United States
II.
DEVELOPMENTS IN TRADE AND INVESTMENT POLICY
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(1) O
VERVIEW
1.
The United States considers that the multilateral trading system and WTO membership are at the core of U.S. international trade relations. Multilateral trade negotiations are a stated priority of the
Administration, in particular, the successful completion of the Doha Development Agenda (DDA) before the end of 2006. The United States has also made progress in implementing several WTO rulings calling for changes to U.S. legislation but a few rulings have not been fully implemented.
2.
The Administration views the Trade Promotion Authority (TPA), a successor to "fast-track" authority, as an essential instrument to attaining its trade objectives and on 1 April 2005 requested and obtained the extension of this Authority to 1 July 2007. The TPA legislation provides a means for the
United States to promote a wide array of U.S. values through its trade agenda. It also brings greater predictability to the various trade negotiations the United States is currently conducting.
3.
The United States is committed to a strategy of trade liberalization at the multilateral, regional, and bilateral levels, thus exerting its leverage for openness. In pursuit of this strategy, the
United States has increased the number of countries with which it has concluded free-trade agreements (FTAs) from three at the start of the current Administration in early 2001, to 15 by late
2005. Of these, six FTAs have been implemented (with Israel, NAFTA, Jordan, Chile, Singapore, and Australia). As of January 2006, agreements with 12 other countries were being negotiated. The
United States also grants unilateral preferences to developing countries under a number of schemes; these preferences may be conditional on compliance with various U.S. policy objectives.
4.
The United States maintains a policy of national treatment for foreign direct investment, subject to some sector-specific restrictions, such as in energy, mining, and fishing as well as air, maritime, and financial services. Restrictions to national treatment apply with respect to eligibility for certain official support programmes. Moreover, in a limited number of cases, FDI is subject to reporting requirements or review to take account of national security concerns.
(2) I NSTITUTIONAL AND P OLICY F RAMEWORK
(i) Institutions and recent changes
5.
The Office of the United States Trade Representative (USTR), which is part of the Executive
Office of the President, is responsible for developing and coordinating U.S. international trade, commodity, and direct investment policy, and overseeing negotiations with other countries. The head of USTR is the U.S. Trade Representative, a Cabinet member who serves as the President's principal trade advisor, negotiator, and spokesperson on trade issues. USTR consults with other government agencies on trade policy matters through the Trade Policy Review Group and the Trade Policy Staff
Committee, administered and chaired by USTR and composed of 19 federal agencies and offices.
The National Economic Council (NEC), chaired by the President may consider important or controversial trade-related issues.
6.
USTR works in close consultation with Congress. Under the U.S. Constitution (Article I,
Section 8), Congress has the ultimate authority to regulate trade with foreign nations, while the
President has the responsibility and authority to undertake negotiations and conclude agreements with foreign governments. USTR provides regular briefings for the Congressional Oversight Group, composed of members from several congressional committees, and chaired by the Chairman of the
House Ways and Means Committee and of the Senate's Finance Committee.

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Trade Policy Review
7.
The Committee on Foreign Investment in the United States (CFIUS) implements the Exon-
Florio provision of the Omnibus Trade and Competitiveness Act of 1988, which authorizes the
President to restrict FDI that threatens national security. The CFIUS is an inter-agency body whose membership comprises the Departments of Commerce, Defense, Homeland Security, Justice, State, and the Treasury; the Council of Economic Advisors; the National Security Council; the National
Economic Council; the Office of Management and Budget; the Office of Science and Technology
Policy; and the USTR. The CFIUS is chaired by the Treasury Department.
8.
Trade policy formulation also receives inputs from the private sector through a policy advisory committee system consisting of the President's Advisory Committee for Trade Policy and
Negotiations (ACTPN), administered by USTR; four policy advisory committees; and 22 technical and sectoral advisory committees.
1
(ii) Policy objectives
9.
The United States continues to pursue a policy of advancing open markets and the rule of law as part of a broader global security objective. The United States considers that opening foreign markets to U.S. products and services will enhance economic growth and prosperity. Reflecting these perspectives, the main U.S. negotiating objective with respect to international trade is the removal of trade barriers in goods, services, and foreign investment as well as the extension of the rules-based trading system. This broad objective is accompanied by a range of policy priorities, including the protection of intellectual property, enhancing transparency, the avoidance of regulatory measures as a means to advantage domestic producers, liberal conditions for electronic commerce, and the continued incorporation of government procurement, labour, and environmental issues into future
U.S. trade agreements.
10.
