III. TRADE-RELATED ORGANIZATIONS
Regional Cooperation for Development
See Economic Cooperation Organization.
Rio Group. A regional cooperation organization including
Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico,
Paraguay, Peru, Uruguay, and Venezuela. Central American representation
in consultations is a rotating position, currently held by Honduras;
Jamaica represents the Caribbean nations.
SECOFI. Mexico's Secretariat of Commerce and Industrial
Services Policy Advisory Committee (SPAC).
A policy-level committee that forms part of the private sector
advisory system established by Congress to ensure that US trade
policy and negotiating objectives reflect US commercial and
economic interests. Members are appointed by the USTR, and are
broadly representative of the spectrum of service industries
in the United States.
Shoko Kaigisho. A Japanese organization roughly equivalent
to the US Chamber of Commerce. See also Keidanren.
Sogo Shosha. A Japanese trading company. The term is
customarily applied to the nine largest of such enterprises
--i.e., Mitsui and Company, Sumitomo Corporation, C. Itoh and
Company, Mitsubishi Corporation, Marubeni Corporation, Nissho
Iwai, Tomen, .Kanematsu-Gosho, and Nichimen. A trading company
may often function as leader of a keiretsu, but it is a separate entity .Most of Japan's
foreign trade is done through trading companies; the nine sogo
shoshas handle nearly half of Japanese imports and exports,
and serve as screening mechanisms for imports that might be
damaging to members of a keiretsu.
South Asian Association for Regional
A regional cooperation organization including Bangladesh, Bhutan,
India, Maldives, Nepal, Pakistan, and Sri Lanka, founded in
1985. Objectives include establishment of a preferential trade
area by 1997; the draft text of a South Asia Preferential Trade
Agreement (SAPT A) is under negotiation.
South Pacific Regional Trade and Economic
Cooperation Agreement (SPARTECA). A non-reciprocal preferential arrangement including Australia,
Cook Islands, Federated States of Micronesia, Fiji, Kiribati,
Marshall Islands, Nauru, New Zealand, Niue, Papua New Guinea,
Solomon Islands, Tonga, Tuvalu, Vanuatu, and Western Samoa,
founded in 1981. Objectives include trade, investment, and industrial
cooperation, aimed at redressing the unequal trade relationship
of Australia and New Zealand with the small island economies
in the Pacific region. Beneficiaries have been granted duty-free
access to Australia and New Zealand for all products except
sugar, textiles, clothing, footwear, steel, and passenger motor
Southern African Customs Union (SACU).
union including Botswana, Lesotho, Namibia, South Africa, and
Swaziland. SACU was founded in 1969, superseding a customs union
among the participants dating from the colonial era. In October
1992, Pretoria called for replacing SACU with a new regional
trade arrangement, indicating that financial transfers to its
SACU partners under a common income pool arrangement had become
unacceptably high. A common external tariff is in effect. SACU
has been generally successful in liberalizing intra-regional
trade, albeit behind high external trade barriers.
Southern African Development Community
A regional cooperation organization including Angola, Botswana,
Lesotho, Malawi, Mozambique, Namibia, Swaziland, Tanzania, Zambia,
and Zimbabwe. It was signed August 1992, superseding the Southern
African Development Coordinating Conference established by the
Lusaka Declaration of 1980; ratification is pending. Objectives
include economic integration through free movement of trade,
capital, and labor; policy harmonization and project coordination;
and eventual creation of a common market. Key details of implementation
protocols have yet to be negotiated.
Southern Common Market ..Mercado Common
del Sur (MERCOSUR) or Mercado Comum do Sul (MERCOSUL). A common market including Argentina, Brazil,
Paraguay, and Uruguay. The agreement was signed in March 1991;
it is to be fully implemented by December 1994 for Argentina
and Brazil, and by December 1995 for Paraguay and Uruguay.
Tariff Commission. See US International Trade Commission.
Textiles Surveillance Board (TSB). A GATT standing committee responsible for
overseeing the bilateral agreements between developed and developing
countries under the Multifiber Arrangement (Sec. I).
Trade and Investment Council. A forum for bilateral consultations between
the United States and various countries which have signed a
Trade and Investment Framework Agreement (Sec. I) with Washington.
