US Urges Stronger Enforcement of Trade Obligations
New Commerce manufacturing report recommends new units to track violations
WASHINGTON, DC - 01/20/04 - The Bush Administration is calling for more vigorous enforcement of US trade agreements and intensified action against unfair trade practices as part of an effort to boost the strength of the US manufacturing sector domestically and create a level playing field for its products internationally.
In a report on US manufacturing unveiled recently by Commerce Secretary Don Evans, the Administration vows to investigate aggressively unfair trade practices that undermine US trade agreements with other countries, "even where such actions are not subject to specific trade disciplines."
The report recommends establishing a task force within Commerce Department's Import Administration to investigate such alleged practices and develop a strategy to eliminate them.
During a teleconference, a senior US trade official, who asked not be identified, said that in contrast to antidumping and countervailing investigations, which aim to remedy the situation after injury to an industry occurs, the goal of such a unit would be to go after the "root problem" and provide a starting point for negotiations thus avoiding trade disputes.
The official said that an example of an unfair trade practice that cannot be clearly classified as either subsidy or dumping is the practice in China of providing state-owned companies with loans from state-owned banks, with the understanding that these loans do not necessarily need to be paid back. When the cost of capital to those companies essentially amounts to zero, US manufacturers cannot compete with them on the same basis, the official said.
"And this happens in a variety of different settings around the world, it's not just China," he said.
The report also recommends establishing an office in the Commerce Department staffed with investigators having both technical expertise and the legal skills to provide, as the official said, "raw material to build trade cases."
As part of the Commerce Department's reorganization, Commerce Under Secretary Grant Aldonas will act as the new assistant secretary for manufacturing, the official said.
The report also calls for placing US intellectual property experts in major developing countries trading with the US to provide in-country support for the protection of US intellectual property and aggressive investigation of alleged intellectual property theft, particularly in those instances where American manufacturers are compelled to divulge intellectual property as a condition of market access or investment.
It also said that the protection of intellectual property is critical to the future of the manufacturing sector because investment in research and development provides it with a competitive edge. The trade official said that manufacturing companies generate 90% of patents registered by the US patent office and that such innovation contributes strongly to US productivity.
In addition, the report recommends negotiating trade agreements benefiting US manufacturers and reinforcing efforts to promote the sale of US goods in global markets.
Recommendations concerning domestic issues essential for manufacturing sector strength include expanding tax benefits; reducing regulatory, health care and litigation burdens; enhancing federal research and development programs; and establishing a private-public sector technical education partnership.
The Bush Administration has been criticized for neglecting the manufacturing sector, which has lost about 2.5 million jobs in recent years.
In March, 2002 Secretary Evans launched an initiative to develop a comprehensive plan to strengthen competitiveness of US manufacturers.
In remarks announcing publication of the report Evans said the document is a "single step in an ongoing process: ensuring that American companies are competitive in every part of the world."
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