To achieve its trade policy objective of dismantling trade barriers, the United States is engaging in a policy of pursuing free-trade initiatives globally, regionally, and bilaterally. In its 2005
Trade Policy Agenda, USTR noted that these initiatives reinforce each other, and that "by pursuing multiple free trade initiatives, the United States has created a competition for liberalization, launching new global trade negotiations, providing leverage to spur new negotiations and solve problems, and establishing models of success in areas such as intellectual property, e-commerce, environment and labor, and anti-corruption".
2
11.
Multilateral trade negotiations are a priority of the Administration in its quest to open markets and strengthen rules. The Administration believes that market access issues, including agricultural reform and liberalization, expanded market access for trade in manufactures and services and new rules on trade facilitation, form the basis of a negotiation that can achieve significant gains for U.S. interests and the global economy. Accordingly, the Administration has made advancing the WTO's
Doha Development Agenda (DDA ) a top priority, as well as bringing the negotiations to a successful conclusion before the end of 2006.
3
12.
The Administration considers Trade Promotion Authority an essential instrument to attaining its trade objectives. The Bipartisan Trade Promotion Authority Act of 2002 sets out specifically a variety of overall trade negotiating objectives that call for future U.S. trade agreements to: (i) open markets by eliminating or reducing barriers to and distortions of trade and creating market opportunities, in particular for small businesses; (ii) further strengthen international trading disciplines; (iii) foster economic growth in the United States and globally; and (iv) promote
1 More details on the role of advisory committees are available online at: www.ustr.gov.
2 USTR (2005a).
3 Executive Office of the President (2005b).

United States WT/TPR/S/160
Page 15 environmental and worker rights policies in the context of trade. The Act also provides guidance on specific objectives and identifies congressional priorities.
(iii) Legislative developments
13.
The Trade Act of 2002 (PL 107-210) contains the Bipartisan Trade Promotion Authority Act of 2002 (TPA), which granted trade promotion authority to the Executive. Under the TPA, when considering legislation approving and implementing a new trade agreement, Congress can approve or reject the legislation, but must do so without amendment and within a fixed period. Under the Trade
Act of 2002, the TPA could be extended until 1 July 2007 if the President requested an extension and
Congress did not disapprove. On 1 April 2005, the Administration requested such an extension, which is effective until 1 July 2007. Although any agreement undertaken under TPA must be signed before 1 July 2007, there is a requirement to indicate to Congress the intention of signing a trade agreement 90 days before this deadline (i.e. no later than 1 April 2007), and to identify and report to
Congress the range of proposals advanced in the negotiations that may be in the final agreement and could require changes in trade legislation 180 days before signature (i.e. no later than 31 December
2006). TPA authority extends to cover the passage of the required implementing legislation for such agreements.
14.
Section 125 of the Uruguay Round Agreements Act mandates that, beginning 1 March 2000, and every five years thereafter, the report on WTO activities transmitted by the President to Congress, must include an analysis of the value of continued U.S. participation in the WTO.
4 Following the submission of the report, Congress can withdraw its approval of the WTO Agreement. On
1 March 2005, Congress received the second five-year report. On 2 March 2005, House Joint
Resolution 27 to withdraw the approval of the Congress from the Agreement establishing the WTO was introduced and referred to the Committee on Ways and Means. The Administration strongly opposed H.J. Resolution 27.
5 On 9 June 2005, the House of Representatives voted by 338 to 86 to support continued U.S. participation in the WTO, defeating H.J. Resolution 27.
6
(3) P ARTICIPATION I N T HE WTO
15.
The United States continues to be one of the key participants in all areas of WTO activity, including the current Doha Development Agenda trade negotiations. The United States was an original signatory to the GATT and is an original Member of the World Trade Organization. The
WTO Agreement was implemented in U.S. domestic law through the Uruguay Round Agreements
Act. In the context of this Review, the authorities reaffirmed their strong support of the multilateral trading system, which they consider to be at the core of U.S. international trade relations. They see the role of the United States in this system as important to ensuring growth and contributing to a more stable and secure world.
16.
In the view of the U.S. authorities, the record of U.S. participation in the WTO clearly demonstrates that continued engagement in the global trading system is vital, and that through the
WTO, trade barriers have been lowered, helping to drive a 63% increase in U.S. exports of goods and services between 1994 and 2004.
7 The United States also considers that its efforts in the WTO have helped to extend a system of trade rules globally that protect innovation, provide for certainty and
4 Section 124 of the URAA requires the USTR to submit to Congress, by 1 March of each year a report on a wide range of WTO activities, and administrative aspects of WTO operations during the preceding year.
