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1 1 (July 20, 2020)

handle is hein.crs/govdayf0001 and id is 1 raw text is: 01; F ie sea~rch Se~ mppm qq\ p\w -- , -ammm, goo I aS 11LULANJILiN, Updated July 20, 2020 U.S. Trade Debates: Select Disputes and Actions Since 2017, the United States and some of its major trading partners have engaged in a contentious war of words over trade-one that tipped over into action in early 2018, mostly in the form of increased tariffs. The tariffs imposed by the Trump Administration, combined with retaliatory measures adopted by other countries, are reportedly having noticeable effects on trade flows and U.S. firms. Although the scale and scope of these recent unilateral U.S. tariff increases are unprecedented in modern times, tensions and irritants in international trade relations are not uncommon. Over the last 100 years, the United States has been involved in a number of trade disputes. According to the World Trade Organization (WTO), as of July 2020, the United States is-or has been involved in 279 trade disputes (addressed through the WTO dispute settlement system), either as complainant or as a respondent. Most disputes are settled, or when unresolved, are contained or defused through bilateral and multilateral negotiations. From the early 20th century until this year, one dispute resulted in a worldwide tit-for-tat escalation of tariffs: the trade dispute ignited by the U.S. Smoot-Hawley Tariff Act of 1930. WTfH W'HOM t S THE UNITEO STAThS HAVE TRADE tSPJTS? Europeiw Union .... C h;ina ........... ............ Canada ........... .. . . . .. .. . .. .. L '. . ..'. .:: :. . .: .:: ..: .. .: . . ............ ,x<,..,<<+:.,:,:,:.,..,..,.,., Australia :: ,:i~i:' Against tha United Stares Philippires : . B::rouyjht by the United States Source: CRS with data from the World Trade Organization (July 20, 2020). The United States has used unilateral measures and has engaged with trading partners in bilateral and multilateral fora to address trade-related concerns. U.S. federal statutes provide for trade remedy measures to address potential adverse effects (i.e., material injury or threat thereof) on domestic industry of unfair foreign trade practices, such as antidumping (AD) and countervailing duties (CVD), or to reduce the flow of fairly traded imports that threaten to impair U.S. national security or cause serious injury or threat thereof (safeguard measures). In addition, the United States has conducted bilateral discussions with many of its trading partners to manage frictions over discrete issues and achieve expanded market access for U.S. firms. More often, the United States has resorted to the multilateral forum provided by the WTO or its predecessor, the General Agreement on Tariffs and Trade (GATT), to settle trade disputes. As part of the dispute settlement process, WTO members may seek authorization to retaliate if trading partners maintain measures determined to be inconsistent with WTO rules. Below is a historic overview of 10 controversial U.S. trade disputes. These cases demonstrate that since the creation of the GATT in 1947, the United States has, for the most part, entered into negotiations to reduce trade barriers and has imposed unilateral, restrictive trade measures in limited instances. 'S,,n,* *k,-,-,-awte,y Tariff A (t 930) The Tariff Act of 1930, commonly known as the Smoot- Hawley Tariff Act, is recognized by economists as having triggered a global trade war one that deepened the Great Depression. Originally meant to help heavily indebted farmers hit by falling commodity and land prices, the Act's scope was eventually expanded to include thousands of products from numerous sectors. While the United States reduced its import dependence, other countries retaliated with increased tariffs on their imports, and by 1933, U.S. exports had declined by at least 60%. GATT negotiations eventually reduced tariffs on a multilateral basis. U,S,N'LCh keN' Wa, ( 962) The dispute, known as the Chicken War, began in 1962, when the European Economic Community (EEC, a predecessor to the European Union, EU) sharply raised its common external tariff on poultry. The United States retaliated in 1963 after consultations with the EEC failed to resolve the dispute and a GATT dispute panel of experts had convened. The United States raised tariffs on potato starch, brandy, dextrine, and light trucks. The truck tariff (25%) still in place today applies to all U.S. truck imports, unless reduced or phased out by a U.S. free trade agreement (FTA). U1,,,jkp~, ra~dkz Ccdfiz o ' 980's As the Japanese economy, along with its auto industry, took off, trade tensions between Japan and the United States escalated significantly during the early 1980s. In an effort to persuade Congress not to legislate retaliatory measures, both countries held intense bilateral consultations and reached agreements to try to improve market access for U.S. products and limit auto imports. They negotiated several voluntary export restraint (VER) agreements, which required Japan to limit its auto (and steel) exports to the United States. Japan also agreed to increase U.S. imports and eliminate barriers to U.S. firms operating in Japan. (The 1995 WTO Agreement on Safeguards banned the use of informal measures like VER arrangements.) US,,(: ,.' .. S - ,..;,.;d L,,.,,,,be,-° Mi'p. . , Since the 1980s, there have been five major disputes or lumber wars between the United States and Canada. The U.S. softwood lumber industry has alleged since 1982 that Canadian lumber exporters benefit from unfair subsidies. After intense negotiations, in 1986 the United States and Canada concluded the first of several agreements

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