MOREPRESS RELEASE
EMBARGO:  NOT FOR PUBLICATION UNTIL
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PRESS/TPRB/172
17 September 2001
(01-4365)
THE UNITED STATES WOULD STRENGTHEN THE
MULTILATERAL TRADING SYSTEM
BY REDUCING REMAINING TRADE BARRIERS
The United States maintains one of the world’s most open trade and investment regimes, although in a
few important areas significant barriers to market access persist.  Reducing these barriers would
lessen distortions in global markets, frictions with trading partners and strengthen the multilateral
trading system according to a WTO report on the trade policies and practices of the United States.
The WTO Secretariat report, along with the policy statement by the Government of the United States,
will serve as a basis for the sixth trade policy review of the United States by the Trade Policy Review
Body of the WTO on 14 and 17 September 2001.
After a long period of strong expansion, U.S. economic growth has slowed significantly and imports
have fallen;  in response, monetary policy has been eased, with fiscal policy also playing a role.  Thechanged economic environment may impinge on U.S. trade policy implementation, with a slowing
economy likely to increase pressures for greater border protection and government support.  The
report points out that in the current cyclical slowdown the United States is less of a growth engine for
the rest of the world.
Since the previous Review of the United States in July 1999, the United States has made proposals for
further liberalization in agriculture and services in the WTO mandated negotiations.  The United
States has also committed support for a new multilateral round of negotiations.  In addition, the U.S.
trade agenda included negotiations for a Free-Trade Area of the Americas Agreement and for bilateral
free trade agreements.  To help implement its trad e initiatives, the Administration is seeking Trade
Promotion Authority, the report observing that trading partners are likely to attach great significance
to the outcome of these efforts.PRESS/TPRB/172
Page 2
MOREThe report notes that most imports enter the United States either duty free or are subject to low tariffs.
In 2000, the average MFN rate stood at 5.4% for all goods, the highest tariffs applying mainly to
agricultural products, as well as clothing, textiles and footwear.  For these products, tariffs tend to
increase with the degree of processing.  Tariff quotas apply to imports of beef, dairy products, sugar
and some sugar products, peanuts, tobacco and cotton.  Out-of-quota tariffs, ranging up to 350%, may
act as import prohibitions.  Some in-quota volumes are reserved for selected countries.
The report states that the United States continues to make active use of anti-dumping and
countervailing measures.  The initiation of investigations increased between 1998 and 2000.  Such
initiations may have a chilling effect on trade, with preliminary duties applied in most cases.  A large
percentage of investigations in the past two years involved steel products.  The United States applied
four safeguard measures in 1998-2000, involving agricultural or steel products, and initiated, in June
2001, a global safeguard investigation covering certain steel products.  Some trading partners havechallenged, in the WTO, U.S. methods to determine dumping and injury, as well as the four safeguard
measures applied since 1998.
Quantitative import restrictions in the United States are imposed mainly under the Agreement on
Textiles and Clothing.  Quotas apply to over half  of clothing imports and 32% of textile imports.
Over 1,000 quotas are applied to 45 countries, including 37 WTO Members.  Also, a de facto ban on
imports of foreign-built ships to service U.S. domestic  routes results from the Jones Act.  An embargo
continues on tuna imports from countries the United States deems not to be in compliance with the
International Dolphin Conservation Program.  An import ban applies to shrimp harvested with
technology considered to affect certain sea turtles.
The report also notes that trade restrictions imposed by the United States for national security and
foreign policy reasons may be a source of concern for some trading partners, particularly because of
the unilateral nature of some such measures.  Trade sanctions are enforced against nearly 30 foreign
countries for various reasons.
The United States has strongly advocated reductions in subsidies affecting competition in
international markets.  Consistent with this position, U.S. federal export subsidies have declined, and
government export financing is relied upon for a comparatively low share of exports.  However, given
the size of the U.S. economy, domestic support can also appreciably impact world markets.  In thisrespect, the largest recipient of government outlays is the U.S. agricultural sector.  Those outlays
nearly tripled between 1997 and 2000, exceeding the decline in the value of agricultural output.  In
2000, nearly US$30 billion was made available in direct payments to farmers and ranchers.  As a
result, direct payments amount to over one half of net farm income.
