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1 1 (May 6, 2019)

handle is hein.crs/govzoz0001 and id is 1 raw text is: Congressional Research Service Enforig USthe egstiverdebate Snce 1914 Enforcing U.S. Trade Laws: Section 301 and China Overview Concerns over China's policies on intellectual property (IP), technology, and innovation led the Trump Administration in August 2017 to launch a Section 301 investigation of those policies. Since then, the United States has implemented three rounds of tariff increases under Section 301 on a total of $250 billion worth of Chinese products, while China has increased tariffs on $110 billion worth of U.S. products. Several rounds of talks have been held to resolve the trade dispute. What Is Section 301 and How Does It Work? Sections 301 through 310 of the Trade Act of 1974, as amended, are commonly referred to as Section 301. It is one of the principal statutory means by which the United States enforces U.S. rights under trade agreements and addresses unfair foreign barriers to U.S. exports. Since 1974, the USTR has initiated 125 Section 301 cases, retaliating in 17 instances. Section 301 procedures apply to foreign acts, policies, and practices that the USTR determines either (1) violate, or are inconsistent with, a trade agreement; or (2) are unjustifiable and burden or restrict U.S. commerce. The measure sets procedures and timetables for actions based on the type of trade barrier(s) addressed. Section 301 cases can be initiated as a result of a petition filed by an interested party with the USTR or initiated by the USTR. Once the USTR begins a Section 301 investigation, it must seek a negotiated settlement with the foreign country concerned, either through compensation or an elimination of the particular barrier or practice. For cases involving trade agreements, such as those under the Uruguay Round agreements in the World Trade Organization (WTO), the USTR is required to use the formal dispute proceedings specified by the agreement. For Section 301 cases (except those involving a trade agreement or an IPR issue) the USTR has 12 to 18 months to seek a negotiated resolution. If one is not obtained, the USTR determines whether or not to retaliate (which usually takes the form of increased tariffs on selected imports) at a level equivalent to the estimated economic losses incurred by U.S. firms from the foreign barrier or practice. After the United States implemented the UR agreements and joined the WTO in 1995, the USTR still sometimes began Section 301 investigations but then brought the issues at hand to the WTO for dispute resolution. After 2010, the USTR brought all trade disputes involving WTO members directly to the WTO for adjudication. The Trump Administration's use of Section 301, rather than solely utilizing the WTO dispute settlement process to address the issues of concern, is a departure from past U.S. practices. Past Section 301 Use and China Prior to the UR agreements, China was a major target of Section 301 actions. In 1992 and 1994, the United States Updated May 6, 2019 threatened to impose increased tariffs against China over its IPR policies. In 1992, the United States threatened increased tariffs on $3.9 billion worth of Chinese goods over market access issues. These cases resulted in bilateral agreements before tariff hikes were implemented. In October 2010, the USTR launched a Section 301 investigation into Chinese policies affecting trade and investment in green technologies, and in December 2010, the USTR brought a WTO dispute settlement case against China, but only in regard to its wind power subsidies. In March 2012, the USTR initiated a WTO dispute case against China's export restrictions on rare earth elements (used in a number of green technology products). The United States largely prevailed in both cases. New U.S. Section 301 Measures Against China On March 22, 2018, President Trump signed a Memorandum on Actions by the United States Related to the Section 301 Investigation. Described by the White House as a targeting of China's economic aggression, the memorandum identified four broad policies that justified U.S. action against China under Section 301. It said China * uses joint venture requirements, foreign investment restrictions, and administrative review and licensing processes to force or pressure technology transfers from U.S. companies to a Chinese entity; * maintains unfair licensing practices that prevent U.S. firms from getting market-based returns for their IP; * directs and facilitates investments and acquisitions which generate large-scale technology and IP transfer to support China's industrial policy goals, such as the Made in China 2025 (MIC 2025) initiative; and * conducts and supports cyberintrusions into U.S. computer networks to gain access to valuable business information. In response to these policies, the Administration proposed to (1) direct the USTR to consider implementing tariff increases on imports from China; (2) initiate a WTO dispute settlement case against China's discriminatory technology licensing (which it did on March 23); and (3) propose new investment restrictions on Chinese efforts to acquire sensitive U.S. technology. In announcing these measures, President Trump also stated that he had asked China to reduce the trade deficit immediately by $100 billion (later raised to $200 billion over two years), and emphasized that trade should be reciprocal. On April 3, the USTR released a list of proposed 25% tariff hikes on $50 billion worth of imports from China (a level the USTR estimated was comparable to annual U.S. economic losses stemming from China's IP and technology policies). China threatened to retaliate and initiated a WTO dispute settlement case against the United States on April 4. https:!crsreports cong --sg

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