I. Overview of Bilateral Trade and Investment
The United States was China's second largest trading partner in 2004. According to China Customs statistics, the total bilateral trade between China and the United States in 2004 amounted to 169.63 billion U.S. dollars, up 34.3% year-on-year. Among them, China exported 124.95 billion U.S. dollars to the U.S., up 35.1 percent year-on-year, and imported 44.68 billion U.S. dollars from the U.S., up 31.9 percent year-on-year. The Chinese side had a surplus of 80.27 billion U.S. dollars. China's main exports to the U.S. are electromechanical products, furniture and lamps, toys, shoes, iron and steel products, plastics and their products, vehicles and their spare parts, clothing, leather products and bags, other textile products, optical photographic equipment, etc., and imports from the U.S. are electromechanical, optical medical equipment, oilseed feed, aircraft, plastics and their products, organic chemicals, cotton, wood pulp, miscellaneous chemicals, steel, leather and so on.
According to the statistics of the Ministry of Commerce of China, in 2004, Chinese companies in the U.S. completed the turnover of contracted projects of 240 million U.S. dollars, and the newly signed contracts amounted to 380 million U.S. dollars; completed the amount of 120 million U.S. dollars of contracted labor cooperation, and the newly signed contracts amounted to 0.5 billion U.S. dollars. By the end of 2004, Chinese companies in the U.S. have completed a total turnover of 2.02 billion U.S. dollars in contracted projects and signed contracts amounting to 2.8 billion U.S. dollars; the amount of labor cooperation contracts was 1.9 billion U.S. dollars, and the amount of signed contracts was 1.88 billion U.S. dollars.
In 2004, approved or recorded by China's Ministry of Commerce, China set up 97 non-financial Chinese-funded enterprises in the U.S., with an agreed investment of 140 million U.S. dollars by the Chinese side. By the end of 2004, China had invested and established 883 non-financial Chinese enterprises in the U.S., with a total investment of US$1.09 billion from the Chinese side.
According to China's Ministry of Commerce, in 2004, the U.S. invested in 3,925 projects in China, with a contract value of 12.17 billion U.S. dollars and an actual use of 3.94 billion U.S. dollars. By the end of 2004, the U.S. accumulated 45,265 direct investment projects in China, with a contract value of 98.61 billion U.S. dollars, and actual investment of 48.03 billion U.S. dollars.
Overview of Trade and Investment Management System
(1) Legal System of Trade and Investment
1. Major Trade-Related Laws
The U.S. trade legal system covers tariffs and customs laws, import and export management laws, trade remedy laws, trade legislation based on security considerations, and domestic legislation for the implementation of many foreign trade agreements. As a common law country, the U.S. trade law system consists of both statutory law and effective court precedents that implement or supplement statutory law.
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These precedents are the result of a number of decisions made by Congress, including those made by the U.S. Trade Commission. The statutory laws passed by Congress are found in the Compilation of Laws, most of which are codified in 19 U.S.C., while the jurisprudence is contained in the various law reports.
The following laws form the backbone legislation of the U.S. trade law system. The Tariff Act of 1930, as amended, is the primary law governing the establishment and collection of tariffs and provides for antidumping and countervailing. The Trade Act of 1974, as amended, provides for non-tariff barriers, Generalized System of Preferences (GSP) treatment for developing countries, safeguard measures and 301 investigations. The Trade Agreements Act of 1979, as amended, ratified the outcome of the Tokyo Round negotiations and incorporated the outcomes on trade remedies, customs valuation, government procurement, and product standards into the U.S. trade law system. The Omnibus Trade and Competition Act of 1988 enhanced the executive branch's trade negotiating power and its authority to take measures against unfair trade, and comprehensively revised many of the trade laws that existed at the time, including anti-subsidy and anti-dumping laws, the Trade Agreements Act of 1979, and Section 301 of the Trade Act of 1974.
Additionally, trade-related laws include the Trade Act of 2002, the Uruguay Round Agreements Act and the Administrative Notes to the Uruguay Round Agreements Act (1994), the North American Free Trade Agreement Implementation Act (1993), the United States-Canada Free Trade Agreement Implementation Act, the Trade and Tariff Act of 1984. and the Trade Expansion Act of 1962, among others.
2. Major Investment-Related Laws
The U.S. legal system for the regulation of foreign investment includes the following three areas of legislation:
(1) Legislation on the Review of Investment Declarations
This part of the law includes the Census of International Investment and Trade in Services Act, the Foreign Agricultural Investment Disclosure Act, and the National Defense Production Act of 1950 (often called the "Exxon-Florio Amendment"). Exxon-Florio Amendments), among others.
(2) Legislation on National Treatment and Sectoral Restrictions
The United States has restrictions on foreign investment in energy, minerals, and fisheries. For example, the Atomic Energy Act of 1954, the Mineral Leasing Act of 1920, etc.