Trade Negotiations Committee (TNC). The steering group established at the outset
of the GA 1T Uruguay Round (Sec. I) to oversee the negotiations. Also established
were a Group of Negotiations on Goods, a Group of Negotiations
on Services, and a Surveillance Body, all of which were subordinate
to the TNC.
Trade Policy Research Centre. A London-based organization established
in 1968 to promote independent research and discussion of international
economic policy issues.
Trade Policy Review Group (TPRG). The sub cabinet interagency group responsible
for developing and coordinating US policies on international
trade and trade-related investment issues. The TPRG addresses
particularly significant trade policy questions as well all
issues on which agreement is not reached in the TPSC. The
TPRG is administered by USTR and chaired by the Deputy US Trade
Representative. Member agencies, represented on the TPRG at
the Under Secretary level, include the Departments of Commerce,
Agriculture, State, Treasury, Labor, Justice, Defense, Interior,
Transportation, and Energy, the Office of Management and Budget,
the Council of Economic Advisors, and the International Development
Cooperation Agency; the National Economic Council and the National
Security Council have a joint .representative. The US International
Trade Commission is an observer. Representatives of other agencies
also may be invited to specific meetings. See also National
Trade Policy Staff Committee (TPSC).
The first-line operating group in the interagency
mechanism for developing and coordinating US policies on international
trade and trade-related investment issues. The TPSC is administered
and chaired by USTR. Member agencies, represented on the TPSC
at the senior civil servant level, include the Departments of
Commerce, Agriculture, State, Treasury, Labor, Justice, Defense,
Interior, Transportation, and Energy, the Office of Management
and Budget, the Council of Economic Advisors, and the International
Development Cooperation Agency; the National Economic Council
and the National Security Council have a joint representative.
The US International Trade Commission is a non-voting member.
Representatives of other agencies also may be invited to specific
meetings. Supporting the TPSC are more than 60 subcommittees
and task forces focusing on specific topics, to which USTR assigns
responsibilities for economic analysis through the interagency
process. Conclusions and recommendations are then presented
to the full TPSC as the basis for reaching interagency policy
consensus. See also TPRG .
United Nations Commission on International
Trade Law (UNCTRAL).
A specialized body of the United Nations established in 1966
to promote harmonization of international trade law. The Commission's
functions include coordination of the work of various international
organizations active in trade-United Nations Conference on Trade
and Development (UNCT AD). An organ of the UN General Assembly
that has convened quadrennially since 1964 to discuss international
economic and trade relations and measures that might be taken
by industrial countries to accelerate the pace of economic development
in LDCs. All members of the United Nations are members of UNCTAD;
the Trade and Development Board handles day-to-day issues between
United Nations Industrial Development
A UN specialized agency established in 1966 to promote and accelerate
the industrialization of LDCs. It provides a forum for consultations
between industrial and developing countries concerning industrial
development and provides technical assistance to LDCs. UNIDO
headquarters are in Vienna, Austria.
US Chamber of Commerce. A federation of business, trade, and professional
associations, state and local chambers of commerce, and American
chambers of commerce abroad. The Chamber represents the business
community's views on domestic and international economic policy
issues; among its activities is maintenance of a trade negotiations
information service. It is based in Washington, DC.
US Customs Service. An agency within the US Department of the
Treasury charged with enforcement of the tariff acts and other
laws relating to the importation of goods into the United States.
US International Trade Commission (ITC
An independent regulatory and fact-finding agency of the US
government whose members and staff make determinations of injury
(Sec. I) and recommendations concerning industries or workers seeking
relief from increasing import competition. In addition, upon
the request of Congress or the President, the USITC conducts
comprehensive studies of specific industries and trade problems,
and the probable impact on specific US industries of proposed
reductions in US tariffs and non-tariff barriers. The Commission
may also undertake such studies on its own initiative. The USITC
was established by the Trade Act of 1974 (Sec. IV) as the successor agency to the US Tariff
Commission. Its six members are appointed to nine-year terms
by the President with the advice and consent of the Senate.
United States Trade Representative (USTR).
