TRADE: U.S. Says Many Countries Blocking Free Trade

By Emad Mekay Reprint | | Print |

Emad Mekay

Apr 3 2002 (IPS) - The United States is complaining that several of its trading partners have imposed new trade barriers or are taking other measures that hamper free trade.

Barriers such as non-scientific sanitary standards, government monopolies and non-transparent regulations are all being widely used as “a strategy to hamper trade” with the United States, says the 2002 National Trade Estimate (NTE) Report on Foreign Trade Barriers.

The report evaluates the actions of 55 major U.S. trading partners and sharply criticises many of them for obstructing trade.

It says, for example, that while most African countries are introducing economic and political reforms and reducing tariffs, U.S. exports were held back by “onerous customs delays, ineffective enforcement of intellectual property rights, and corruption”.

The United States itself is under sharp criticism from different trading partners for last month’s decision to slap tariffs of up to 30 percent on some steel imports. It is also widely criticised for not opening its markets to imports from developing nations – a move the World Bank says would be a sure way to end poverty.

But U.S. Trade Representative Robert B. Zoellick said in a press release that “the Bush administration continues to move forward to advance trade and free markets”.

The United States wants South Africa, its largest export market in sub-Saharan Africa, to tackle U.S. poultry industry concerns about the December 2000 imposition of anti-dumping duties against certain chicken parts from the U.S., the report says.

Washington is also alarmed by the refusal of South Africa’s monopoly telecommunications provider, Telkom, to lease lines to competitive providers of value-added network services, adds the 460-page report. The incident casts doubt over the African nation’s ability to lure foreign investment to its budding technology sector, it adds.

Other developing countries surveyed in the report, including Brazil, Mexico, India and China have almost all received sharp rebukes.

India was faulted for high taxes and tariffs, non-tariff barriers affecting most trade and what the report described as “serious deficiencies in intellectual property rights protection”.

On Monday, India announced plans to remove export restrictions and cut red tape in a move intended to boost its share of global trade and to spur the electronics hardware industry, to help it catch up with India’s software sector, a top global player.

The report says that Brazil still maintains high-applied tariffs (such as a 35 percent tariff on motor vehicles) and tariff bindings, as well as various non-tariff barriers. The Latin American heavyweight has high information technology tariffs (30 percent) which, combined with other taxes, add 100 percent to the cost of personal computers.

Non-tariff trade irritants include “non-transparent import licensing”, an unofficial yet de facto imposition of minimum import prices on certain sensitive products, and restrictions on payments for imports.

“Overall, Brazil’s customs regime continues to be problematic among U.S. exporters for being non-transparent, burdensome, and costly,” says the report..

Although Mexico is the United States’ second largest trading partner – largely because of the North American Free Trade Agreement that also includes Canada – the report blames the southern neighbour for restricting access of certain U.S. goods and services, including the international telecommunications services market.

The United States is currently challenging those measures in the World Trade Organization (WTO) says the report.

China, another substantial trading partner, was accused of using import standards and sanitary requirements to create import barriers. The report says the country imposes “duplicative and expensive quality and safety inspection procedures” that can lead to imports such as grain, poultry, and citrus being arbitrarily blocked.

Analysts say Washington may use the report as a bargaining chip to pressure countries into further opening up their markets for powerful U.S. corporations and to defend its own protectionism.

“When you are playing hardball in trade, you tend to try anything,” said Dean Baker, co-director of the Washington-based think tank, the Centre for Economic and Policy Research.

“The list would probably used to apply pressure if certain countries do not play by U.S. rules,” he added.

The report also focuses on a lack of transparency, saying that inconsistent notification and application of existing laws and regulations continue to create problems for businesses.

It singles out Korea for its lack of transparency in rule making and inconsistent application of its regulatory system. “U.S. pharmaceutical companies particularly have been adversely affected by the lack of transparency and piecemeal development of policies related to Korea’s health care reform,” says the report.

The United States has longstanding concerns about the Korean government’s excessive influence and involvement in many industries, including steel and telecommunications.

The report says that despite positive steps, Korea’s high taxes severely restrict U.S. companies’ access to the country’s automotive market. While Korean automobile exports to the U.S. again hit record levels in 2001, the Asian nation only imported 7,747 vehicles from all foreign sources, representing 0.7 percent of the market.

The report question Russia’s licensing regime and standards and certification procedures, as well as its sanitary, services and investment barriers, although the country agreed to remove its import ban on U.S. poultry on March 31.

And it faults Ukraine because of a recently imposed ban on imports of U.S. poultry meat “based on unjustified food safety claims”.