5 U.S. Government (2005a).
6 House Republican Conference online information. Available at: http://www.gop.gov/
Committeecentral/bills/hjres27.asp.
7 USTR (2005a).

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Trade Policy Review predictability, and form the vital legal infrastructure for enforcement. The United States is also of the view that the ongoing DDA negotiations can provide even greater economic benefits.
17.
In the context of the discussion in the House Ways and Means Committee on continued U.S. participation in the WTO, it was noted that a successful conclusion of the DDA would bring benefits equivalent to an US$18 billion tax cut for U.S. consumers and manufacturers while expanding the
U.S. economy by US$95 billion. However, the Committee also noted that there were some aspects of the multilateral trading system that needed rectification: (i) the increasing use of non-tariff trade barriers in various forms such as discriminatory internal taxes, standards or SPS measures; (ii) the consensus-based structure of the WTO, which gave some Members the ability to dilute trade liberalizing efforts; and (iii) the "gap filling" by panels that read more exacting, and sometimes impractical, requirements into the WTO agreements, particularly with respect to trade remedy laws.
8
18.
The United States has made numerous contributions in the various WTO bodies during the period under Review, in particular in the context of the ongoing DDA negotiations. The contributions or proposals by the United States cover a wide range of trade topics discussed in the WTO, including agriculture, market access for industrial goods and services, anti-dumping, subsidies, and intellectual property. The United States has also made several proposals regarding the WTO dispute settlement mechanism; these have dealt mainly with the transparency and flexibility of DSB procedures.
9
19.
The United States has also continued to be an active participant in the WTO dispute settlement mechanism. Since the inception of the WTO, the United States has been complainant in 80 disputes and respondent in 89. From mid 2003 to mid 2005, the United States was a complainant in six dispute settlement cases, requesting the establishment of a panel in four (Table AII.1). The
United States was respondent in ten cases during the same period. Contingency measures affecting steel products were the subject of most complaints (see also Chapter III(2)(v)).
20.
The United States has made progress in implementing WTO DSB decisions during the period under review. It has repealed the anti-dumping provisions of the Revenue Act of 1916, more commonly known as the Antidumping Act of 1916, and the extraterritorial income provisions of the
FSC/ETI case. However, a few rulings have not yet been implemented, including those relating to the
Byrd Amendment and the Section 211 of the U.S. Omnibus Appropriations Act of 1998 case. The authorities note that the Administration remains committed to implementing these decisions.
21.
The United States has met most of its notification obligations over the review period.
However, a few notifications were outstanding as at October 2005, particularly on domestic support to agriculture, state trading activities, and statistics for government procurement (Table AII.2). The authorities noted that the United States would submit the relevant procurement reports when the replacement of its procurement data collection system was completed.
10
(4) P REFERENTIAL AND O THER A RRANGEMENTS
(i) Introduction
22.
The United States has free-trade agreements in force with Canada, Mexico, Israel, Jordan,
Chile, Singapore, and Australia; the latter three have entered into force since the previous U.S.
8 109th Congress 1st Session. House of Representatives. Report 109-100, Withdrawing the Approval of the United States from the Agreement Establishing the World Trade Organization , 26 May 2005.
9 WTO documents TN/DS/W/13, 22 August 2002, TN/DS/W/28, 23 December 2002, TN/DS/W/52,
14 March 2003, and WTO document TN/DS/W/79, 13 July 2005.
10 The new system, the Federal Procurement Data System, will be accessible at: http://www.fpds.gov.

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Review. FTAs have been completed but are not yet in force with Bahrain; the five members of the
Central American Common Market (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and the Dominican Republic; Morocco; and Oman (as at October 2005). The United States is also conducting negotiations to create FTAs with: the members of the Southern African Customs Union;
Panama; Colombia, Ecuador, and Peru; Thailand; the United Arab Emirates; and Qatar. Unilateral preferences in favour of developing countries have also been expanded since 2003, notably through the new AGOA provisions.
23.
The U.S. authorities hold the view that U.S. FTAs can promote innovation, provide participating countries with trade capacity building to develop negotiating skills, and promote investment, job creation, and higher business standards. They also consider them as a means to advance work and negotiations of multilateral agreements. On the other hand, concerns exist in relation to the capacity of potential partners to participate in multiple agreements and to the impact that these FTAs may have on third countries, for example through possible trade diversion.
11
24.
While each of the FTAs concluded by the United States so far has specific characteristics, some elements are common in all or most of them.