An official in the Executive Office of the President with the
rank of Ambassador, responsible for advising the President on
the formulation and implementation of US trade policy and for
working with Congress accordingly. The USTR has lead responsibility
for coordinating US government positions in and conducting international
trade negotiations. USTR is also the designation for the White
House office headed by the US Trade Representative. Prior to
the Trade Act of 1979,
which established the Office of the USTR, the comparable official
was known as the President's Special Representative for Trade
Negotiations (STR), a position first established in the Trade
Act of 1962 (Sec. IV).
Vise grad Group. See Central European Free Trade Agreement.
West African Economic Community or Communaute
Economique de I' Afrique de l'Ouest (CEAO). A customs union including Benin, Burkina
Faso, Ivory Coast, Mali, Mauritania, Niger, and Senegal. It
was founded in 1973, superseding the Customs Union of West African
States. Objectives include elimination of internal tariffs and
non-tariff barriers to intra-regional trade; establishment of
a common external tariff; freer labor mobility within the region;
development of transportation and communications linkages; and
harmonization of investment rules. Intra-regional trade in raw
materials is largely duty-free. However, tariff-cutting procedures
give members wide latitude to exclude sensitive products from
liberalization, limiting coverage of manufactures and processed
goods to products with little potential for intra-regional trade.
Fewer than 500 products receive regional preferences. A community
convention permitting free flow of migrant workers is in place.
West African Economic and Monetary Union
or Union Economique et Monetaire Ouest Africaine (UEMOA). A prospective customs union including Benin,
Burkina Faso, Ivory Coast, Mali, Mauritania, Niger, and Senegal.
It was approved by heads of state at the July 1992 summit of
the West African Monetary Union; details of the treaty are under
negotiation. Objectives include establishment of a customs union,
and harmonization of tax policies and of legal and regulatory
Whitehall. Britain's Foreign Ministry.
World Bank. The International Bank for Reconstruction
and Development (IBRD), commonly referred to as the World Bank,
is an intergovernmental financial institution headquartered
in Washington, D.C. Established in 1945 as part of the Bretton
Woods system (Sec. I), its primary function is to make long-term,
low-interest loans to developing countries.
World Intellectual Property Organization
A specialized agency of the United Nations dealing with legal
and administrative aspects of intellectual property -- such
as copyrights, patents, and trademarks --and seeking to promote
international cooperation in the protection of intellectual
property rights (Sec. I). Among
its treaties and agreements, WIPO administers the International
Union for the Protection of Industrial Property (the Paris
Union) formed to reduce discrimination in national
patent practices, and the International Union for the Protection
of Literary and Artistic Works (the Berne Union) formed to reduce discrimination in national
copyright laws. WIPO is headquartered in Geneva, Switzerland.
Zaibatsu. See keiretsu.
IV. TERMS RELATED TO US TRADE LEGISLATION
Relocation, reemployment, and financial assistance to workers,
firms, and industries designed to help them adjust to import
competition. Trade Adjustment Assistance (TAA) provided by the
Trade Acts of 1974 and 1979 is designed to help an industry become more competitive
or phase workers into other economic pursuits. Proponents claim
that TAA can promote trade liberalization by facilitating shifts
of resources from less productive to more productive industries.
Critics argue that the T AA program --provided primarily in
the form of a supplement to unemployment compensation --distorts
incentives by compensating only workers who have failed to adjust
to import competition.
Trade Development and Assistance Act of 1954. See PL. 480.
American Act. Legislation
mandating preferential treatment for US products in the award
of certain government contracts. The act is waived for purchases
covered by the Government Procurement Code (Sec. I).
(See also entry under same name in Section I). Provisions under
US law authorizing temporary relief for domestic producers and
workers injured by import competition. Originally limited to
those whose losses resulted from prior US trade concessions,
escape clause eligibility was extended in Section 201 of the
Trade Act of 1974
to all who could establish that imports were "a substantial
cause of serious injury, or the threat thereof' (see injury,
Sec. /). The Trade Act of 1988 stipulated that the goal of any relief must be "positive
adjustment." If the US International Trade Commission (USITC)
finds injury and recommends relief, the President must grant
it or report to Congress why, after reviewing the US national
economic interest, he has decided there is no appropriate and
feasible action to take. Congress may override this decision
through enactment of a joint resolution, imposing the remedy
recommended by the USITC. Import restrictions imposed under
the escape clause authority usually last no longer than five
A measure attached to the Trade Act of 1988
to provide a means of monitoring foreign direct investment in
the United States. The amendment .authorizes the President to
block mergers and joint ventures with foreign interests, or
acquisitions or takeovers of US companies by foreign interests,
on grounds of national security. See Committee on Foreign
Investment in the United States (Sec. III).