The WTO Secretariat report says that the provision of services through foreign commercial presence
has continued to expand in the United States.  Recent steps to remove domestic restrictions tointernational trade in the services sector have gone beyond commitments undertaken by the United
States in the WTO and should improve efficiency in the domestic economy.
The report adds that while further consolidation of U.S. financial regulations has taken place, and
national treatment is granted to foreign banks, in other financial-service sectors domestic regulationsmay complicate foreign market access.  In telecommunications, new international pricing regulations
were introduced and satellite services further privatized.  International air transport services have been
liberalized mainly through bilateral open skies agreements but restrictions persist on foreign
ownership and control of U.S. carriers.  Maritime transport continues to rank among the most
protected sectors of the U.S. economy.PRESS/TPRB/172
Page 3
MOREThe report observes that competition policy considerations are playing an increasingly visible role in
trade and investment matters in the United States and elsewhere, and raise complex questions about
the interaction of different policy instruments.  Thus government assistance could run counter to pro-
competitive principles, as could the inappropriat e application of anti-dumping, countervailing or
safeguard measures.  Also, the United States restricts foreign participation in government
procurement.
Note to Editors
Trade Policy Reviews are an exercise, mandated in the WTO agreements, in which member countries’
trade and related policies are examined and evaluated at regular intervals. Significant developments
which may have an impact on the global trading system are also monitored. For each review, twodocuments are prepared: a policy statement by the government of the member under review, and a
detailed report written independently by the WTO Secretariat. These two documents are then
discussed by the WTO’s full membership in the Trade Policy Review Body (TPRB). These
documents and the proceedings of the TPRB’s meet ings are published shortly afterwards. Since 1995,
when the WTO came into force, services and trade- related aspects of intellectual property rights have
also been covered.
For this review, the WTO’s Secretariat report, together with a policy statement prepared by the
Government of the United States, will be discussed by the Trade Policy Review Body on 14 and 17
September 2001. The Secretariat report covers the development of all aspects of the United States'trade policies, including domestic laws and regulations, the institutional framework, trade policies by
measure and by sector.
Attached to this press release is a summary of the observations in the Secretariat report and parts of
the government policy statement. The Secretariat report and the government's policy statement areavailable for the press in the newsroom of the WTO internet site (www.wto.org). These two
documents and the minutes of the TPRB’s discussion and the Chairman’s summing up, will be
published in hardback in due course and will be available from the Secretariat, Centre William
Rappard, 154 rue de Lausanne, 1211 Geneva 21.PRESS/TPRB/172
Page 4
MORESince December 1989, the following reports have been completed: Argentina (1992 and 1999),
Australia (1989, 1994 and 1998), Austria (1992), Ba hrain (2000) Bangladesh (1992 and 2000), Benin
(1997), Bolivia (1993 and 1999), Botswana (1998) , Brazil (1992, 1996 and 2000), Brunei Darussalam
(2001), Burkina Faso (1998), Cameroon (1995  and 2001), Canada (1990, 1992, 1994, 1996, 1998 and
2000), Chile (1991 and 1997), Colombia (1990 and 1996), Costa Rica (1995 and 2001), Côte d’Ivoire
(1995), Cyprus (1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992 and1999), El Salvador (1996), the European Communities (1991, 1993, 1995, 1997 and 2000), Fiji
(1997), Finland (1992), Gabon (2001), Ghana (1992 and 2001), Guinea (1999), Hong Kong (1990,
1994 and 1998), Hungary (1991 and 1998), Icelan d (1994 and 2000), India (1993 and 1998),
Indonesia (1991, 1994 and 1998), Israel (1994 and 1999), Jamaica (1998), Japan (1990, 1992,
1995,1998 and 2000), Kenya (1993 and 2000), Korea, Rep. of (1992, 1996 and 2000), Lesotho
(1998), Macao (1994 and 2001), Madagascar (2001), Malaysia (1993 and 1997), Mali (1998),
Mauritius (1995), Mexico (1993 and 1997), Morocco (1989 and 1996), Mozambique (2001), NewZealand (1990 and 1996), Namibia (1998), Nicaragua (1999), Nigeria (1991 and 1998), Norway
(1991, 1996 and 2000), OECS (2001), Pakistan (1995), Papua New Guinea (1999), Paraguay (1997),
Peru (1994 and 2000), the Philippines (1993 and 1999), Poland (1993 and 2000), Romania (1992 and
1999), Senegal (1994), Singapore (1992, 1996 and 2000), Slovak Republic (1995), the Solomon
Islands (1998), South Africa (1993 and 1998), Sri Lanka (1995), Swaziland (1998), Sweden (1990
and 1994), Switzerland (1991, 1996 and 2000 (jointly with Liechtenstein)), Tanzania (2000), Thailand
(1991, 1995 and 1999), Togo (1999), Trinidad and T obago (1998), Tunisia (1994), Turkey (1994 and
1998), the United States (1989, 1992, 1994, 1996, 1999 and 2001), Uganda (1995), Uruguay (1992
and 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).PRESS/TPRB/172
Page 5
MORETRADE POLICY REVIWE BODY
UNITED STATES
Report by the Secretariat – Summary Observations
The United States maintains one of the world’s most open and transparent trade and investment
regimes, although in a few important areas significant barriers to market access persist.  These directly
affect global trade as the United States is both the world’s largest single economy and trader.
