Emergency Committee For American Trade - Publications

SECTION I.2: SUMMARY OF ECAT’S 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.

PART II: INTERNATIONAL TRADE AND INVESTMENT NEGOTIATIONS

Section 1: World Trade Organization

Doha Development Agenda Negotiations: ECAT strongly supports conclusion of a comprehensive and commercially meaningful Doha Development Agenda covering 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 and digitally delivered goods and services. In particular, ECAT supports:

the elimination of tariffs, non-tariff barriers, and export subsidies in agriculture, industrial products and services;
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;
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; and
increased commitments by WTO members to the Government Procurement Agreement and reform of that agreement.

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.

Accessions to the WTO: ECAT welcomes Saudi Arabia’s entry into the WTO in 2005, which will foster important economic reform and liberalization. ECAT also strongly supports the timely accession of Russia, Vietnam and other major countries to the WTO on strong, commercially meaningful terms that are, at a minimum, comparable to those agreed to with China and other WTO members, if not improved in key areas.

WTO 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 2: Major Free Trade Agreement Negotiations

Trade Promotion Authority: ECAT strongly supports the TPA framework to enable the United States to continue to negotiate and implement comprehensive, high-standard global, bilateral, sub-regional and regional trade agreements.

Implementation of the U.S-Central America-Dominican Republic Free Trade Agreement: ECAT strongly supports the entry-into-force and full implementation of the U.S.-Central America-Dominican Republic Free Trade Agreement (DR-CAFTA). Given co-production and the interrelationship of commercial interests in the United States and the DR-CAFTA countries, particularly in the production of textiles and apparel, it is critical that the entry-into-force of the DR-CAFTA on a staggered basis improve, and not undermine, existing commercial activities. In particular, ECAT remains very concerned by implementation decisions that deny duty-free access to textile and apparel products from the DR-CAFTA countries that are provided for under the Caribbean Basin Trade Partnership Act and the DR-CAFTA because of the staggered entry-into-force. Implementation issues must be resolved in a manner that improves U.S. competitiveness and seeks to promote continued and expanded commercial interests in the region.

U.S.-Bahrain Free Trade Agreement: ECAT supports full implementation of the U.S.-Bahrain

FTA. U.S.-Oman Free Trade Agreement: ECAT supports Congressional approval and the timely implementation of the U.S.-Oman FTA.

Andean Trade Agreements: ECAT supports Congressional approval and implementation of the U.S. Peru and U.S.-Colombia trade agreements as quickly as possible. ECAT also urges the Administration to ensure that existing Ecuadorian government commitments are upheld, particularly regarding investment, so that negotiations with Ecuador produce an enforceable and commercially meaningful FTA.

U.S.-Korea Free Trade Agreement Negotiations: ECAT supports the timely completion and implementation of a comprehensive, high-standard and commercially meaningful U.S.-Korea FTA that will liberalize trade and investment, eliminate Korea’s extensive non-tariff, customs and other barriers to full market access by U.S. manufacturers, farmers, service providers and investors and strengthen disciplines on intellectual property, investment, government procurement and transparency.

U.S.-Malaysia Free Trade Agreement Negotiations: ECAT supports the timely completion and implementation of a comprehensive, high-standard and commercially meaningful U.S.-Malaysia FTA that will eliminate tariff and customs and other non-tariff barriers, further liberalize trade and investment and strengthen disciplines on intellectual property, investment, government procurement and transparency.

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 eliminate tariffs and customs and other non-tariff barriers, further liberalize trade and investment and strengthen disciplines on intellectual property, investment, government procurement and transparency. ECAT strongly urges that the investment protections already accorded to U.S. investors under the U.S.-Panama BIT not be reduced in any new commitments made as part of the FTA.

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 that will liberalize trade and investment, eliminate tariff and non-tariff barriers and strengthen disciplines on intellectual property, investment, government procurement and transparency.

U.S.-UAE Free Trade Agreement Negotiations: ECAT supports the timely completion and implementation of a comprehensive, high-standard and commercially meaningful U.S.-UAE FTA that will further liberalize trade and investment, eliminate tariff and customs and other non-tariff barriers and strengthen disciplines on intellectual property, investment, government procurement and transparency.