(3) Foreign Investment-Related Agreements
There are now 38 Bilateral Investment Treaties (BITs) signed and in force between the U.S. and other countries or regions. Meanwhile, investment management is also covered in many bilateral and regional trade agreements signed by the United States.
(II) Trade Management System
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1. Tariff System
(1) Average Tariff Levels and Their Changes
The U.S. grants most-favored-nation (MFN) tariff rate treatment to all WTO member parties except Cuba. The weighted average U.S. tariff level was 1.5 percent in 2003 and 1.6 percent in 2004. Certain products such as tobacco, peanuts and dairy products, sugar and some footwear are protected by tariffs as high as 50 to 350 percent.The average U.S. industrial tariff rate in 2004 was about 4 percent. In the new round of WTO negotiations currently underway, the U.S. is proposing to eliminate tariffs on all industrial goods by 2005 and to make substantial cuts in tariffs on agricultural products.
(2) U.S. Tariff System
The U.S. tariff system uses the Harmonized Tariff Schedule of the United States (HTSUS), which is based on the Harmonized Commodity Description and Coding System (Harmonized Commodity Description and Coding System (HCDS)) of the Customs Cooperation Council. Most U.S. tariff rates are ad valorem, but certain imports, primarily agricultural products, are subject to ad valorem duties. There are also some products that are subject to tariffs at compound rates. Some products, including sugar, are also subject to tariff quotas.
The tariffs in the U.S. Harmonized Tariff Schedule (HTS) are listed in two columns, one of which includes the most-favored-nation (MFN) rate (which the U.S. refers to as the Normal Trade Relations (NTR) rate) and the Special Preferential Tariff (SPT) rate, and the other lists the rates applicable to countries that do not enjoy the MFN rate.
2, the main import management system
The United States relies mainly on tariffs to manage and regulate imports and their scale, but for relatively sensitive imports, such as agricultural products, the United States also uses tariff quotas. In terms of textile trade, on January 1, 2005, the United States has canceled the textile quota restrictions as scheduled. In terms of government procurement, the parts not covered by the WTO Agreement on Government Procurement are governed by the Buy American Act of 1933. Second, for reasons of environmental protection, national security, balance of payments, etc., Congress has authorized the executive branch, through many pieces of domestic legislation, to adopt quota management, prohibit imports, and collect import surcharges to impose restrictions on imports. Such laws include the Marine Mammal Protection Act of 1972 (animal protection), Section 232 of the Trade Expansion Act of 1962 (national security); and Section 122 of the Trade Act of 1974 (balance of payments). Finally, there are also a large number of product standards that exist in U.S. commercial practice that also serve to restrict imports to some extent.
3. Major Export Control Systems
(1) Export Controls
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For the purpose of protecting national security, advancing U.S. foreign policy, restricting the proliferation of chemical and biological weapons and missile technology, and ensuring the adequate supply of some shortages of materials in the country, the U.S. government imposes export export controls. Depending on the product being exported and the purpose of the policy, export controls are administered by the Bureau of Industry and Security (BIS) of the Department of Commerce, the Department of State, and the Department of the Treasury.
The Bureau of Industry and Security (BIS) of the Department of Commerce is responsible for issuing export licenses for shortages and dual-use products under the International Emergency Economic Powers Act (IEEPA), the Export Administration Act of 1979 (EAA), and the Export Administration Regulations (EAR).
The Department of State administers export licenses for defense products and services under the Arms Export Control Act.
The Department of the Treasury regulates the export licensing of goods from countries, companies, and individuals subject to U.S. trade and economic sanctions under the International Emergency Economic Powers Act (IEEPA), the Trading with the Enemy Act (TWEA), the U.N. Participation Act (UNPA), and existing anti-terrorism measures.
(2) Export Promotion
The U.S. export promotion is mainly in the areas of export financing, duty-free treatment in foreign trade zones, export tax rebates, exemption from income tax on some of the offshore income of foreign sales companies, and the Trade Adjustment Assistance Program.
① Export Financing
The U.S. Export-Import Bank is the official agency for export credit. The Bank provides financing to exporters and overseas purchasers through a range of loan, guarantee, and insurance programs.
In FY2004, the Ex-Im Bank budgeted approximately $11.6 billion available to support exports.
② Foreign Trade Zones
Foreign Trade Zones (FTZs) were established by the Foreign Trade Zones Act of 1934 and exempt foreign and domestically produced goods from customs duties, storage taxes, or excise taxes on entry into FTZs. Foreign trade zones are general trade zones and separate trade zones.
3) Duty Drawback
Section 313 of the Tariff Act of 1930 created the duty drawback system. Under this rebate system, customs duty or other taxes charged on imported goods or raw materials shall be refunded at the time of their export.