Administration Acts of 1969 and 1977. Legislation
providing authority for the President to limit or suspend exports
of US commodities or technical data to foreign destinations
in order to protect national security , to ensure against a
drain of scarce goods, or to further foreign policy objectives.
Control Act. Legislation
enacted in 1949 requiring that all commercial exports from the
United States be licensed. Authority was granted to the President
-- subsequently delegated to the Secretary of Commerce --to
devise specific regulations to control exports. In the case
of certain products such as munitions or narcotics, a "validated
license" (i.e., explicit written authorization) was required
for exportation to any destination; another cases, it was not
the product but the destination (e.g., all shipments to Cuba)
that was controlled. Largely incorporated within and superseded
by the Export Administration Act.
Trading Company Act of 1982.
Legislation designed to promote US exports by encouraging the
foundation of export trading companies, and by modifying the
application of antitrust laws and reducing restrictions on export
financing for certain transactions. Title III of the Act permits
the Department of Commerce, with the concurrence of the Department
of Justice, to issue antitrust pre-clearance certificates on
certain transactions involving the export of goods or services.
Title IV of the Act amended two key elements of US antitrust
law --the Sherman Act and the Federal Trade Commission Act --to
exclude their application to export transactions, except where
such activities have an anticompetitive impact on trade in the
United States or the export trade of a US resident.
Fast-Track. Legislative procedures, originally set
forth in Section 151 of the Trade Act of 1974 and extended in the Trade Act of 1988, designed to assure foreign governments
that Congress will act expeditiously on a trade agreement negotiated
with the United States, and will not "re-negotiate"
the agreement by accepting pans of the deal while rejecting
others. These procedures stipulate that once the President formally
submits a bill to implement an international agreement concerning
non-tariff trade barriers2 negotiated under the Act's authority
, both Houses must vote on the bill within 90 days through an
up-or-down vote, without possibility of amendments. Fast-track
negotiating authority currently extends through 16 April 1994.
Corrupt Practices Act. Legislation
that prohibits US firms from making payments to foreign officials
in order to influence their actions or to assist the firm in
A statute requiring that vessels carrying goods or passengers
between US ports (see cabotage, Sec. /)
must be built and documented in the United States and be, owned
and operated by US citizens. The original Act dates from 1898,
and was, subsequently incorporated into the Merchant Marine
Act of 1920.
A provision of US copyright law that restricts importation of
certain printed materials not manufactured in the United States.
Import Act of 1979.
Legislation requiring the President to impose import quotas
on fresh, chilled, and frozen beef, veal, mutton, and goat meat
if the Secretary of Agriculture estimates annual imports will
exceed a basic import level. The basic import level --approximately
7 percent of US domestic production --is modified annually by
a production adjustment factor and a counter cyclical factor.
Trade and Competitiveness Act.
See Trade Act of 1988.
hypothetical limit beyond which a reduction in tariff protection
would cause serious injury to a domestic industry. US legislation
in 1949 required the Tariff Commission to establish "peril
points" for all US industries, and for the President to
submit specific reasons to Congress if and when any US tariff
was reduced below such levels. This requirement was an important
constraint on US negotiating positions in early GATT Rounds
( Sec .I ), and was finally eliminated by the Trade
Act of 1962.
Full name is the Agricultural Trade Development and Assistance
Act. Legislation enacted in 1954 to assist LDC economic development
through the ~ concessional sale or grant of US farm products.
Title I of the Act authorizes low-interest, long-term financing
of US farm exports to LDCs; payments for such sales are earmarked
for use in the importing country to fund agricultural development
projects and programs. Title II of the Act permits donation
of US food products to countries suffering from famines or natural
disasters. Title III established the Food for Peace Program
and the Export Credit Guarantee Program of the Commodity
Credit Corporation (Sec./V).
Legislation delegating authority to the President --for a specified
period and subject to certain guidelines --to negotiate and
implement tariff reductions without having to seek congressional
approval. (For provisions concerning trade agreements dealing
with matters other than tariffs, see Fast-Track.)
