Emergency Committee For American Trade - Publications

Summary: ECAT Positions on the Issues

The following paragraphs provide a summary of ECAT’s positions on the major trade, investment, and tax issues likely to be of greatest concern to ECAT member companies.

Section 2: Major Trade Negotiations and Agreements

Renewal of Trade Promotion Authority: ECAT strongly supports the renewal of Trade Promotion Authority (TPA) for an additional two years to enable the United States to continue to pursue the completion of the Doha Development Agenda and comprehensive and commercially -meaningful Free Trade Agreements (FTAs).

U.S.-Central American and Dominican Republic Free Trade Agreement: ECAT strongly supports Congress’ implementation of the U.S.-Central American FTA, including the Dominican Republic, as soon as possible. ECAT also urges the countries of Central America and the Dominican Republic to seek improvements in, not weaken, core standards, including with respect to intellectual property rights protection.

U.S.-Australia Free Trade Agreement: ECAT strongly supports the market-opening opportunities presented by the U.S.-Australia FTA, but remains concerned by its deviation from other recently concluded FTAs in certain key areas.

U.S.-Morocco Free Trade Agreement: ECAT supports Congress’ implementation of the U.S.-Morocco FTA.

World Trade Organization Negotiations: ECAT strongly supports the Doha Development Agenda agreed to by the WTO in November 2001. ECAT supports comprehensive negotiations on agriculture, services, industrial tariffs and other issues to expand market-access opportunities and reduce and ultimately eliminate barriers across all sectors. ECAT also supports efforts to ensure that WTO provisions are developed and applied in a manner that eliminates barriers to and supports the growth of information technology goods and services. In particular, ECAT supports:

the elimination of tariffs, non-tariff barriers, and export subsidies in agriculture, industrial products and services;
reforms of antidumping and countervailing duty rules in a manner that promotes balance between the interests of the petitioning industry and the interests of other U.S. industries and consumers;
the adoption of a binding WTO agreement on trade facilitation, based on the rules contained in the International Convention on the Simplification and Harmonization of Customs Procedures (Kyoto Convention), a work program on trade facilitation, and a commitment to simplify rules of origin;
efforts to reform the WTO dispute settlement system to make it more transparent and make it function more effectively;
efforts to ensure that trade and investment rules promote and do not inhibit the growth of e-commerce; and
increased transparency and communication with multilateral environmental agreement bodies.

Free Trade Area of the Americas Negotiations: ECAT supports significant progress in the Free Trade Area of the Americas negotiations to eliminate barriers to agriculture, goods and services trade and to develop strong, comprehensive protections with respect to investment and intellectual property rights that will promote economic growth and development and the rule of law throughout the Western Hemisphere.

U.S.-Southern Africa Customs Union Free Trade Agreement Negotiations: ECAT supports the timely completion and implementation of a comprehensive, high-standard and commercially meaningful U.S.-Southern African Customs Union FTA that will liberalize trade and investment.

U.S.-Bahrain Free Trade Agreement Negotiations: ECAT supports the timely completion and implementation of a comprehensive, high-standard and commercially meaningful U.S.-Bahrain FTA that will liberalize trade.

U.S.-Panama Free Trade Agreement Negotiations: ECAT supports the timely completion and implementation of a comprehensive, high-standard and commercially meaningful U.S.-Panama FTA that will liberalize trade and investment. ECAT strongly urges that the investment protections already accorded to U.S. investors under the U.S.-Panama Bilateral Investment Treaty (BIT) not be reduced in any new commitments made as part of the FTA.

U.S.-Colombia and Andean Pact Free Trade Agreement Negotiations: ECAT supports the timely completion and implementation of a comprehensive, high-standard and commercially meaningful U.S.-Colombia and U.S.-Andean FTA that will liberalize trade and investment. If FTA negotiations are initiated with Ecuador, ECAT strongly urges the Administration not to renegotiate investment protections that are already covered in the high-standard U.S.-Ecuador BIT.

U.S.-Thailand Free Trade Agreement Negotiations: ECAT supports the timely completion and implementation of a comprehensive, high-standard and commercially meaningful U.S.-Thailand FTA that will liberalize trade and investment.

Section 3: Major Trade Policy Issues

Building a Consensus on Trade and Investment Liberalization: ECAT supports efforts by the Administration, Congress, and the private sector to rebuild the consensus on the importance of trade and investment liberalization.

U.S.-Chile Free Trade Agreement: ECAT strongly supported the negotiation and Congress’ approval of the comprehensive and high-standard U.S.-Chile FTA. ECAT supports continued work by the Administration to ensure full enforcement of this agreement.