Free Trade Area of the Americas Negotiations: ECAT supports significant progress through FTAA negotiations to eliminate barriers to agriculture, goods and services trade and develop strong, comprehensive protections with respect to investment, intellectual property rights and transparency that will promote economic growth and development and the rule of law throughout the Western Hemisphere. ECAT also supports further concrete progress in creating a transparent and predictable customs environment in the Western Hemisphere for U.S. exporters and importers.

PART III: TRADE POLICY ISSUES

Section 1: Trade Legislation

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

Enforcement of Trade Agreements: ECAT strongly supports efforts to ensure vigorous and effective enforcement of other countries’ obligations in their trade and investment agreements with the United States, as well as other actions to address market access barriers abroad. ECAT welcomes, in particular, provisions of the United States Trade Rights Enforcement Act that seek to strengthen the enforcement capacity of the United States.

Trade Preference Program Legislation: ECAT supports the multi-year renewal of the GSP program that will expand trade and investment opportunities for U.S. farmers, manufacturers, service providers and their workers and that will help promote economic development in the developing world. ECAT also supports preferences for least developed countries that provide effective and more sustainable economic growth and opportunities. ECAT also supports trade preferences for Haiti that build upon and advance regional integration and security, such as the Haiti Hemispheric Opportunity through Partnership Encouragement Act.

Trade Remedy Law Reform: 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: ECAT is committed to working with U.S. Customs and Border Protection, the Department of Homeland Security and the Department of the 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. ECAT also strongly supports improvements in the operation of U.S. Customs, 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.

Section 2: Investment

National Security Reviews of Foreign Investment: ECAT supports the need for a fact-based and objective national security investment review process that focuses on potential national security threats of proposed acquisitions. ECAT urges that efforts to modify the existing review process proceed carefully and seek to preserve and build upon the strengths of the existing process to protect U.S. national security. In reviewing reform proposals, ECAT also urges decision-makers to consider the important national security interests that outward U.S. investments serve in promoting stability, economic growth and access to critical resources and infrastructure.

Investment Protections and Policies: 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 recognizes that Congress’ objectives on investment negotiations in the Trade Act of 2002 have been substantially incorporated into new agreements, although ECAT strongly believes that these objectives could more effectively be implemented through provisions providing stronger protections for U.S. investment abroad, particularly with respect to 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 and instead ensure that the FTAs reflect the high-standard commitments discussed above.

OECD Policy Framework for Investment: ECAT supports the OECD’s efforts to formulate and create a program to promote the utilization of a strong guidepost for developing countries to spur investment through adopting improved regimes in a number of policy areas, including investment, trade, tax, competition, human resources, governance, infrastructure and financial services.

Section 3: Government Procurement

ECAT supports the development of procurement markets around the world that operate on an open, transparent, non-discriminatory, technology-neutral and pro-competitive basis. In particular, ECAT supports the accession of our trading partners, particularly including China, Brazil, India, Vietnam, Malaysia and Russia, to the WTO Government Procurement Agreement (GPA), as well as continued work to improve the GPA and progress in the ongoing WTO General Agreement on Trade in Services negotiations to produce more open, non-discriminatory government procurement markets for services.

ECAT also supports the inclusion of strong government procurement chapters in all Free Trade Agreements (FTA), including with Korea, Malaysia, and Thailand, to provide new market access, fairness, transparency and procedural guarantees. ECAT also supports continued work by the Administration to enforce effectively existing FTA government procurement commitments.

As well, ECAT supports the work of Asia Pacific Economic Cooperation Forum in advancing strong government procurement principles throughout the Asia-Pacific region.

Section 4: 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, particularly efforts to provide national treatment for digital products and innovative pharmaceutical and other products. 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. ECAT also supports continued effort to promote increased cooperation and harmonization among between patent offices.

Section 5: Transparency ECAT strongly supports ongoing and renewed efforts to promote strong transparency provisions in numerous forums and agreements, including the World Trade Organization, U.S. Free Trade Agreements, and the Asia Pacific Economic Cooperation Forum, as well as 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.

Section 6: 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 strongly supports the Administration’s multilateral efforts to address Iran proliferation and other national security issues, but is concerned by unilateral sanctions approaches that may be counterproductive to achieving U.S. national security objectives. ECAT supports further efforts to exempt agricultural, medical and other products from unilateral sanctions. ECAT also supports efforts to terminate existing unilateral sanctions, particularly those with respect to Cuba.