12 They have all sought to eliminate from the start duties on as many products as possible while providing adjustment periods and safeguards for
"sensitive" products. They also provide for the elimination of agricultural export subsidies on bilateral trade, unless the export country believes that its partner's market is being supplied by subsidized exports from a third country. They contain provisions on rules of origin, customs procedures, cooperation on SPS matters, government procurement, and safeguard procedures
(including special textile/apparel safeguards). In all of them, elimination of barriers to the supply of services is sought through a "negative list" approach.
13 Most agreements include provisions on foreign investment, also on a "negative list" basis. Finally, all U.S. FTAs contain provisions to increase regulatory transparency, to address bribery and corruption, to settle disputes, to enforce panel decisions, and on labour and environmental matters.
25.
All recent U.S. FTAs but one have involved developing countries. By virtue of their legally binding nature, FTAs have enhanced the predictability of the already largely open U.S. trade regime, including unilateral preferences for developing countries. In turn, U.S. trading partners have been required to liberalize and modernize their trade policies and practices. In some cases, U.S. partners have brought their legal systems into conformity with WTO rules as part of the negotiating process.
By their nature, U.S. FTAs have also resulted in U.S. partners accepting commitments that go beyond multilateral requirements. For example, in the area of services, national treatment and market access provided under FTAs are generally much more liberal than GATS commitments, and in intellectual property rights protection, FTAs go beyond the commitments of the TRIPS Agreement, notably with respect to patents and copyright.
(ii) Free-trade agreements
(a) Agreements in force before 2004
26.
NAFTA provisions covering trade in goods were notified to the GATT in 1993; those covering trade in services were notified to the WTO in 1995.
14 Canada and Mexico remain the
United States' two main single-country trading partners for trade in goods (see also Chapter I(6)(i)).
11 U.S. International Trade Commission (2003).
12 The information contained in this paragraph is based on Executive Office of the President (2005b).
13 Under a negative list approach trade is considered free of restrictions unless included in countries' lists of reservations. This approach differs from the GATS architecture, which takes a positive list approach.
14 WTO documents L/7176, 1 February 1993 and S/C/N/4, 1 March 1995.

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Trade Policy Review
U.S. tariffs on Canadian imports have been eliminated on virtually all trade, except for certain out-ofquota tariff rates, while tariff elimination with Mexico, also very significant, continues through staged phase-outs for the few remaining products (Chapter III(2)(ii)).
27.
The U.S.-Israel FTA in industrial products was notified to the WTO in 1985 under GATT
Article XXIV.
15 This agreement was complemented in 1996 by an Agreement on Trade in
Agricultural Products (ATAP), which expired at the end of 2001, but whose benefits were extended until the end of 2003 to allow the parties time to negotiate a new agreement. A new ATAP, approved in July 2004, applies retroactively from 1 January 2004 until 31 December 2008. The parties agreed to start negotiating a new agreement no later than 1 June 2007. Under the ATAP, most Israeli agricultural products have duty-free access to the U.S. market; other products of Israel are subject to duty-free tariff rate quotas.
16
28.
The U.S.-Jordan Free Trade Agreement entered into force in December 2001.
17 The
Agreement was notified to the WTO under GATT Article XXIV and GATS Article V.
18 The agreement provides for duty-free imports into the United States for most goods within four stages of implementation, and contains provisions on trade and environment, trade and labour, electronic commerce, and services. The FTA contains no provisions on investment as the United States and
Jordan already have a bilateral investment treaty. The liberalization of services under the agreement follows a positive-list approach. No significant changes with respect to this agreement have taken place during the period under review.
(b) Agreements in force since 2004
29.
The U.S.-Singapore FTA, the first between the United States and a South-east Asian country, entered into effect in January 2004. It provides for duty-free access for most goods upon entry into force of the agreement, and the remaining tariffs to be phased out over a four to ten year period.
19 The
FTA includes provisions on trade and environment, trade and labour issues, electronic commerce and services, intellectual property rights, rules of origin, and investment. All core provisions can be enforced through the agreement's dispute settlement provisions. The FTA contains commitments on the transfer of capital and the avoidance of capital controls; any restrictions that "substantially impede transfers" may be subject to damages claims. The agreement was notified to the WTO under
GATT Article XXIV and GATS Article V in 2003.
20
30.
The U.S.-Chile FTA came into effect in January 2004. The agreement provides for immediate duty-free access for more than 90% of two-way trade in goods.
