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1 1 (March 2, 2021)

handle is hein.crs/govecll0001 and id is 1 raw text is: T r ei thelate deece 1s14 U.S. Trade Debates: Select Disputes and Actions Introduction During the Trump Administration, the United States and some of its major trading partners engaged in a contentious war of words over trade-one that tipped over into action in 2018, mostly in the form of increased tariffs. The tariffs imposed by the United States, combined with retaliatory measures adopted by other countries (particularly with respect to China), reportedly continue to have noticeable effects on trade flows and U.S. firms. To date, most ongoing disputes related to these actions remain unresolved. Although the scale and scope of these 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 March 2021, the United States has been involved in 280 trade disputes (addressed through the WTO dispute settlement system since 1995), either as a complainant or a respondent. Most disputes are settled, or when unresolved, are contained or defused through bilateral and multilateral negotiations. Since the early 20th century, only one dispute has resulted in a worldwide tit-for-tat escalation of tariffs: the trade dispute ignited by the U.S. Smoot-Hawley Tariff Act of 1930. WITH WHOM DOES THE UNITED STATES HAVE TRADE DISPUTES? N,. 1-rofUISk,1ad- D'}sp-,.a with W1O Members ams ofMarh2B021 European Union . . . China 4. Canada . South Korea India e a Total number of cases as 280 Bazil P ewanand resonden Argentina fl Australia Againt the United States Philippines Brought by the United States Souce:CRswth dat ie_ Wod .Trade o niao(March 202t Addressing U.S. Trade Disputes 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 Updated March 2, 2021 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. Select Major U.S. Trade Disputes Prior to the Trump Administration Below is a historic overview of 10 controversial U.S. trade disputes over various trade barriers (see text box). These cases demonstrate that since the creation of the GATT in 1947, the United States, for the most part, has entered into negotiations to reduce trade barriers and has imposed unilateral, restrictive trade measures in limited instances. Smoot-Hawley Tariff Act (1930) 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.-European Union (E U) Chicken War (1962) The dispute, known as the Chicken War, began in 1962, when the European Economic Community (EEC, a predecessor to the 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). U.S.-japan Trade Conflicts of the 1980s 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 subsequent 1995 WTO Agreement on Safeguards banned the use of informal measures like VER arrangements.) U.S.-Canada Softwood Lumber Dispute (I 980s) 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 ttps:/crsreports.cong ress.gov

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