to the United States during the time it is in transit to the foreign port of departure or while it is being prepared for loading on board the vessel which will transport it to the United States.

Let me point out that the vast majority of cargo, well more than 99 percent of shipments destined to U.S. markets, is determined to be low risk and is laden expeditiously on board the exporting vessel without further scrutiny. These determinations are based upon use of a highly sophisticated, fully automated rules-based risk assessment system that quickly identifies any potentially questionable shipments. In the event a shipment is determined to be somewhat suspicious, the cargo is screened for the presence of weapons of mass destruction or other implements of terror. Again, to eliminate any possible delay this all takes place prior to the container being laden on board the vessel that will transport it to the United States. The test of time has proven that there have been no instances where a legitimate shipment has been detained and prevented from sailing on board the vessel upon which it was originally scheduled to depart the foreign port.

The Container Security Initiative (CSI) is another initiative to which a number of delegates referred. Every year some 200 million sea containers move among the world's top seaports. In the United States, nearly 50 percent of the value of all imports arrives via sea container. In January 2002, U.S. Customs launched the Container Security Initiative to help prevent the global containerized cargo system from being exploited by terrorists. CSI involves the placing of U.S. officers at the world's busiest seaports to screen, jointly with the host government Customs Service, cargo destined for the United States. Now within the Department of Homeland Security, Customs and Border Protection [CBP] continues to implement CSI at major ports around the world. I am pleased to tell you that many of the countries here already have CSI operational at your ports of entry or have signed declarations of principles which will enable U.S. personnel to be assigned to ports to work jointly with Customs officers to identify and examine, where necessary, high-risk containers. The program is fully reciprocal and all countries where U.S. officers are assigned are welcome to send their Customs officers to the United States to work with U.S. Customs and Border Protection to screen cargo destined for their countries. So far, both Japan and Canada have stationed Customs officers in the United States to do so.

While CSI is a great example of government-to-government cooperation, the Customs Trade Partnership Against Terrorism, abbreviated as C-TPAT, is an excellent example of industry/government cooperation. C-TPAT participants, including importers, Customs House Brokers and freight forwarders, carriers, warehouse proprietors, port authorities, terminal operators and foreign manufactures complete a self-assessment of their internal security procedures and agree to work to improve any identified weaknesses. They also agree to share their supply chain security procedures with others in their supply chain. For example, an importer is encouraged to ensure that the Customs House brokers and freight forwarders to whom they entrust their shipments share their commitment to ensuring the security of their shipments. CBP considers the participation of entities involved in the international trade supply chain in the C-TPAT program when assessing the risk associated with specific importations. It should be emphasized that participation in C-TPAT is strictly voluntary. Interestingly, though, many involved companies have found that when they examine procedures associated with their respective international trade supply chain operations for C-TPAT purposes they identify additional opportunities for savings in areas such as loss prevention.

The United States has fully engaged in open dialogue on these and other security measures with third country Customs Services through the multilateral forum provided by the World Customs Organization. In addition, U.S. Customs and Border Protection maintains an ongoing, open dialogue with the international trade community through a variety of mechanisms, including the Commercial Operations Advisory Committee, to ensure that potential problems or scenarios, that might lead to any delays, are quickly identified and addressed. We are committed to ensuring both the security and facilitation of the international trade supply chain. We are exceptionally pleased with the cooperation we have received from other governments, from the many entities in the importing and exporting communities and from other international organizations.

ii. Bioterrorism Act

The Bioterrorism Act serves a legitimate public purpose in helping protect residents of the United States from the use of the food supply as means to terrorist attack. Its registration procedures apply to domestic and foreign facilities alike. Registration requires little more than provision of name, address, emergency contact information, product identification and the name of the individual authorized to submit the registration form to the FDA [Food and Drug Administration]. This collection of information may be submitted electronically or by mail. The U.S. Food and Drug Administration made every effort to minimize the burden while meeting the requirements of the Act. It consulted with both domestic and foreign stakeholders, including numerous foreign embassies in the United States.

Contingency Measures

Ambassador Chung and several Members commented on the U.S. use of measures available under the WTO Agreements on antidumping, subsidies and countervailing measures, and safeguards. Several Members called upon the United States to exercise restraint in launching investigations that could lead to the imposition of trade remedies. As a preliminary matter, the United States cannot predict and has no control over the number of petitions filed by private parties from year to year. Further, domestic law provides that investigations should be initiated if the petitions satisfy statutory requirements. That said, the numbers of antidumping cases initiated during the years covered by this trade policy review, 2002 and 2003, were significantly lower than the number of such cases initiated in 2001. These variations do not represent any change in policy by the U.S. government, but merely shifts in the number of adequately supported petitions filed by private parties with the Department of Commerce and the International Trade Commission [ITC]. However, if this recent decrease in filings reflects a decrease in the use of unfair trade practices, it is indeed welcome.