Reducing such remaining barriers would be in line with traditional U.S. support for liberalization and
pro-competitive policies, further increasing the otherwise high efficiency of its economy, and
benefitting domestic consumers and taxpayers.  It would also lessen distortions in global markets,frictions with trading partners and strengthen the multilateral trading system.  These considerations
are particularly poignant in the face of the present global economic downturn and possible
protectionist pressures that might result.
Since the previous U.S. Review in July 1999, U.S. trade policies and practices have remained mostly
unchanged.  Modifications carried out during the period include market-access improvements granted
to certain developing countries and the consolidation of domestic financial regulations.  Also since
1999, government payments to agri-food producers have risen while the share of steel products in all
anti-dumping, countervailing and safeguard measures has increased.  Significant barriers to foreign
competition have remained in areas like textiles and clothing, transport and some services sectors.The new Administration’s response to these policy challenges will be important to global trade and
welfare.
Economic and policy developments
Since its last Review, U.S. monetary and fiscal policies have been relaxed to address the recent
significant slowdown in economic growth, which had fallen to an annual rate of around 1% by mid-
2001, from 5% in 2000.  This slowdown was led by declines in inventories and exports.  Consumer
expenditure has remained strong but imports have fallen considerably.  The six interest rate cuts made
in the first half of 2001 are being accompanied by tax cuts estimated at US$1.35 trillion over an 11-year period, made possible, to a large extent, by the budget surpluses of recent years.  Although
inflation has picked up, it does not appear a significant issue at this time.
The U.S. current account deficit has widened over the review period to 4.5% of GDP in 2000,
financed by capital inflows, particularly investment inflows.  These inflows have been a factor in the
continued nominal strength of the U.S. dollar.  Although this is placing pressure on domestic
industries, rapid productivity gains over much of the past decade have, by and large, allowed firms toremain competitive vis-à-vis foreign producers.
A number of steel producers filed for bankruptcy in the early stages of the economic downturn.
Responding to a perceived crisis in the industry, the President announced in June 2001 a policy
initiative that includes the initiation of a safeguard investigation (see below);  it also foreseesnegotiations with trading partners to eliminate global excess capacity and to agree on rules to govern
steel trade, with a view to eliminating subsidies.   This initiative echoes the multilateral consensus
sought a decade ago under the GATT.
The President has reiterated the U.S. commitment to an open, transparent and effective system of
international trade disciplines and procedures, and has committed support for a new multilateral round
of negotiations.  The President also announced the 2001 International Trade Agenda, seeking, inter
alia, improved market opportunities for U.S. exports and investment, including agriculture, servicesPRESS/TPRB/172
Page 6
MOREand intellectual property.  The Agenda contains a "Labor and Environmental Toolbox" of actions that
could be taken to promote labour and environmental objectives.
In the current WTO mandated agricultural negotiations, the United States has proposed long-term
agricultural trade liberalization, in particular by reducing tariffs and expanding tariff quotas,
eliminating export subsidies and reducing trade-distorting domestic support.  Also, as the world'slargest producer and exporter of foods containing genetically modified organisms, the United States
has expressed concern about trade restrictions on these products.
In the ongoing services negotiations, the United States has proposed the further liberalization of 11
sectors under the GATS; and presented a proposal on the movement of natural persons.  The United
States supports a global electronic commerce framew ork free of customs duties, and is debating with
partners the issue of domestic taxation of these services.