Section 7: Export Promotion and Financing

Export-Import Bank Reauthorization: ECAT strongly supports the reauthorization of Ex-Im Bank for a multi-year term.

Export Promotion and Financing: ECAT supports full funding for the Ex-Im Bank and Overseas Private Investment Corporation, 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 Millennium Challenge Corporation and 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 8: Export Controls

Computer and Software Export Restrictions: ECAT urges Congress to repeal the 1998 National Defense Authorization Act requirements related to 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, ECAT welcomes the decision of the Wassenaar Arrangement and the Administration to modify the metric for measure of high performance computers from the outdated MTOPS threshold to the Weighted Teraflop metric.

Encryption: ECAT supports efforts to liberalize controls on encryption products.

Microprocessor Controls: ECAT is also concerned by the outdated threshold for microprocessor technology that represents a substantial burden for U.S. industry. ECAT believes that this technology should be treated no less favorably than microprocessor devices for export control purposes, since the former possesses the same “general purpose” characteristics as the latter. En route to achieving this goal, the Administration should immediately implement a short-term substantial increase in the CTP threshold. To the extent this technology continues to be subject to performance-based controls, it should not be subject to a metric that is different from that applied to computers.

Revisions to Deemed Export Rules: ECAT opposes recent proposals to modify the Export Administration Regulations for deemed exports or dual-use items that would undermine U.S. competitiveness without advancing U.S. security interests.

Export Administration Act: ECAT companies strongly support continued efforts to renew and modernize the Export Administration Act in a manner that recognizes technological advances, global availability of certain technology and the need for predictable, transparent and timely regulatory decisions. Such legislation should provide an export control system that promotes U.S. national security and maintains U.S. technological leadership. It should codify 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.

Wassenaar Arrangement: ECAT supports continued work through the Wassenaar Arrangement to promote greater coordination and information on country-specific export controls. ECAT recommends that the Wassenaar countries expand their efforts to promote greater coordination, and information sharing and develop common guidance where appropriate.

Section 9: Taxation of Foreign Source Income

ECAT strongly supports continued efforts to reform and simplify the international provisions of the Internal Revenue Code that currently undermine the global competitiveness of U.S. companies. ECAT supports U.S. efforts to resolve our longstanding dispute with the EU over the U.S. taxation and the prevention of discriminatory treatment against U.S. corporations. ECAT also strongly supports the bilateral tax treaty program that promotes greater certainty, the avoidance of double taxation and the prevention of discriminatory treatment against U.S. companies. ECAT supports Senate ratification this year of the protocols updating the U.S.-Swedish and U.S.-French Bilateral Tax Treaties and the U.S.-Bangladesh Bilateral Tax Treaty. ECAT also supports efforts to update the U.S. Model Tax Treaty to include the complete exemption from withholding taxes on dividends received as reflected in more recent bilateral treaties.

Section 10: Addressing Concerns about Trade and Investment Liberalization

Global Outsourcing: With economic justification 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 capacity of the U.S. economy to support better, high-paying jobs in the United States. Legislation that will help educate America’s youth, 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.

Reform of Trade Adjustment Assistance 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 and improve the effectiveness of these programs and others in addressing the needs of today’s workers.

Temporary Entry Issues: ECAT strongly urges U.S. trade negotiators, Members of Congress and the business community to expand their efforts to resolve the longstanding stalemate in the treatment of temporary entry in trade and investment negotiations. The existing moratorium on the inclusion of temporary entry provisions in trade and investment agreements undermines the competitiveness of U.S. companies and the ability of U.S. negotiators to secure the elimination of other countries’ barriers to services and investment.

Labor, Environmental, Food Trade and Health Policy Issues: 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.

PART IV: COUNTRY- AND REGION-SPECIFIC ISSUES

Section 1: 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. Of particular importance to ECAT companies are the following issues in the U.S.-China commercial relationship: (1) distribution rights, (2) intellectual property rights, (3) government procurement, (4) industrial policy, (5) burdensome and opaque customs, entry, licensing, regulatory and other requirements, (6) uneven and inadequate transparency, and (7) discriminatory consumption taxes.

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.

