WTO TPR

US Trade Bounces Back, Protectionism Grows

The WTO report on US TPR issued on 18 December noted improvements in the state of the US economy since the 2010 review. Specifically, merchandise and services trade figures have rebounded, surpassing previous 2008 peak levels.

However, the merchandise trade deficit worsened over that time, given that import growth outpaced export growth - with imports reaching US$2.236 trillion in 2011, compared to the US$1.497 trillion of exports. Services trade, meanwhile, showed a notable surplus in recent years, which the WTO report predicts will increase further.

Despite the US showing overall some signs of recovery, “it will take more time [for the US] to emerge from the downturn and to return to growth and confidence levels seen prior to the crisis,” the report added. The housing market and unemployment levels are areas where the US economy remains weak, the WTO noted, and the impact of the EU’s own economic struggles on third country markets took a toll on growth in 2012.

The “fiscal cliff” is a series of pencilled-in tax hikes and spending cuts that are set to go into effect on 1 January unless legislators in Washington reach a deal beforehand. Over the past several weeks, the two chambers of the US Congress and the White House have been holding negotiations to clinch a package that would avert the impending measures. However, long-standing differences of opinion between Republicans and Democrats regarding tax policy have slowed down the talks.

The secretariat report found significant tariff peaks in sectors such as footwear, leather, textiles, and clothing, and in agriculture, where there are many non-ad valorem tariffs, while finding that US tariffs were on average relatively low. Some of the members that spoke on Tuesday noted that these particular tariff peaks can have negative implications for the US’ trading partners, notably developing countries.

Regarding the use of trade remedy investigations - a topic that has also drawn attention in earlier reviews - the WTO secretariat report found that the initiation of anti-dumping investigations rose from three to 15 cases in 2011, following just a few initiations the previous year. Both countervailing - or anti-subsidy - duty investigations and anti-dumping duty investigations launched over the past five years, the WTO report found, primarily involved imports from Asian countries, particularly China.

The complexity of the US’ rules of origin was another topic addressed in the review, with the WTO report noting that the “proliferation of differing rules of origin, their complexity, and lack of transparency continues to be of concern for some” - an issue that was also raised in several interventions.