In addition to WTO negotiations, the U.S. trade agenda includes negotiations for a Free-Trade Area of
the Americas Agreement and for bilateral free trade agreements (FTAs) with Chile, Jordan and
Singapore.  FTAs are already in force with Canada, Israel and Mexico that provide for qualifying
imports to enter the U.S. market mostly duty-free and, in the case of textiles and clothing, quota-free.Reflecting these preferences and their geographic proximity, Canada and Mexico are now the United
States’ two largest trading partners.
To help implement the Administration’s trade initi atives, the President is seeking Trade Promotion
Authority, a successor to "fast-track" authority.  U.S. trading partners are likely to attach greatsignificance to the outcome of these efforts.
Market access in goods
Tariffs
The United States accords MFN tariff treatment to all but six countries, including a WTO Member
(Cuba).  Legislation has been passed granting China unconditional MFN status upon its accession to
the WTO, thereby terminating the process of annual renewal of China's MFN treatment.  Denial of
MFN treatment may impose significant costs on a trading partner, as the United States retains
substantial differences between MFN and non-MFN tariffs.
Most imports either enter the United States duty free or are subject to low tariffs, all except two of
which are bound.  In 2000, the average MFN rate stood at 5.4% for all goods, 10.6% for agri-food
products and 4.5% for non-agricultural products.  Nearly one third of all tariff rates are zero.  Non-ad
valorem rates represent nearly 13% of tariff lines;  the ad valorem equivalents of the U.S. specific and
compound rates average 11.5% and mask relatively high levels of protection.  The highest tariffs
apply mainly to imports of agri-food and tobacco pr oducts, as well as clothing, textiles and footwear.
In these industries tariffs tend to increase with the degree of processing.
Tariff quotas apply to imports of beef, dairy products, sugar and some sugar products, peanuts,
tobacco and cotton.  The simple average in-quota MFN tariff rate for 2000 was 9%, while the
corresponding out-of-quota averaged 53%.  Out- of-quota tariffs, ranging up to 350%, may act as
import prohibitions.  Some in-quota volumes, including beef, dairy products, and peanuts, are
reserved for selected countries.
The United States extends tariff preferences unilaterally to certain Andean, African and Caribbean
countries, as well as under its Generalized System of Preferences.  These preferences can be madeconditional to policy changes in the beneficiary countries in areas such as protection of labour rights
and of intellectual property.PRESS/TPRB/172
Page 7
MORESignificant benefits are likely to accrue to countries in sub-Saharan Africa and the Caribbean from the
U.S. Trade and Development Act (TDA) of 2000, wh ich contains both the African Growth and
Opportunity Act, and the Caribbean Basin Trade Partnership Act expanding the Caribbean Basin
Initiative.  Under the TDA, textile and clothing imports from beneficiary countries enter the United
States duty-free and quota-free, subject to content requirements on U.S.-produced inputs.  This
provision should ensure that U.S. input producers also benefit from the arrangement, possibly at the
expense of lower-cost third-country suppliers.
Contingency Measures
The United States continues to make active use of anti-dumping (AD) and countervailing (CV)
measures.  The initiation of AD investigations increased between 1998 and 2000, as did the number of
new duty orders.  Initiations of investigations may have a chilling effect on trade, with preliminary
duties applied in most cases.  A large percentage of investigations in the past two years involved steel-
related products.  A number of suspension agreements have been reached in recent years;  those with
non-WTO Members involve voluntary quantity restraints and minimum prices.
The United States applied four safeguard measures in the period 1998-2000, involving agricultural or
steel-related products.  A global safeguard investigation covering certain steel products was initiated
in June 2001;  any ensuing measure would add to the protection already afforded through AD and CV
orders.  Export restraints were applied to shipments of softwood lumber from Canada until March2001.
The Continued Dumping and Subsidy Offset Act ("Byrd" Amendment), passed in 2000, requires
proceeds from AD and CV duties to be distributed to affected U.S. producers.  On passage of the Act,
the President noted that it would "provide select U.S. industries with a subsidy above and beyond theprotection level needed to counteract foreign subsidies, while providing no comparable subsidy to
other U.S. industries or to U.S. consumers, who are forced to pay higher prices on industrial inputs or
consumer goods as a result of the anti-dumping and countervailing duties".