U.S.-Singapore Free Trade Agreement: ECAT strongly supported the negotiation and Congress’ approval of the comprehensive and high-standard U.S.-Singapore FTA. ECAT supports continued work by the Administration to ensure full enforcement of this agreement.

Termination of Section 201 Steel Tariffs: ECAT strongly welcomed the President’s decision to lift the section 201 steel import tariffs as the right decision at the right time. This decision exhibited U.S. leadership and was welcome news for U.S. steel-consuming manufacturers and their employees

African Growth and Opportunity Act and Haiti Preference Proposals: ECAT strongly welcomes legislation to expand trade and investment opportunities for U.S. farmers, manufacturers, service providers and their workers throughout the world. In particular, ECAT supports efforts to expand and extend the African Growth and Opportunity Act and to expand and extend preferential treatment for Haiti.

Global Outsourcing: As found in study-after-study, ECAT strongly supports the global engagement of U.S. companies as a critical component to promoting economic growth and high living standards at home. Legislative proposals at the state or Federal level to restrict global engagement will undermine the strength of U.S. companies and the U.S. economy to producer better high paying jobs in the United States. Legislation that will help educate America’s youth and help train and retrain its workers and provide adjustment assistance will do more to create the labor force that the United States needs to compete globally.

Addressing Concerns About Trade and Investment Liberalization: Continued global trade expansion is the bedrock of progress in achieving greater international observance of high labor and environmental standards and in promoting better access to food and health care. Progress on the human side of trade requires that the United States continue its leadership in the multilateral trading system promoting a strong set of WTO rules based on the right of member countries to set and enforce high environmental, labor, or other domestic standards. Before rushing to adopt trade-oriented solutions that may not be effective, it is critical that policymakers first work to define the United States’ objectives in each of these areas, and then determine how those objectives can best be achieved. Many of these issues may be better addressed directly through separate agendas in organizations with technical expertise, rather than as add-ons to the trade agenda. And, in those cases where complementarity between U.S. trade and other U.S. objectives exists, efforts should be made to address these objectives jointly and in a cooperative manner.

Trade Remedy Law Issues: It is vitally important that both U.S. unfair trade laws and Section 201 maintain – in both the legal provisions and their application – a careful balance between the interests of the petitioning industry and the interests of other U.S. industries and consumers. It is critical that the Congress and the Administration oppose any efforts to impose import restraints or amend U.S. antidumping, countervailing duty, or safeguards laws in ways that would invite foreign retaliation, encourage restrictive foreign mirror legislation, and/or violate the United States’ international trade commitments.

Restructuring and Modernization of U.S. Customs Service: ECAT is committed to working with the Customs Service, the Department of Homeland Security and the Department of Treasury to help ensure that Customs’ restructuring progresses in a manner that fulfills our national security and enforcement goals, while also facilitating the flow of legitimate commercial trade that provides enormous economic benefits to the United States. ECAT strongly supports full funding of the Automated Commercial Environment (ACE) from general revenues. The ongoing failure to modernize Customs’ automated systems threatens to undermine U.S. productivity and competitiveness in the global marketplace and ECAT supports efforts to resolve these issues quickly. ECAT also strongly supports improvements in the operation of the Customs Service, including through full and improved implementation of the Customs Modernization Act and the Customs Procedural Reform and Simplification Act of 1978 in a manner that facilitates trade.

Reform of Trade Adjustment Assistance and Worker Retraining Programs: ECAT recognizes that while expanding U.S. international trade and investment raises the U.S. standard of living overall, dislocations occur and must be addressed through public and private worker retraining and assistance programs. ECAT supports efforts to implement the trade adjustment assistance provisions of the Trade Act of 2002 and to continue to review the effectiveness of these programs and other proposals in addressing the needs of today’s workers.

Section 4: Investment

U.S. Negotiating Position on Investment: ECAT believes that U.S. trade and international tax policies should recognize the vital importance of U.S. foreign direct investment to U.S. economic growth and should promote the expansion of U.S. trade and investment. ECAT supports, therefore, a strong U.S. negotiating position on investment that promotes market access and investment protections for the benefit of U.S. companies, workers and their families and the U.S. economy. ECAT is very disappointed by the lowering of investment standards in recent free trade agreements and the proposed Model Bilateral Investment Treaty. These lowered standards will undermine U.S. investment abroad that is so important to U.S. economic growth and a high standard of living. ECAT urges the Administration to resume the push for the high standards that have traditionally been included in our bilateral investment treaties, including strong protections for fair and equitable treatment, full protection and security, compensation for expropriation (including with respect to all forms of property recognized in the United States, including contract rights) and full access to arbitration for U.S. financial services institutions, for breaches of existing and future investment agreements and for all U.S. investors with respect to financial services measures. The United States should also refrain from weakening existing agreements or undermining protections already provided in existing BITs through the negotiation of new free trade agreements.