Procedures through which law is made by regulatory agencies
applying general statutes to specific cases. On trade issues,
procedures administered by the International Trade Commission
and the Department of Commerce determine the eligibility of
petitioners for import relief under the escape clause, countervailing
duty , antidumping, or other trade statutes.
Trade Agreements Act.
See Trade Act of 1934.
provision of the Agriculture Act of 1933 requiring the President
to limit imports of agricultural products that could undermine
or interfere with US farm programs.
See escape clause.
A provision of the Trade Act of 1974
providing authority to the President to negotiate Orderly
Marketing Agreements (Sec. I) with
foreign governments. OMAs are to be limited initially to a period
of five years, and import relief must be phased down after three
years unless the President determines that doing so would damage
national interests. If such a determination is made, import
relief may be extended for an additional three years. Products
covered by contractually binding OMAs are listed in a separate
appendix of the Tariff Schedules of the United States.
provision of the Agricultural Act of 1956 authorizing the President
to negotiate bilateral agreements to limit exports to the United
States of "any agricultural commodity or product manufactured
there from or textiles or textile products." US participation
in the Multifiber Arrangement (Sec. I) is based on Section 204 authority.
A provision of the Trade Act of 1962
authorizing the President to restrict imports that threaten
to impair US national security .On the basis of a formal investigation
and report by the Department of Commerce --required within 270
days of initiation --the President must decide within 90 days
what action should be taken to prevent national security impairment.
Legislation establishing domestic procedures to enforce US rights
under international trade agreements as well as to eliminate
unfair foreign government trade practices that adversely affect
US investment and exports of goods and services. Under Section
301 of the Trade Act of 1974
as amended by the Trade Act of 1988
--the US Trade Representative is required to take appropriate
action to obtain the removal of any policy or practice of a
foreign government that violates a bilateral or multilateral
trade agreement or is "unreasonable, unjustifiable, or
discriminatory" and "burdens or restricts US commerce."
Section 301 authorizes the President to retaliate against foreign
countries that impose such burdens; such retaliation can take
the form of suspending the benefits of trade concessions previously
granted by the United States, or restrictions or fees on the
trade of the offending nation. In addition to initiating Section
301 investigations based upon petitions by private parties,
USTR also may initiate such investigations at its own discretion.
See Special 301
and Super 301; see also discussion under retaliation
A provision of the Tariff Act of 1930
authorizing self-initiated or Presidentially-directed studies
of domestic industries by the US International Trade Commission.
Such studies may subsequently lead to investigations of foreign
dumping or subsidization, or Section 301 cases.
A provision of the Tariff Act of 1930
making it unlawful to engage in unfair acts or unfair methods
of competition when importing or selling imported goods. Most
Section 337 cases involve alleged violations of US patents,
copyrights, or trademarks. See also Special 301.
A provision of the Trade Act of 1974
giving the President authority to restrict imports of products
from nonmarket-economy countries when the US International Trade
Commission determines such imports cause or threaten market
--.disruption (Sec. I).
A provision of the Trade Act of 1974
providing for duty-free entry of merchandise imported from beneficiary
developing countries under the Generalized ~
System of Preferences or
GSP (Sec.1). Section
501 specifically excludes some countries --as well as certain
products regardless of origin --from asp eligibility .Criteria
are provided for withdrawing or suspending eligibility for asp
Legislation enacted in 1890 making illegal all contracts, combinations,
and conspiracies in restraint of trade, as well as monopolies
and attempts to monopolize. See competition policy (Sec.
Formally known as the Tariff Act of 1930, the Smoot-Hawley tariff
is regarded by many scholars as the high-water mark of an extremely
protectionist period in US trade policy; all major trading nations
were highly protectionist at the time, however. The Act raised
tariffs on over 20,000 items to record levels, provoking retaliatory
tariff increases by other countries. The cycle of retaliation
and counter- retaliation led to a decline in world trade by
roughly two-thirds, contributing significantly to the spread
and deepening of the Great Depression.
A provision of the Trade Act of 1974,
as amended by the Trade Act of 1988,
requiring USTR to identify countries with a history of violating
existing laws and agreements dealing with intellectual property
rights (Sec. I). Countries with the poorest record of IPR
protection --and with which negotiations on IPR protection have
failed to make adequate progress --must be designated as "priority
foreign countries" and are potentially subject to a Section
301 investigation on an accelerated timetable.