21 Most remaining tariffs and quotas are to be eliminated in four years and all tariffs and quotas in up to 12 years. The FTA includes provisions on trade and environment, trade and labour issues, electronic commerce and services, intellectual property rights, rules of origin, investment, and government procurement. All core provisions can be enforced through the agreement's dispute settlement provisions; the FTA
15 WTO document L/5862, 13 September 1985.
16 For further information see USTR online information. Available at: http://www.ustr.gov/assets/
Trade_Agreements/Bilateral/Israel/asset_upload_file899_7902.pdf.
17 USTR online information. Available at: http://www.ustr.gov/regions/eu-med/middleeast/US-
JordanFTA.shtml.
18 WTO documents WT/REG/134/1, 5 March 2002 (goods), and S/C/N/193, 8 October 2002 (services).
19 USTR online information. Available at: http://www.ustr.gov/new/fta/Singapore/consolidated_texts
.htm.
20 WTO document WT/REG161/N/1, S/C/N/263, 19 December 2003.
21 USTR online information. Available at: http://www.ustr.gov/new/fta/chile.htm.

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Page 19 includes provisions for monetary assessments to back up dispute panel decisions. The agreement was notified to the WTO under GATT Article XXIV and GATS Article V in 2003.
22
31.
The U.S.-Australia FTA, was notified to the WTO in 2004.
23 The FTA entered into effect on
1 January 2005. Australia is the United States' 14th largest goods market. The FTA includes provisions on trade and environment, trade and labour issues, electronic commerce and services, intellectual property rights, rules of origin, investment, and government procurement. Under the agreement, most tariffs on manufactured goods were eliminated on two-way trade the day the FTA took effect; this was the single largest immediate tariff elimination for industrial goods provided under any U.S. FTA.
24 The U.S.-Australia FTA is the first U.S. FTA to include non-market-access provisions relating to public health and pharmaceuticals, including requirements for Australia's health programmes to apply transparent procedures in listing new pharmaceuticals for reimbursement. The
FTA calls for the parties to work together in several areas of the WTO agriculture negotiations.
(c) Agreements not yet in force (December 2005)
32.
In June 2004, the United States signed an FTA with Morocco. The United States-Morocco
FTA was the first agreement signed under the Middle East FTA initiative (MEFTA), aimed at creating a U.S.-Middle East free-trade area by 2013.
25 The U.S. Congress approved the Morocco
FTA in August 2004 and the President signed the implementing legislation shortly thereafter. The
Moroccan Parliament ratified the agreement in January 2005, and it entered into force on 1 January
2006. The FTA provides for more than 95% of bilateral trade in consumer and industrial goods to become duty-free on the day the agreement enters into force. The FTA also contains provisions with respect to agricultural liberalization, services, transparency and anti-corruption, labour rights, and environmental cooperation.
33.
On 14 September 2004, the United States signed an FTA with Bahrain, and the U.S. Congress approved the agreement in December 2005. Two-way trade was nearly US$900 million in 2003. On the day the agreement enters into effect, two-way trade on 100% of consumer and industrial products and most agricultural exports is to be duty free. The elimination of the remaining tariffs will be completed over ten years; the United States will apply preferential tariff-rate quotas on certain sensitive agricultural products. The FTA includes provisions on trade and environment, trade and labour issues, electronic commerce and services, intellectual property rights, rules of origin, investment, and government procurement.
34.
The United States began FTA negotiations with the United Arab Emirates and with Oman in
November 2004. The negotiations with Oman were completed in October 2005.
26 Coverage is similar to that of the agreement with Bahrain: 100% of bilateral trade in industrial and consumer products will become duty free immediately upon its entry into force.
27
22 WTO document WT/REG160/N/1, S/C/N/262, 19 December 2003.
23 WTO document WT/REG184/N/1, S/C/N/310, 23 December 2004.
24 USTR online information. Available at: http://www.ustr.gov/new/fta/australia.htm.
25 The MEFTA initiative is designed to deepen U.S. trade relationships with all countries of the region.
Apart from the FTAs concluded with Morocco and Bahrain, under the MEFTA the United States has signed trade and investment framework agreements (TIFAs) with Saudi Arabia, the United Arab Emirates, Kuwait,
Qatar, Yemen, and Oman. The United States already had TIFAs with Egypt, Algeria, and Tunisia.
26 http://www.ustr.gov/Document_Library/Press_Releases/ 2005/October/_Oman_Conclude_Free_Trade_
Agreement.html.
27 http://www.ustr.gov/assets/Document_Library/Fact_ Sheets/2005/asset_upload_file189_8115.pdf.