Some of its trading partners question in the WTO the methods used by the United States to determine
dumping and injury.  They have also challenged the four safeguard measures applied since 1998 by
the United States, which has led to the revision of relevant U.S. regulations.  In addition, both the
Byrd Amendment and the Anti-dumping Act of 1916 have been brought before the WTO dispute-
settlement mechanism.  Contingency measures generate uncertainty for exporters, as well as
considerable legal costs in defending against them.
Other Import Measures
Quantitative import restrictions in the United States are imposed mainly under the provisions of the
Agreement on Textiles and Clothing.  Quotas appl y to over half of clothing imports and 32% of
textile imports.  Over 1,000 quotas are applied to 45 countries, including 37 WTO Members.  These
measures are combined with relatively high MFN tariffs.
Under the provisions of the Jones Act, U.S. shipbuilders are the sole suppliers of ships servicing U.S.
domestic routes, resulting in a de facto ban on imports of foreign-built ships for such purposes.
The United States maintains import prohibitions for sanitary and phytosanitary reasons, including as a
response to risks posed by Bovine Spongiform Encephalopathy (BSE) and Foot and Mouth disease
(FMD).  In February 2001, imports of beef and beef products from Brazil were temporarily suspendedPRESS/TPRB/172
Page 8
MOREon concerns of BSE.  Since March 2001, all used farm equipment from FMD affected countries is
denied entry into the United States.
U.S. import restrictions enforce domestic environmental provisions governing the use of marine
resources.  Thus an embargo continues on tuna imports from countries the United State deems not to
be in compliance with the International Dolphin Conservation Program.  An import ban also appliesto shrimp harvested with technology that may adversely affect certain sea turtles.
The United States maintains measures that restrict foreign participation in public procurement.  Under
the Buy American Act, government agencies may in principle only purchase supplies and
construction materials defined as "domestic end-products" (manufactured in the United States with
more than 50% of U.S. components).  In addition, a number of programmes seek to foster the ability
of small business to compete for federal contracts.  Also, various set-aside schemes are in place;contracts awarded through these schemes amounted to  8% of all federal procurement awards in 2000.
These measures are complemented in some States by Buy-In-State regulations.
Export measures
A central objective of U.S. trade policy is to expand markets for U.S. exporters.  Instruments to
achieve this aim include trade statutes such as the Section 301 family of laws – to address foreign
measures deemed to affect negatively U.S. exports or impair U.S. rights under trade agreements – and
export assistance measures.
Section 301 has been used sparingly since 1999.  Moreover, its use is closely tied to multilateral
dispute settlement, at least for WTO members and in areas subject to WTO rules and disciplines.
Nevertheless, investigations continued to be launched and "reports" and "lists" published of countries
considered to be at fault.  The United States also monitors foreign compliance with intellectual
property agreements through Special 301 investigations.  In the 2001 review, 51 countries wereconsidered to deny adequate protection of intellec tual property or fair market access to U.S. right
holders.  To determine infringement of U.S. intellectual property rights, Section 337 investigations are
also conducted.
The United States applied trade sanctions against the European Union in the wake of favourable WTO
panels decisions in disputes concerning bananas, and beef treated with hormones.  Subsequently, the
United States enacted the "Carousel Amendment" to the Trade Act of 1974 to allow periodical
changes in the list of products subject to trade sanctions in case of non-compliance with rulings made
under multilateral rules.  This has brought to the fore the question of the effectiveness of trade
sanctions as an instrument to resolve trade disputes.
The United States has strongly advocated reductions in subsidies affecting competition in
international markets.  Accordingly, notified U.S. federal export subsidies have declined (however,
little information is available on sub-federal assistance programmes).  In agriculture, notified export
subsidies have been limited to the dairy sector.  Moreover government export financing schemes are
relied upon for a comparatively low share of exports;  although reduced, subsidized export credit
guarantees continue to support agri-food exports.  Large volumes of food aid are designed to enhance
food security in the developing world, whilst stabilizing U.S. farm income by disposing of surplus
stocks.