Section 2: The European Union

ECAT supports efforts by the United States and the EU to strengthen their economic relationship, including through regulatory cooperation activities, and to address ongoing trade disputes that have undermined the historically close U.S.-EU relationship. In 2006, ECAT also urges the Administration to strengthen its efforts to address U.S. concerns on various policies and other initiatives that undermine or have the potential to undermine access by U.S. companies into the EU or U.S. competitiveness globally, including with respect to agriculture, European aircraft subsidies, REACH, and privacy. ECAT also strongly supports the conclusion of additional “open sky” agreements throughout Europe.

Section 3: Western Hemisphere

NAFTA: ECAT finds that the NAFTA has produced substantial increases in trade and investment among the United States, Canada and Mexico in a manner that has promoted significant economic opportunities, increased economic growth and a higher standard of living. While not a panacea for all issues in the trilateral relationship, NAFTA has helped promote greater respect for the rule of law and improved cooperation on environmental and labor issues. The constitutional challenge to NAFTA Chapter 19 is unwarranted and ECAT urges the United States and Canada to increase efforts to negotiate a resolution to the underlying lumber dispute, which gave, rise to the constitutional challenge. ECAT also strongly supports work to build upon the NAFTA, including the Security and Prosperity Partnership announced by the three NAFTA governments in March 2005.

Central America and the Caribbean Basin: ECAT supports U.S. efforts to promote greater economic reform and growth in Central America and 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. Given the strong co-production and interrelationship of commercial interests in the United States and the CAFTA countries, particularly in the production of textiles and apparel, it is critical that the entry-into-force of the CAFTA on a staggered basis improve, and not undermine, existing commercial activities promoted by CBERA and CBTPA. In particular, ECAT remains very concerned by implementation decisions that deny duty-free access to textile and apparel products from the CAFTA countries that are provided for under the CBTPA and the CAFTA because of the staggered entry-into-force. Implementation issues must be resolved in a manner that improves U.S. competitiveness and seeks to promote continued and expanded commercial interests in the region. ECAT also supports U.S. efforts to promote level playing field and transparency in Central America and the Caribbean Basin countries aiming at improving the business outlook and protecting existing and future investment made by U.S. companies.

Andean Pact: 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. As discussed in section II.2, ECAT also supports the approval and implementation of the U.S.-Peru and U.S.-Colombia trade agreements. ECAT remains concerned, however, that the Ecuadorian government is failing to live up to its existing investment obligations in a manner that jeopardizes its trading relationship with the United States.

Section 4: Asia

Asia-Pacific Economic Cooperation (APEC) Forum: ECAT supports the APEC forum as a vital part of expanding trade and investment in the Asia-Pacific region. ECAT supports ongoing efforts to promote trade and investment liberalization and trade facilitation, as well as APEC’s transparency programs. ECAT strongly supports concrete work within APEC to implement APEC’s recommendations regarding investment, infrastructure, harmonization of standards for agriculture and food trade (e.g., cooked poultry), and energy issues. ECAT also supports work to implement the APEC Privacy Framework to achieve a streamlined approach to the recognition of cross-border privacy codes.

U.S.-Singapore Free Trade Agreement: ECAT strongly supports full implementation of the U.S.-Singapore FTA and continued work to improve the trade and investment relationship between the United States and Singapore.

U.S.-Australia Free Trade Agreement: ECAT strongly supports full implementation of the U.S.-Australia FTA and continued work to improve the trade and investment relationship between the United States and Australia.

Section 5: Russia, Middle East and Sub-Saharan Africa

Russia: ECAT supports continued efforts to promote the rule of law, greater transparency and accountability in the Russian government, as well as to address issues of specific concern in the U.S-Russia commercial relationship, including the protection of intellectual property rights; financial service barriers, foreign investment barriers particularly in the natural resource sector, import tariffs on commercial aircraft, and agricultural barriers. ECAT supports Russia’s accession to the World Trade Organization on commercially strong terms.

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

U.S.-Jordan Free Trade Agreement: ECAT supports full implementation of this agreement in a manner that liberalizes trade and investment flows between the United States and Jordan.

African Growth and Opportunity Act: ECAT supports full implementation of the African Growth and Opportunity Act in a manner that fosters greater trade and investment between the United States and the countries of sub-Saharan Africa and supports greater economic growth and opportunities for this region.