USTR must make such designations each year within 30 days after
issuance of the National Trade Estimate report (see Sec. I). In addition, USTR has established a "watch
list" and "priority watch list" under Special
301, indicating countries in which there exist particular problems
with respect to IPR protection, or problems of market access
for exporters relying on intellectual property. Countries placed
on the "priority watch list" are the focus of increased
bilateral discussions concerning the problem areas.
See Section 301. Under this amendment to the Trade
Act of 1988,
the US Trade Representative was required in 1989 and 1990 to
designate "priority foreign countries" chosen for
the number and pervasiveness of their policies or practices
impeding US exports, and for the US export gains that might
come from removal of those practices. The law called for retaliation
(Sec. I) if
foreign action was insufficient or not forthcoming.
Act of 1930.
See Smoot-Hawley Act.
Act of 1934 (Reciprocal Trade Agreements Act, or RTA). Legislation that provided authority for
the President to enter into bilateral agreements for reciprocal
tariff reductions. The RT A was enacted in the midst of the
Great Depression, and reflected declining public sympathy with
protectionism in the wake of the Smoot-Hawley Act. By
1939, the United States had concluded 21 trade agreements with
other countries under the RTA, and another 11 agreements were
reached during the course of World War II.3 Through successive
extensions and amendments, the RTA also authorized US participation
in the first five GATT Rounds (Sec. I) of multilateral trade negotiations. It was
eventually superseded by the Trade Act of 1962.
Act of 1962 (Trade Expansion Act).
Legislation granting the President authority to participate
in multilateral trade negotiations subsequently known as the
Kennedy Round (Sec. I), while also amending US escape clause
procedures and establishing the Trade Adjustment
Assistance (T AA) program. The Act also authorized appointment
by the President of a Special Representative for Trade Negotiations
(see discussion under USTR, Sec. II).
Act of 1974 (Trade Reform Act). Legislation
granting the President authority to participate in the Tokyo
Round (Sec. I) and negotiate international agreements to
reduce tariffs and non-tariff barriers. The Act, enacted in
January 1975, also amended US law governing the escape clause,
antidumping duties, and countervailing duties;
expanded trade adjustment assistance; established guidelines for granting MFN
trade status to East Bloc countries; and granted limited trade
preferences to developing countries (see GSP ,
Act of 1979 (Trade Agreements Act).
Legislation adopted under fast-track procedures ratifying and implementing the international
trade agreements negotiated during the Tokyo Round (Sec.
I) and making US law consistent with those
agreements. (The agreements negotiated during the Tokyo Round
were not self-executing and, accordingly, did not have independent
effect under US law. The Act thus incorporated into US law the
Tokyo Round agreements on countervailing and antidumping duties,
customs valuation, government procurement, product standards,
civil aircraft, meat and dairy products, and liquor duties.)
The Act also extended the President's authority to negotiate
agreements covering non-tariff barriers, and mandated reorganization
of executive branch trade functions. The Act became effective
on 19 June 1979.
and Tariff Act of 1984.
Legislation that extended the President's authority to grant
trade preferences; authorized negotiation of bilateral free
trade agreements (Sec. I); and provided authority to enforce export
restraint agreements on steel. The Act also amended the countervailing
duty and antidumping laws and clarified conditions under which
unfair trade cases could be pursued under Section 301.
Act of 1988 (Omnibus Trade and Competitiveness Act). The first comprehensive ("omnibus")
trade legislation enacted by Congress in the postwar era. Its
important features included strengthening of unilateral trade
retaliation instruments (see Section 301
); provision of fast-track negotiating
authority for US participation in the Uruguay Round (Sec.
I ); and enhancement of the authority of the
US Trade Representative.
With the Enemy Act.
Legislation originally enacted in 1917, and amended in 1941,
granting the President authority to prohibit or regulate trade,
investments, remittances, travel, or any other economic transaction
with any designated country or its nationals during times of
war or national emergency.
Act. Legislation enacted in 1916 exempting from restrictions
on monopolies and other trusts the activities of associations,
which have "the sole purpose of engaging in export trade,"
provided their activities do not interfere with US markets.