The export incentives resulting from the U.S. tax exemptions on certain "foreign trade" income of
foreign sales corporations has been under dispute in the WTO, and has raised the debate about the roleof Members' taxation regimes in support of trade and investment.PRESS/TPRB/172
Page 9
MOREOther policies affecting trade
Trade restrictions imposed by the United States for national security and foreign policy reasons may
be a source of concern for some trading partners, particularly because of the unilateral nature of
certain such measures.  Trade sanctions are enforced against nearly 30 foreign countries for various
reasons (e.g. arms proliferation, terrorism and worker rights).  Congress is considering reforms tosanctions policy and to export controls.
Given the size of the U.S. economy, subsidies and other assistance to domestic producers can
appreciably impact world markets.  The U.S. agri -food sector is the largest recipient of government
outlays.  These nearly tripled between 1997 and 2000, exceeding the decline in the value of
agricultural output.  In 2000, nearly US$30 billion was made available in direct payments to farmers
and ranchers.  As a result, direct payments amount to over one half of net farm income.  In addition,subsidized crop insurance programmes have been expanded.  Assistance to non-agricultural sectors,
notably fisheries, lumber and timber, aeronautics and shipbuilding, is provided mainly in the form of
tax incentives.
In 1999 and 2000, U.S. competition policy enforcement efforts led to the imposition of record fines
against international price-fixing cartels.  The United States views the relationship between trade and
competition policy as of increasing importance, but questions whether the WTO is, at this time, the
appropriate institution in which to develop multilateral competition rules.
Concerning the protection of intellectual property, the American Inventors Protection Act of 1999
aims to reduce patent-processing delays, while the Technology Transfer Commercialization Act of
2000 includes provisions for a federal agency to grant licences for federally owned inventions only to
licensees agreeing to manufacture substantially the licence-related products within the United States.
New legislation to restructure and extend the scope of the compulsory licensing of the transmission
and broadcasting of television through satellite was also introduced in 2000.
Competition policy considerations are playing an increasingly visible role in trade and investment
matters in the United States and elsewhere, and raise complex questions about the interaction of
different policy instruments.  Thus government assi stance to industries could run counter to basic pro-
competitive principles, as could the inappropriate application of contingency measures.  Indeed, asnoted by the U.S. authorities, the use of the Byrd Amendment would jeopardize consumer interests.
Similar negative effects can arise when U.S. rightholders prevent the parallel importation of patented
or copyright goods.
Access conditions in services
Services are by far the largest contributor to output in the U.S. economy.  The provision of services
through foreign commercial presence has continued to expand in the United States, partly on account
of initiatives in the WTO to facilitate market access through that mode of supply.  Recent steps to
remove domestic restrictions to international tr ade in the services sector go beyond commitments
undertaken by the United States in the WTO and should improve efficiency in the domestic economy.
In financial services, the entry into force in 1999 of the Gramm-Leach-Bliley (GLB) Financial
Modernization Services Act has further advanced the gradual consolidation of U.S. financial
regulation, and definitively breaks from the restrictions imposed under the 1933 Glass-Steagall Act on
affiliations between banks and securities firms.  It should allow financial companies to realize greater
economies of scale and scope.  The GLB does not alter the walls between banking and commerce.PRESS/TPRB/172
Page 10
MOREThe United States maintains a policy of national tr eatment towards foreign banks.  In other financial-
services sectors, domestic regulations may complicate foreign market access, with public interest and
investor protection as the rationale.  In the insurance sector, sub-federal regulation limits competition
from suppliers based in other U.S. States and a fortiori from abroad, unless they establish a
commercial presence in each State where they wish to conduct business.
Maritime transport continues to rank among the most protected sectors of the U.S. economy.
Nevertheless, the recent Ocean Shipping Reform Act enhanced competition in U.S. international
shipping, accelerating the shift away from rate-setting conferences.  The U.S. international maritime
transport market is generally open to foreign competition, although international cargoes carried by
U.S.-flag vessels benefit from substantial government assistance.  The current Administration
supports cabotage laws that reserve domestic routes to U.S. operators.
The U.S. air transport industry, one of the world's most efficient, relies mainly on bilateral Open Skies
Agreements to liberalize trade.  Viewed by the Un ited States as a cost-efficient way for carriers to
enter new markets, several such agreements were si gned over the last two years.  These agreements,
however, do not fully liberalize the markets they cover;  in particular, foreign ownership and controlof U.S. carriers remain restricted and the provision of domestic air services is permitted only to U.S.
carriers.
