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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Congressional Research Service (CRS)

 

Trade Law: An Introduction to Selected International Agreements and U.S. Laws

Emily C. Barbour, Legislative Attorney

June 29, 2010

http://opencrs.com/document/R41306/2010-06-29/download/1013/

[full-text, 63 pages]

 

Summary

U.S. trade obligations derive from international trade agreements, including the General

Agreement on Tariffs and Trade (GATT), the other World Trade Organization (WTO) agreements,

and additional bilateral and regional trade agreements, as well as domestic laws intended to

implement those agreements or effectuate U.S. trade policy goals. This report provides an

overview of both sources of U.S. trade obligations, focusing on a select group of agreements,

provisions, and statutes that are most commonly implicated by U.S. trade interests and policy.

Historically, parties to international trade agreements were obligated to reduce two kinds of trade

barriers: tariffs and non-tariff trade barriers. Whereas the former may hinder an imported

product’s ability to compete in a foreign market by imposing an additional cost on the product’s

entry into the market, the latter has the potential to bar an import from entering that market

altogether by, for example, restricting the number of such imports that can enter the market or

imposing prohibitively strict packaging and labeling requirements. Consequently, at their most

basic, international trade agreements obligate their parties to convert at least some of their nontariff

trade barriers into tariffs, set a ceiling on the tariff rates for particular products, and then

progressively reduce those rates over time. In addition, international trade agreements have

increasingly broadened their scope to target domestic policies that appear to operate as unfair

trade practices and to establish elaborate trade dispute settlement mechanisms. As illustrated in

this report, the typical international trade agreement today disciplines its parties’ use of tariffs and

trade barriers, authorizes its parties to use discriminatory trade measures to remedy certain unfair

trade practices, and establishes a dispute settlement body.

 

Domestic trade laws, meanwhile, can broadly be classified as laws (1) authorizing trade remedies,

including remedies for violations of trade agreements, countervailing duties for subsidized

imports, and antidumping duties for imports sold at less than their normal value, (2) setting

domestic tariff rates and providing special duty-free or preferential tariff treatment for certain

products, and (3) authorizing the imposition of trade sanctions to protect U.S. security or achieve

other policy goals. In addition to describing these domestic laws, this report summarizes the

constitutional authorities of Congress and the executive branch over international trade. Finally,

the report identifies many of the federal agencies and entities charged with overseeing the

development of new trade agreements and the administration and enforcement of federal trade

laws. Among the federal agencies and entities discussed are the United States Trade

Representative (USTR), the International Trade Administration (ITA), the International Trade

Commission (ITC), the United States Customs and Border Protection (CBP), and the United

States Court of International Trade (CIT).

 

This report is not intended as a comprehensive review of trade law. It is an introductory overview

of the legal framework governing trade-related measures. The agreements and laws selected for

discussion are those most commonly implicated by U.S. trade interests, but there are U.S. trade

obligations beyond those reviewed in this report.

 

Contents

Introduction ...............................................................................................................................1

Part I: United States Trade Obligations Under International Law.................................................1

The Uruguay Round, Marrakesh Agreement, and World Trade Organization..........................2

The General Agreement on Tariffs and Trade (GATT) 1994.............................................3

The Nondiscrimination Provisions of the GATT........................................................3

Article II: Tariffs .......................................................................................................6

Article VIII: Fees and Formalities .............................................................................7

Article IX: Marks of Origin.......................................................................................8

Article XI: General Elimination of Quantitative Restrictions .....................................9

Article XX: General Exceptions to the GATT and “the Chapeau” ............................10

Article XXI: National Security Exceptions to the GATT.......................................... 11

Article XXIII: The Basis for WTO Dispute Settlement ............................................12

Article XXIV: Customs Unions and Free Trade Areas .............................................13

Other WTO Agreements Reached During the Uruguay Round.......................................14

Antidumping Agreement .........................................................................................14

Agreement on Subsidies and Countervailing Measures............................................16

Agreement on Safeguards .......................................................................................18

Agreement on Rules of Origin.................................................................................20

Agreement on Agriculture .......................................................................................21

Agreement on Technical Barriers to Trade...............................................................23

Agreement on Sanitary and Phytosanitary Measures................................................24

General Agreement on Trade in Services .................................................................25

Agreement on Trade-Related Intellectual Property Rights........................................27

Dispute Settlement Understanding.................................................................................29

The WTO Plurilateral Agreements.................................................................................30

Agreement on Government Procurement .................................................................30

Agreement on Trade in Civil Aircraft ......................................................................32

The Doha Development Round .....................................................................................33

Free Trade Agreements in Effect and Pending Congressional Approval ...............................33

North American Free Trade Agreement .........................................................................35

Dominican Republic-Central America-United States Free Trade Agreement ..................37

Pending Free Trade Agreements with South Korea, Panama, and Colombia...................39

Trade Negotiations for the Trans-Pacific Partnership Agreement....................................42

Part II: The U.S. Constitution and Separation of Powers ............................................................42

Article I of the Constitution and Legislative Branch Authority.............................................43

Article II of the Constitution and Executive Branch Authority .............................................43

Separation of Powers in Practice: Fast Track and Trade Remedies .......................................43

Fast Track Authority: Trade Act of 1934, Trade Act of 1974, and Bipartisan Trade

Promotion Act of 2002 ...............................................................................................43

Import Competition: Tariff Act of 1930 and Trade Act of 1974 ......................................45

Part III: Selected U.S. Agencies and Federal Entities with Responsibility for Aspects of

International Trade.................................................................................................................46

United States Trade Representative .....................................................................................46

United States International Trade Administration.................................................................46

United States International Trade Commission ....................................................................47

United States Customs and Border Protection......................................................................47

United States Court of International Trade...........................................................................47

Part IV: Selected Federal Statutes Regulating International Trade ..............................................48

Trade Remedy Laws ...........................................................................................................48

Section 301 of the Trade Act of 1974: Remedies for Violations of Trade

Agreements and Other Inconsistent or Unjustifiable Foreign Trade Practices ..............48

Countervailing Duties: Remedies for Imports of Subsidized Goods ...............................49

Antidumping Duties and “Zeroing”: Remedies for Imports Sold at Less Than Fair

Value .........................................................................................................................51

Safeguards ....................................................................................................................53

Domestic Tariff and Customs Law.......................................................................................54

Harmonized Tariff Schedule..........................................................................................54

Generalized System of Preferences................................................................................55

Other Duty Free Entry Programs ...................................................................................56

Laws Authorizing the Imposition of Trade Sanctions ...........................................................57

Trading with the Enemy Act..........................................................................................57

International Emergency Economic Powers Act ............................................................58

 

Contacts

Author Contact Information ......................................................................................................59

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This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.

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Stuart Basefsky                   
Director, IWS News Bureau                
Institute for Workplace Studies 
Cornell/ILR School                        
16 E. 34th Street, 4th Floor             
New York, NY 10016                        
                                   
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