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35.
The U.S. Free Trade Agreement with Central America and the Dominican Republic (CAFTA-
DR), including Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, and the Dominican
Republic was signed on 5 August 2004. The U.S. Congress approved the CAFTA-DR in June
(Senate) and July (House of Representatives) 2005. As of November 2005, all of these trading partners except Costa Rica had ratified the agreement. Under the CAFTA-DR, most tariffs on consumer and industrial goods will be set to zero from the outset; this consolidates the access to the
U.S. market for most CAFTA-DR products since most already enjoy duty-free market access to the
United States. The elimination of the remaining tariffs, mostly agricultural goods, will be phased out over ten years. The FTA includes provisions on intellectual property rights, rules of origin, investment, trade and environment, trade and labour issues, electronic commerce, and government procurement. It also includes liberalization in agriculture; and textiles and apparel that meet the
FTA's regional origin rules will become duty-free as soon as the agreement takes effect. The FTA provides comprehensive market access in a number of service areas, including telecommunications, express delivery services, computer and related services, financial services, and insurance. The agreement also disciplines the use of dealer protection regimes in the CAFTA-DR countries. The agreement is the first FTA to establish a Trade Capacity Building Committee (TCB) to identify priorities and coordinate trade capacity building efforts in the region and to include a public submissions process on environmental enforcement.
36.
As at November 2005, the United States was also holding formal FTA negotiations with the five members of the SACU, Thailand, the United Arab Emirates, Panama, and with three Andean countries (Colombia, Ecuador, and Peru), with Bolivia participating as an observer. At the same time, the Administration is continuing to press for a market-opening Free Trade Area of the Americas, but, as at late 2005, the negotiations were stalled.
(iii) Unilateral preferences and other trade arrangements
37.
Under its Generalized System of Preferences (GSP) programme, the United States grants unilateral preferences to GSP-eligible exports from beneficiary developing countries. The granting of preferences may be subject to compliance with various U.S. policy objectives. The GSP, which expired in September 2001 and was renewed retroactively by Congress in August 2002, is authorized through 31 December 2006.
28
28 As of November 2005, GSP beneficiaries that are independent countries were: Afghanistan,
Albania, Algeria, Angola, Antigua and Barbuda, Argentina, Armenia, Bahrain, Bangladesh, Barbados, Belize,
Benin, Bhutan, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, Bulgaria, Burkina Faso, Burundi,
Cambodia, Cameroon, Cape Verde, Central African Republic, Chad, Colombia, Comoros, Congo (Republic of),
Congo (Democratic Republic of), Costa Rica, Cote d’Ivoire, Croatia, Djibouti, Dominica, Dominican Republic,
Ecuador, Egypt, El Salvador, Equatorial Guinea, Eritrea, Ethiopia, Fiji, Gabon, Gambia, Georgia, Ghana,
Grenada, Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, India, Indonesia, Iraq, Jamaica, Jordan,
Kazakhstan, Kenya, Kiribati, Kyrgyzstan, Lebanon, Lesotho, Former Yugoslav Republic of Macedonia,
Madagascar, Malawi, Mali, Mauritania, Mauritius, Moldova, Mongolia, Morocco, Mozambique, Namibia,
Nepal, Niger, Nigeria, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, the Philippines, Romania,
Russia, Rwanda, St. Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, Sao Tome and
Principe, Senegal, Serbia-Montenegro, Seychelles, Sierra Leone, Solomon Islands, Somalia, South Africa,
Sri Lanka, Suriname, Swaziland, Tanzania, Thailand, Togo, Tonga, Trinidad and Tobago, Tunisia, Turkey,
Tuvalu, Uganda, Uruguay, Uzbekistan, Vanuatu, Venezuela, Yemen, Zambia, and Zimbabwe. GSP-eligibility is also extended to: Anguilla, British Indian Ocean Territory, Christmas Island (Australia), Cocos (Keeling)
Islands, Cook Islands, Falkland Islands (Islas Malvinas), Gibraltar, Heard Island and McDonald Islands,
Montserrat, Niue, Norfolk Island, Pitcairn Islands, Saint Helena, Tokelau, Turks and Caicos Islands,
British Virgin Islands, Wallis and Futuna, West Bank and Gaza Strip, and the Western Sahara.

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38.
The Caribbean Basin Economic Recovery Act (CBERA), enhanced by the Caribbean Basin
Trade Partnership Act (CBTPA), which was implemented in October 2000, and further improved by the Trade Act of 2002, provides duty-free access for most goods from CBI beneficiary countries.