Antibribery Initiatives: ECAT supports U.S. efforts to ensure that the OECD Convention on Combating Bribery of Foreign Public Officials and the Inter-American Convention on Corruption are effectively implemented and to combat the problem of foreign corruption through other international efforts.

Section 5: The European Union

U.S.-European Union Relations: ECAT supports efforts by the United States and the EU to strengthen their economic relationship, address ongoing trade disputes that have undermined the historically close U.S.-EU relationship, and move forward with mutually supportive trade initiatives in 2004 and 2005. In 2004 and 2005, ECAT also urges the Administration to strengthen its efforts to address concerns that the EU’s enlargement will result in diminished market opportunities for U.S. farmers, manufacturers, service providers and their workers in the 10 newly acceded countries.

Section 6: World Trade Organization

Implementation of WTO Agreements: Full implementation of WTO agreements is the cornerstone of the multilateral trading system and must remain a top priority on the WTO agenda. The United States should continue to insist that all WTO Members implement the WTO Agreements in a timely and comprehensive manner. Technical assistance and assistance for capacity building are important tools to help advance the United States’ implementation goals. Developing country concerns regarding implementation should be addressed through increased technical assistance and not become the pretext for renegotiating existing WTO agreements. ECAT urges the Administration to oppose efforts to reopen the TRIPs, TRIMs, or other agreements or to delay full implementation of these agreements. Finally, ECAT looks forward to full implementation of the WTO commitment to lift global textile and apparel quotas at the end of 2004.

WTO Institutional Reforms: ECAT supports efforts to expand participation by WTO Members in the WTO process and to increase overall transparency in the WTO, as well as transparency in the dispute settlement process.

WTO Accessions: ECAT supports the timely accession of Russia and other major countries to the WTO on terms comparable to that agreed to with China and other WTO members.

Status of WTO Committees and Working Parties: ECAT supports efforts to make the WTO more transparent and to conclude work on the rules of origin harmonization in a timely manner. On issues of labor and environment, ECAT believes that these issues are, for the most part, best addressed in alternative fora and through alternative policy approaches. In those cases, however, where there is complementarity between these issues and WTO objectives, efforts should be made to address these objectives jointly and in a cooperative manner as is being considered in the context of negotiations on the interrelationship between WTO rules and multilateral environmental agreements.

Dispute Settlement: ECAT believes that the WTO dispute settlement mechanism has been effective in resolving many disputes, but has had difficulty in addressing a few highly political disputes, particularly those between the United States and EU. ECAT supports efforts by the United States and EU to address these issues quickly and in a trade-liberalizing manner.

ECAT does not believe that the formation of a body to review WTO decisions adverse to the United States is either necessary or appropriate. If established, any such mechanism should require a review of all relevant cases, not just those adverse to the United States, include only members who are impartial and are experts in trade and international law, and provide a thorough, objective and non-political review of WTO cases.

Section 7: Sanctions Reform

Sanctions Reform: ECAT believes that sanctions that do not have multilateral support are generally ineffective and counterproductive. ECAT supports the deliberative and disciplined framework for consideration of unilateral sanctions set out in the sanctions process reform legislation. ECAT welcomes the Administration’s decision to lift sanctions on Libya. ECAT also supports further efforts to exempt agricultural, medical and other products from unilateral sanctions. ECAT supports efforts to terminate existing unilateral sanctions, particularly those with respect to Cuba.

Section 8: Export Promotion and Financing

Export Promotion and Financing: ECAT supports full funding for the Ex-Im Bank and OPIC, which help support the competitiveness of U.S. companies. ECAT also supports full funding for the Trade and Development Agency, which provides important project funding and trade technical assistance to developing countries in a manner that helps support U.S. exports. ECAT also supports full funding for the multilateral development banks and development funds, as well as efforts to use these organizations to address human capital issues, including health, labor and environmental matters.

Section 9: Export Controls

Export Controls: ECAT supports efforts to liberalize controls on encryption products and urges the Administration and Congress to repeal the 1998 National Defense Authorization Act requirements related to computers and the MTOPS methodology for imposing controls on high performance computers and give the President the flexibility to develop effective controls in this area, as he has in all other product categories. In the short term, the Administration should continue to expedite upward adjustments in the current MTOPS threshold in line with technological advances.