The U.S. policy in this area has been consistent for many years: Trade remedies will be imposed where an objective and transparent examination of the facts reveals that such a measure is warranted under the relevant WTO Agreements and U.S. law. In this regard, a review of the number of U.S. preliminary and final measures imposed as a result of initiations is useful. The Secretariat's report notes that over the review period, no provisional measures were taken in almost a quarter of the antidumping cases initiated, and in over half of final measures were taken. The numbers for countervailing duty investigations are similar.

Some might argue that these statistics demonstrate that some cases should not have been initiated, but the complex facts necessary to establish whether injurious dumping or subsidizations have taken place are established only during the course of a thorough investigation. The number of cases in which measures are not imposed reflects the due process provided to respondents, as well as the stringent examination of the facts required of the ITA [Commerce Department International Trade Administration] and ITC [U.S. International Trade Commission] before any measures may be imposed. The Agreements recognize antidumping and countervailing duties as legitimate tools to counter unfair trade practices. However, we agree that these measures should not be abused. In this spirit, we intend to maintain the strong procedural protections for firms involved in U.S. antidumping and countervailing duty proceedings. We note that some of these protections go well beyond what is required of us under the Agreements, and we will work to ensure that U.S. exporters involved in foreign trade remedy actions are afforded similar protections.

Another key aspect of the U.S. policy with respect to antidumping and countervailing duty measures is the use of administrative reviews to ensure that the duties being applied are based on recent pricing patterns. Several Members have also asked about the Sunset reviews used by the United States under Article 11.3 of the AD Agreement [WTO Antidumping Agreement] and 21.3 of the SCM Agreement [WTO Subsidies and Countervailing Measures Agreement] to determine whether, after five years, a trade remedy measure continues to be necessary to offset dumping or countervailable subsidization and to prevent material injury. Such reviews are also subject to stringent procedural protections, and the Secretariat's report notes that during the review period 38 percent of the measures subject to sunset review were revoked. The dispute settlement system has not overturned the results of any sunset review which has been challenged.

I should also like to take this opportunity to correct a misimpression about WTO challenges of U.S. antidumping and countervailing duty measures. While some have said that WTO dispute settlement panels have found most such measures to be WTO-inconsistent, in fact the vast majority of those measures have never even been challenged.

With respect to safeguards, the United States has applied safeguards measures in six of its ten safeguards investigations under the WTO Safeguards Agreement. Only one such measure, on certain steel products, has been applied since the last trade policy review, and there have been no investigations initiated during this period. The United States continues to believe that the Agreement on Safeguards plays an essential role within the WTO framework and remains committed to the use of the mechanism in conformity with our domestic legislation and WTO rules. As noted by the discussant and some Members, the measures challenged in the WTO have been found inconsistent with Safeguards Agreement requirements. However, it must be noted that the Dispute Settlement Body has yet to find any safeguard measure, by any country, to have been applied consistently with WTO rules. Some Members have inquired about our use of trade remedies on textile products. The United States has only four measures on textile products under the AD, SCM and Safeguards Agreements. For many exporters these measures impose very low rates of duty, and other exporters are currently exempt from payment of any duty at all. The United States has not imposed a new measure on textile products under the AD, SCM and Safeguards Agreements in over a decade. The United States cannot predict whether expiration of the MFA [Multifiber Arrangement] will result in the filing of trade remedy petitions.

Finally, the United States has also been one of the most active participants in the Rules negotiating group, where we have proposed for further discussion numerous provisions of the Agreements where clarification and improvement may be possible in ways which minimize the opportunity for misuse of trade remedy measures while also increasing the effectiveness of those remedies. The United States will continue its active engagement in this area.

SPS Measures

Several questions focused on both general and specific aspects related to Sanitary and Phytosanitary [SPS] measures. Clearly, all Members are increasingly confronted with these complex issues arising due to disease or health risks associated or believed to be associated with food and agricultural products traded internationally. The U.S. Department of Agriculture has substantially increased staffing and resources to perform and review risk assessments, and thus in many cases further open market access. Unfortunately, the demand for this specialized work also continues to increase. In order to provide a maximum of information and transparency in this process, for example, the USDA [U.S. Department of Agriculture] now allows anyone to track on its web site the requests for pest risk assessments. At the same time, the United States continues to provide major SPS technical assistance to a large number of developing countries.

(end excerpt)

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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