The U.S. telecommunications sector is the world's largest, and one of the most open and competitive.
Since 1999, developments include new international pricing rules and regulations designed to allowfor more competitive domestic and international telecommunications services; and the further
privatization of satellite services.
In the case of professional services, the U.S. federal system reserves the governance of professions to
individual states;  each state has its own licensing regulations and licensing board to administer theregulations.  In accounting, legal and most other professions few changes have taken place since 1999
affecting the conditions for national and international firms to operate across State lines.  The absence
of a uniform national regulatory regime, and divergent market access conditions across States
complicate inter-State supply and foreign market access.  Meanwhile, the growing demand for
integrated services from multi-disciplinary practices has underpinned debates about revising rulesregarding auditors' independence, fee-sharing partnerships between lawyers and accountants and the
use of International Accounting Standards.PRESS/TPRB/172
Page 11
MORETRADE POLICY REVIEW BODY
UNITED STATES
Report by the Government – Part I
THE UNITED STATES IN THE MULTILATERAL SYSTEM
For more than 60 years, the United States has pursued a policy of trade liberalization – seeking open
markets and expanded international trade  – based on the belief that reducing trade barriers creates
jobs, advances economic reform and development, and reduces poverty worldwide.  After the Second
World War, adherence to these principles guided U.S. leadership in the establishment of a system of
multilateral rules, the General Agreement on Tariffs and Trade (GATT), one of the pillars of the
post-World War II system.  For over a half-century, the GATT successfully promoted economicgrowth, increased standards of living, and strength ened international security.  The WTO continues
this work, taking the GATT system one step forward by providing a coherent institutional apparatus
to direct and oversee implementation of multilateral trade agreements as well as a forum to further
liberalize trade.
In the 50 years and seven additional multilateral trade rounds that followed the establishment of the
GATT, the United States joined other countries in lowering trade barriers –  expanding trade among
nations and creating opportunities for all countries to reap economic gains from international
commerce.  The last of these rounds, the Uruguay Round, expanded, reinforced and reformed the
multilateral trading system, liberalized agricultural and textile trade, strengthened dispute settlement
procedures, and extended new rules to trade in services and the protection of intellectual propertyrights.  The United States takes satisfaction in its key role in bringing these negotiations to a
successful conclusion.
As the multilateral trading system enters the new millennium, the fundamental features of U.S. trade
policy continue to be the maintenance of an open, competitive market at home, compliance with WTO
obligations, and leadership in the multilateral tr ading system.  The United States demonstrates
leadership not only through these efforts, but also through promoting and undertaking further trade
liberalization.  In 2000, the United States imported $1.2 trillion of goods and services – 66% of which
entered the U.S. market free of duty.  The average import duty paid on all imports into the United
States in 2000 was 1.6%.  Globalization, in part  through trade liberalization, has also promoted
competitive pressures that have made the U.S. economy innovative.
The World Trade Organization is at the center of U.S. efforts to open markets worldwide.  We
collaborate with our trading partners to improve the WTO and to conclude agreements that promote
greater prosperity and economic freedom, such as the Uruguay Round Agreement and the threesubsequent multilateral agreements on information technology products, financial services, and basic
telecommunications services.  These agreements are fundamentally transforming world trade.  We
have implemented our WTO commitments on schedule, and have accepted the rulings of WTO
dispute settlement panels in cases to which we are a party.  From the U.S. perspective, the world
trading system remains a work in progress; we take seriously the responsibility to continue the workbegun at Marrakesh.  High agricultural trade barriers reduce world food security.  Agricultural export
subsidies impose especially unfair burdens on farmers in the poorest countries.  The advances in
science and technology have created new produc ts and services, as well as new methods of
conducting trade. The United States has, therefore, submitted proposals to pursue further agricultural
reform and liberalization in services, in the context of ongoing negotiations under the built-in-agendaof the Uruguay Round.  We are committed to achieving solid gains for trade liberalization in these
negotiations.PRESS/TPRB/172
Page 12
MOREAs part of its broader efforts to liberalize trade, but still within the scope of WTO rules, the United
States is also involved in several regional and bila teral initiatives for free trade areas to complement
our efforts within the multilateral trading system. By moving on multiple fronts, we spur more rapid
trade liberalization.  An important aim in these negotiations is to cut taxes on trade and reduce other
barriers to competition for industrial goods, services, and agriculture.