ECAT welcomes the Administration’s removal of license controls for the export of general-purpose microprocessors to most destinations, as supported by most Wassenaar member countries.

ECAT supports ongoing efforts to re-authorize the Export Administration Act this year, recognizing that such legislation needs to be bipartisan and reflect a consensus among the Congress, the Administration, and the business community. Such legislation should provide an export control system that promotes U.S. national security and maintains U.S. technological leadership. It should codify recent export control liberalization, provide for a higher threshold for the imposition of foreign policy controls, create a mass-market product provision, ease the ability to obtain foreign-availability determinations, and reduce export-licensing processing time. Such legislation must not become the vehicle for further unilateral restrictions on U.S. exports.

Section 10: Regional Trade Arrangements and Country-Specific Issues

Caribbean Basin Trade Partnership Act: ECAT supports U.S. efforts to promote greater economic reform and growth in the Caribbean Basin. In particular, ECAT supports full implementation of the Caribbean Basin Trade Partnership Act in a manner that will promote greater U.S. trade with the Caribbean Basin. ECAT remains concerned that the U.S. Customs Service is interpreting the CBTPA in a manner that is not consistent with the legislative intent of the Act. The U.S. Customs Service appears to be interpreting the Act in the narrowest sense, which is contrary to the intent of the Congress as expressed in the preamble to the legislation. ECAT supports efforts to improve the implementation of the CBTPA to ensure that beneficiaries of these provisions are not penalized for the use of U.S. components or required to release business confidential information. ECAT also supports continued efforts to expand the benefits provided by this legislation.

Andean Trade Partnership and Drug Eradication Act: ECAT supports full implementation of the Andean Trade Promotion and Drug Eradication Act in a manner that fosters greater trade and investment between the United States and the Andean countries and supports greater economic growth and opportunities for the Andean countries.

Asia-Pacific Economic Cooperation Forum: ECAT supports the Asia Pacific Economic Cooperation (APEC) forum as a vital part of expanding trade and investment in the Asia-Pacific region. ECAT supports ongoing efforts to achieve early voluntary sectoral liberalization and to reach an agreement with all WTO members on the eight sectors targeted for liberalization under the Accelerated Tariff Liberalization (ATL) initiative. ECAT also endorses the U.S. effort to reach an agreement to move forward with liberalization in other sectors, including food and automotive products. ECAT also strongly supports APEC’s transparency and trade facilitation programs.

China: ECAT supports the full implementation of China’s WTO commitments and other constructive reforms to promote the rule of law and level the playing field for U.S. companies. ECAT welcomes the constructive and multiple initiatives of the U.S. Trade Representative and the Department of Commerce and other parts of the Administration to promote China’s compliance with its WTO and other commercial commitments, as well as broader reforms in China, including initiatives developed at the April 2004 meeting of the U.S.-China Joint Commission on Commerce and Trade, the recent discriminatory taxation case filed with the WTO and the new Office of China Affairs at the Office of USTR. ECAT also strongly supports full funding for the commercial, labor, legal system and civil society programs authorized by the U.S.-China Relations Act. ECAT welcomes the Administration’s decision to reject the section 301 petition on labor practices as an inappropriate and ineffective way to address worker rights in China. ECAT also believes that the expected section 301 petition on currency practices does not represent an appropriate or effective approach.

Section 11: Intellectual Property

Intellectual Property: ECAT supports the strong intellectual property commitments included in recent free trade agreements and the negotiation of similar protections in future free trade agreements. ECAT also supports U.S. efforts to secure full implementation of the TRIPs Agreement by insisting on adherence to existing transition deadlines, opposing any moratorium on dispute settlement cases, and making aggressive use of WTO dispute settlement procedures to enforce the agreement. ECAT urges the Administration to make every effort to encourage additional countries to ratify and implement fully the WIPO Patent Cooperation Treaty and the WIPO Internet treaties and to continue to promote strong intellectual property protection for digitized trade. ECAT supports efforts to combat piracy of optical-media products through effective enforcement and regulation, and to combat end-user software piracy, particularly by foreign governments.

Section 12: Taxation of Foreign Source Income

Taxation of Foreign Source Income: ECAT strongly supports efforts to resolve our longstanding dispute with the EU over U.S. taxation of foreign source income in a manner that promotes, and does not undermine, the competitiveness of U.S. companies. ECAT supports legislation, such as the provisions that had been included in the vetoed tax reform bill in 1999 and in more recent tax reform and simplification proposals that would make U.S. companies more competitive. ECAT also strongly supports the bilateral tax treaty program that promotes greater certainty, the avoidance of double taxation and the prevention of discriminatory treatment.