Trade Compliance

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USTR Argues for “Leveling the Playing Field” with Trans-Pacific Partnership

Posted June 03, 2015


A new report released yesterday by the U.S. Trade Representative (USTR) purports to show that American workers and businesses face disproportionately high tariff barriers in the Asia-Pacific, which it says the Obama Administration is fighting to lower through the Trans-Pacific Partnership (TPP) trade deal.  

“We already have an open economy, but not all countries do. TPP will help level the playing field so that our products and services aren’t frozen out of the fastest growing markets in the world,” said USTR Michael Froman.

The report notes that the United States has an average applied tariff of 1.4% and that nearly 70% of the products the U.S. imports do not face any tariffs at all. “However, when our exporters work to sell Made-in-America goods to other countries, they’re burdened with tariffs over twice as high on average,” a statement issued by the USTR says. “American manufactured goods face tariffs of up to 100% on certain goods in TPP markets, and American agriculture exports face tariffs over 700% on some products.”

Some of the tariffs of various commodities that U.S. trade negotiators are seeking to “level” in a number of different sectors are detailed in the report including automotive products, chemical, fish and fish products, building products, machinery products, consumer goods, footwear, and many more. High-tech and precision machinery products and scientific and technical instruments, to cite one category, accounted for $124.4 billion in U.S. exports to the world in 2014, and $54 billion of that was to TPP countries. Currently, tariffs on machinery products in these TPP markets range up to 70%, the report notes.

“The public debate has focused on the adequacy of TPP’s environmental and labor safeguards, its potential to feather the nests of well-connected pharmaceutical, software and finance interests, and the secrecy of its negotiations,” Froman told Politico last week who reported that the USTR was frustrated that the heart of the deal to phase out tariffs and other export barriers for more than 11,000 categories of commodities, thereby gaining significant access to new markets for U.S. exporters, isn’t getting more attention.

Froman provided numerous examples of disparities to illustrate his argument that the current trade situation with TPP countries creates an unfair playing field for U.S. exporters. “Cars made in America face a 30 percent tariff in Malaysia, which might not seem stiff compared to 50 percent on motorcycles or 35 percent on plywood, except that cars made in Japan and other Asian nations don’t face any tariff in Malaysia,” for example.