29
While the CBERA is permanent, CBTPA benefits are available until September 2008.
39.
The provisions of AGOA, enacted in May 2000 and authorized until September 2008, were amended in the 2002 Trade Act, to change rules on textiles. In July 2004, the President signed into law the AGOA Acceleration Act of 2004, extending AGOA's authorization until 2015, including its special third-country fabric provision until September 2007. The Act also mandated increased technical assistance, and amended some technical provisions. Under AGOA, the President determines annually which sub-Saharan African countries are eligible for benefits. In 2005, 37 countries met the
Act's requirements.
30 Twenty-four sub-Saharan African countries are eligible for AGOA's apparel provisions and, as of November 2005, 13 of these countries also qualified for the provisions for handloomed and handmade articles.
31
40.
The Andean Trade Promotion and Drug Eradication Act (ATPDEA), part of the Trade Act of
2002, renewed and extended the ATPA until December 2006, increased the number of eligible dutyfree products, and expanded benefits in the apparel sector. Bolivia, Colombia, Ecuador, and Peru have been designated full beneficiaries of the ATPA.
41.
The United States was granted a waiver for CBERA by the General Council, pursuant to
Article IX:4 of the WTO Agreement, until 31 December 2005.
32 The waiver granted to the
United States for the implementation of ATPA expired on 4 December 2001. Thus, as of
October 2005, ATPA, ATPDEA, and AGOA preferences were not covered by WTO waivers. In
February 2005, the United States asked to widen the scope of the existing waiver for CBERA, as amended by the CBTPA, and to extend the waiver through 30 September 2008.
33 Also in February
2005, the United States requested waivers for the AGOA preferences, and for the ATPA, as amended by ATPDEA, through 30 September 2015 and 31 December 2006, respectively.
34 Comments and questions on the waiver request have been raised by: China, India, and Pakistan; and Brazil.
35 The granting of the waivers was discussed in the Council on Trade in Goods on 15 July 2005.
36 No decision with respect to these waivers has been made (October 2005).
42.
The United States has continued its participation in other multilateral fora, such as the Asia
Pacific Economic Cooperation (APEC).
37 Progress towards liberalization is "measured" on the basis
29 Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Costa Rica, Dominica,
Dominican Republic, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Montserrat,
Netherlands Antilles, Nicaragua, Panama, St. Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines,
Trinidad and Tobago, and British Virgin Islands receive benefits under CBERA. Barbados, Belize, Costa Rica,
Dominican Republic, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Panama,
Saint Lucia, and Trinidad and Tobago also receive benefits under CBTPA.
30 Benin, Burkina Faso, Botswana, Cameroon, Cape Verde, Central African Republic, Chad, Republic of Congo, Democratic Republic of Congo, Djibouti, Ethiopia, Gabon, The Gambia, Ghana, Guinea, Guinea-
Bissau, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger,
Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, South Africa, Swaziland,
Tanzania, Uganda, and Zambia.
31 USTR (2005).
32 WTO document WT/L/104, 24 November 1995.
33 WTO document G/C/W/508, 1 March 2005.
34 WTO documents G/C/W/509 and G/C/W/510, 1 March 2005.
35 WTO documents G/C/W/516, 13 April 2005, and G/C/W/527, 20 July 2005.
36 WTO document G/C/M/81, 1 August 2005.
37 APEC online information. Available at http://www.apecsec.org.

WT/TPR/S/160
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Trade Policy Review of Individual Action Plans, prepared annually by each APEC member and submitted for periodic peer review.
38
(5) F OREIGN I NVESTMENT R EGIME
43.
The United States maintains a liberal foreign investment regime, providing nondiscriminatory treatment with a few sectoral exceptions. Restrictions on FDI relate to only some specific areas: atomic energy operations; rights of way for oil pipelines, or for mining coal, oil or certain other minerals; and certain fishing operations. Most other federal-level sectoral measures that limit FDI, or subject it to reciprocity, relate to services, notably air and maritime transport services, and financial services (see Chapter IV). Restrictions to national treatment may apply with respect to the eligibility for public funding for R&D; emergency loans for agricultural purposes; and loans, guarantees, and political-risk insurance for investment.
39 Restrictive measures are also applied at the
State level, in particular on real estate and financial services.
44.
