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Section 301 of the Trade Act of 1974
Section 301 of the Trade Act of 1974 (19 U.S.C. §2411)
grants the U.S. Trade Representative (USTR) a range of
responsibilities and authorities to investigate and take
action to enforce U.S. rights under trade agreements and
respond to certain foreign trade practices. Prior to the
Trump Administration and since the conclusion of the
Uruguay Round of multilateral trade negotiations in 1995,
which established the World Trade Organization (WTO),
the United States has used Section 301 authorities primarily
to build cases and pursue dispute settlement at the WTO.
However, President Trump has been more willing to act
unilaterally under these authorities to promote what the
Administration considers to be free, fair, and
reciprocal trade. The Trump Administration's use of
Section 301 has been the subject of congressional and
broader international debate.
The Administration has attributed this shift in policy to a
large and persistent gap between U.S. and foreign
government practices that may disadvantage or discriminate
against U.S. firms. In addition, the Administration has
justified many of its recent tariff actions particularly those
against China by pointing to alleged weaknesses in WTO
dispute settlement procedures and the inadequacy or
nonexistence of WTO rules to address certain Chinese trade
practices. It has also cited the failure of past trade
negotiations and agreements to enhance reciprocal market
access for U.S. firms and workers.
Title III of the Trade Act of 1974 (Sections 301 through
310, 19 U.S.C. §§2411-2420), titled Relief from Unfair
Trade Practices, is often collectively referred to as
Section 301. Section 301 provides a statutory means by
which the United States imposes trade sanctions on foreign
countries that violate U.S. trade agreements or engage in
acts that are unjustifiable or unreasonable and burden
U.S. commerce. Prior to 1995, the United States used
Section 301 extensively to pressure other countries to
eliminate trade barriers and open their markets to U.S.
exports. The creation of an enforceable dispute settlement
mechanism in the WTO, strongly advocated by the United
States, significantly reduced U.S. use of Section 301.
The United States retains the flexibility to determine
whether to seek recourse for foreign unfair trade practices
in the WTO and/or act unilaterally. The Statement of
Administrative Action (SAA) which explained how U.S.
agencies would implement the Uruguay Round Agreements
Act (URAA or WTO Agreements) states that the USTR
will invoke the dispute settlement procedures of the WTO
Dispute Settlement Understanding (DSU) for investigations
that involve an alleged violation of (or the impairment of
U.S. benefits under) WTO Agreements. At the same time,
the SAA makes clear that [n]either section 301, nor the
DSU will require the USTR to do so if it does not
consider that a matter involves WTO Agreements. Such a
determination appears to be solely at the USTR's
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Updated January 27, 2020
discretion. However, the USTR's decision to bypass WTO
dispute settlement and impose retaliatory measures (if any),
may be challenged at the WTO.
While the law does not limit the scope of investigations, it
cites three types of foreign government conduct subject to
Section 301 action: (1) a violation that denies U.S. rights
under a trade agreement, (2) an unjustifiable action that
burdens or restricts U.S. commerce, and (3) an
unreasonable or discriminatory action that burdens or
restricts U.S. commerce. The statute defines commerce
to include goods, services, and investment.
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Sections 302 through 309 describe the procedural
requirements and limitations for Section 301 actions.
, ,, Section 301 investigations are conducted
by a Section 301 Committee a subordinate, staff-level
body of the USTR-led, interagency Trade Policy Staff
Committee (TPSC). The Section 301 Committee reviews
Section 301 petitions, conducts public hearings, and makes
recommendations to the TPSC regarding potential actions
under Section 301. The USTR then bases its final decision
on the recommendations provided by the TPSC.
I rts:a, , The USTR may initiate a Section 301 case as a
result of a petition or can self-initiate a case. Any
interested person may file a petition with the USTR
requesting that the agency take action under Section 301.
Within 45 days of the receipt, the USTR must review the
allegations and determine whether to initiate an
investigation. Section 301 also provides two means by
which the USTR may initiate an investigation in the
absence of a petition. It can investigate any matter, but only
after consulting with appropriate stakeholders. In addition,
the USTR is generally required to initiate a Section 301
investigation of any country within 30 days after
identifying it as a Special 301 . Priority Foreign
Country. In its annual Special 301 report, the USTR
identifies countries that do not provide adequate intellectual
property rights (IPR) protection and enforcement. (Rules
for IPR cases initiated through Special 301 differ somewhat
from those that govern standard Section 301 investigations.)
Cctt . or n,&s. Upon initiating an investigation, the
USTR must request consultations with the targeted foreign
government regarding the issues raised. If the investigation
involves a trade agreement and a mutually acceptable
resolution is not reached, the USTR must request formal
dispute settlement proceedings under the governing trade
agreement (WTO or potential U.S. free trade agreement). In
the past, with regard to investigations that do not involve an
agreement, the USTR has initiated investigations while
simultaneously requesting consultations with the foreign
government and seeking information and advice from
appropriate trade advisory committees. If an investigation
includes mixed issues, some of which are covered by an
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