The United States also is playing an important role in extending the benefits of trade liberalization to
the developing world and fostering their further integration into the multilateral trading system.  In
addition to providing duty-free access to our market for most products from developing countries
through unilateral preferential trade liberalization measures, such as the Generalized System of
Preferences, the African Growth and Opportunity Act , the Andean Trade Preference Act, and the
Caribbean Basin Trade Partnership Act, the United States provides more than $300 million per year
for trade related capacity-building activities through bilateral and multilateral aid programs.  In 2000and 2001, we have provided more than $1.6 million dollars to the WTO for technical assistance
activities.  In 2001, we have supported the Integrated Framework (IF) both through a contribution to
the IF Trust Fund and parallel activities in several least developed countries.  We hope that
momentum towards increased cooperation on trade capacity-building in developing countries will
continue to build.
In order to maintain domestic support for open trade and the multilateral trading system, the United
States provides assistance, through the Trade Adjustment Assistance program, to American workers
whose firms and industries have difficulty adjustin g to increased trade.  The Administration seeks to
improve this program by emphasizing skills training for displaced workers, a constructive  alternative
to trade protection.
We believe that trade liberalization supports the protection of the environment and promotes other
social goals, through improving economic and social conditions.  This, in turn, helps countries to
improve the environment, enhance observance of labor standards, and make progress on other critical
social issues.  Trade liberalization can also support environmental initiatives directly, such as through
freer trade in environmental goods and services, and the reduction of agricultural and fish subsidies.
The United States has also shown leadership in the multilateral effort to combat bribery and
corruption – practices which act as an invisible tariff on most imports and contracts.  We support such
efforts within the WTO to establish and enforce basic rules that diminish opportunities for bribery and
corruption in, for example, government procurement and customs valuation.
We share concerns with our trading partners about the need for increased transparency in the
multilateral trading system.  The United States has taken steps to encourage institutional
improvements to the WTO, particularly with respect to the transparency of its operations and
outreach.  We seek to establish transparency as the hallmark of all future trade negotiations and trade
agreements.
Consulting with those interested in trade issues is an important part of governments’ responsibility in
the development of trade policy.  In support of this objective, and to provide a strong level of
domestic support for our negotiating goals, the U.S. Government has sought public advice andcomments on the current WTO negotiations on agriculture and services, on priorities for future WTO
negotiations, on possible institutional improvements, and on preparations for the Fourth Ministerial
Conference.  More recently during the negotiations for the Free Trade Area of the Americas, the
United States participated in an innovative step – agreeing to make public the preliminary negotiating
text of our agreement and to contribute to a more informed public debate.  We believe that the WTOshould follow suit by expanding public access to dispute settlement proceedings, circulating panelPRESS/TPRB/172
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decisions promptly, and encouraging more exchan ge with outside groups and other international
organizations.
Trade is a priority in the President's overall economic program.  President George W. Bush outlined
the principles underlying U.S. participation in the mu ltilateral trading system in April 2001:   “Open
trade fuels the engines of economic growth that create new jobs and new income.  It applies the power
of markets to the needs of the poor.  It spurs the process of economic and legal reform.  It helpsdismantle protectionist bureaucracies that stifle incentive and invite corruption.  And open trade
reinforces the habits of liberty that sustain democracy over the long term.”
The United States strongly supports the work of the WTO as an institution for on-going negotiations
and consultations.  In this respect, we agree that re gular ministerial-level meetings to consider, adjust,
and expand the WTO's program of work are critical.  We see an emerging consensus among countries
at various levels of development on the importance of further trade liberalization and adherence to
WTO rules.  In addition, we have learned that some of the agreements we negotiate are complicated
and difficult to implement. We are committed to doin g more to have concurrent technical assistance
and capacity building to enable countries to participate more effectively in the process.
The United States is committed to a successful launch at the Doha Ministerial of a new Round of
multilateral trade negotiations that will offer benefits to all countries and will ensure that the WTO
can meet the challenges of the 21st century.  Much is at stake for the WTO, the international trading
system, and its members, including the United States.  The current global economic slowdown makes
it all the more important that we press forward, to continue the work begun so long ago with the
establishment of the GATT system.
END