FDI into the United States is subject to reporting requirements under the International
Investment and Trade in Services Survey Act. There are also specific requirements regarding the reporting of foreign acquisitions of agricultural land, contained in the Agricultural Foreign Investment
Disclosure Act. Although FDI is generally not subject to review, under Section 721 of the Defense
Production Act of 1950, commonly known as the Exon-Florio amendment, the President may take action on national security grounds with respect to any foreign acquisition, merger or takeover of a corporation engaged in commerce in the United States, including suspending or prohibiting a proposed transaction or requiring divestment of a completed transaction. Exon-Florio does not define
"national security" but sets out certain factors that the President may consider in determining the effects on national security of a foreign acquisition.
45.
The Committee on Foreign Investment in the United States (CFIUS) determines if a formal investigation under Exon-Florio is warranted. Once the CFIUS has submitted a report to the
President, he has 15 days to make his determination. In practice, the CFIUS initiates investigations only in a limited number of cases: during 2004, the CFIUS initiated investigations of two acquisitions out of a total of 50 notified to it over the year.
40 No action was taken as a result of these investigations.
46.
The United States has bilateral investment treaties in force with 39 other countries.
41 Among the main characteristics of U.S. bilateral investment treaties are: a broad coverage; national and
MFN treatment both pre- and post-establishment, subject to agreed sectoral exceptions; the observance of certain standards of treatment and protection with regard to covered investments; rules concerning expropriation and compensation; free transfer of funds; prohibition of certain mandatory performance requirements; settling of disputes through international arbitration. The NAFTA and the
38 The 2004 IAP for the United States is available at: http://www.apec-iap.org./document/
US_2004_IAP.htm.
39 See WTO (2004), Chapter II(5) for further details.
40 GAO (2005a).
41 With Albania (1998), Argentina (1994), Armenia (1996), Azerbaijan (200), Bahrain (2001),
Bangladesh (1989), Bolivia (2001), Bulgaria (1994), Cameroon (1989) Congo, Democratic Republic (1989),
Congo, Republic (1994), Croatia (2001), Czech Republic (1992), Ecuador (1997), Egypt (1992), Estonia (1997),
Georgia (1997), Grenada (1989), Honduras (2001), Jordan (2003), Jamaica (1997), Kazakhstan (1994),
Kyrgyzstan (1994), Latvia (1996), Lithuania (2001), Moldova (1994), Mongolia (1997), Morocco (1991),
Mozambique (1998), Panama (1991), Poland (1994), Romania (1994), Senegal (1990), Slovakia (1992), Sri
Lanka (1993), Trinidad and Tobago (1996), Tunisia (1993), Turkey (1990), and Ukraine (1996). Agreements with Belarus, El Salvador, Haiti, Russia, Uruguay, and Uzbekistan have been signed but are not yet in force.

United States WT/TPR/S/160
Page 23 recently signed FTAs between the United States and Australia, CAFTA-DR, Chile, Morocco, Oman, and Singapore contain separate chapters on foreign investment, which generally go beyond the provisions of the United States' bilateral investment treaties. The United States is also a party to the
OECD Code of Liberalization of Capital Movements, and the OECD National Treatment Instrument, which is not legally binding.
47.
The United States has concluded 36 trade and investment framework agreements, which establish an institutional framework for consultation on ways to promote bilateral trade and investment.
42 Typically they provide that the parties undertake to adopt measures to encourage and facilitate trade in goods and services, and to secure favourable conditions for long-term investment, development, and diversification of trade among their respective nationals and companies. In addition, they provide for consideration of further agreements regarding trade, taxation, intellectual property, labour, transfer of technology, technical cooperation, and investment issues. Under the
Middle East Free Trade Initiative, the United States offered to negotiate new trade and investment framework agreements with countries in the region and to deepen those already in place.
42 With Afghanistan (2004), Algeria (2001), Bahrain (2002), Brunei Darussalam (2002), Chinese
Taipei (1994), Common Market for Eastern and Southern Africa (2001), Egypt (1999), Ghana (1999), Indonesia
(2005), Iraq (2005), Kazakhstan (2004), Kyrgyzstan (2004), Kuwait (2004), Malaysia (2004), Mongolia (2004),
Morocco (1995), Mozambique (2005), New Zealand (1992), Nigeria (2000), Oman (2004), Pakistan (2003), the
Philippines (2005), Qatar (2004), Singapore (1991), South Africa (1999), Sri Lanka (2002), Tajikistan (2004),
Thailand (2002), Tunisia (2002), Turkey (1999), Turkmenistan (2004), United Arab Emirates (2004), Uruguay
(2004), Uzbekistan (2004), West African Economic and Monetary Union (2002), and Yemen (2004).