4 Trade Adjustment Assistance
Currently, U.S. Trade Adjustment Assistance (TAA) covers the Worker Trade Adjustment Assistance Program (WTAAP), the Farmer Trade Adjustment Assistance Program (FTAAP)
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Programs and the Business Trade Adjustment Assistance Program (BTAP). The underlying legislation is the Trade Act of 1974 as amended by Part A of the Trade Act of 2002. The 2002 Trade Act extended until September 30, 2007, these three assistance programs. Under the amended law, in addition to allowing a portion of health insurance premiums to be used as a tax credit and a special wage gap subsidy for workers over the age of 50, $20 million is available each fiscal year from 2003 through 2007 for the training of eligible workers. Another $16 million per fiscal year could be used to assist eligible businesses, with an even higher $90 million budgeted for assistance to farmers.
4. Other Trade-Related Tariff Regimes
In addition to the basic most-favored-nation (MFN) tariff rate, certain countries enjoy more favorable tariff arrangements under reciprocal free trade agreements with the United States. In addition, most developing countries and least developed countries (LDCs) are eligible for special preferential tariffs under tariff preference programs unilaterally established by the United States.
(1) Reciprocal Free Trade Agreements
In 2004, the U.S. completed negotiations with Australia and Morocco, increasing the number of free trade area agreements to 12; in addition, the U.S. is a member of five regional trade arrangements, including the North American Free Trade Area (NAFTA). Members of these reciprocal free trade agreements enjoy more favorable treatment than the most-favored-nation (MFN) tariff rate under the agreements to which they belong, respectively. To implement these trade agreements, the U.S. Congress has introduced corresponding laws, such as the North American Free Trade Agreement Implementation Act and the U.S.-Israel Free Trade Agreement Act.
(2) Tariff Preference Programs
In addition to reciprocal arrangements, the U.S. has established a number of unilateral tariff preference programs, which are mainly applicable to developing countries as well as the least developed countries. The oldest of these is the Generalized System of Preferences (GSP) program introduced in 1976. Under the program, about 4,650 products from 135 countries and territories enjoy duty-free treatment for exports to the U.S. In 2004, Algeria and Iraq were added as GSP beneficiaries, and Chile, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Antigua and Barbuda, Barbados, and Bahrain are no longer eligible for GSP preferences due to the signing of a free trade agreement with the U.S., membership in the European Union or GSP graduation, etc. are no longer eligible for U.S. GSP treatment.
Similar preferential arrangements include the African Growth and Opportunity Act of 2000 (AGOA), which provides duty-free treatment for products originating in sub-Saharan Africa, the Andean Trade Preference Act, and the Caribbean Basin Program.
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5. Other Relevant Regimes
(1) Customs Regime
Since the enactment of the security measures in 2002, U.S. import procedures have undergone significant changes. New regulations require that shipments destined for the United States transmit relevant electronic information to U.S. authorities prior to departure; and the United States has entered into agreements with a number of foreign seaports to scrutinize the cargo contained in containers destined for the United States. In addition, the Bioterrorism Act of 2002 requires most food manufacturing and handling businesses to register, and all vessels carrying food destined for the United States should notify the FDA in advance.
(2) Trade Remedies
The U.S. trade remedy system can be categorized into those affecting imports and those affecting exports. Remedies for imports mainly include anti-dumping and countervailing measures against unfair price competition, safeguard measures to adjust imports, and measures taken against imports that infringe on U.S. intellectual property rights by applying Section 337. Trade remedies for exports are mainly reflected in the application of the 301 series of provisions.
The main elements of the current U.S. antidumping and countervailing laws are basically embodied in the U.S. Code, Title 19, Tariffs, Chapter 4 of the Tariff Act of 1930, as amended, Subchapter IV, and specific administrative regulations are distributed in the U.S. Code of Federal Administrative Regulations, Title 19. The President may impose safeguard measures on specific imports under the authority of sections 201-204 of the Trade Act of 1974. This authorization may be used where the imported articles do not engage in acts of unfair competition. For imports suspected of infringing U.S. intellectual property rights, the U.S. protects the rights and interests of U.S. intellectual property owners primarily through Section 337 of the Tariff Act of 1930. The U.S. International Trade Commission (ITC) is the enforcement agency for Section 337. The agency can issue exclusion orders directing Customs to prohibit the importation of goods that infringe U.S. intellectual property rights.
Section 301 of the Trade Act of 1974 is the primary law under which the rights of U.S. corporations are defended under existing trade agreements to expand overseas market access for U.S. products and services against foreign violations of intellectual property rights and other acts that affect the export of U.S. products. The law provides specific procedures for the U.S. Trade Representative (USTR) to investigate foreign infringements and to consult with foreign governments to find solutions. 301 has been expanded to include Super 301 and Special 301 for intellectual property protection, and the 301 series is administered by the Office of the U.S. Trade Representative (USTR).
(3) The Impact of Political and Economic Security Measures on Trade
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For political and economic security reasons, the U.S. government can restrict or regulate both imports and exports, as long as they are in compliance with relevant legislation. Such legislation includes the International Emergency Economic Powers Act (IEEPA), which was passed in 1977 and authorizes the President to freeze the assets of foreign persons in the United States, to impose trade embargoes, or to take other appropriate measures in response to threats to national security, foreign policy, or economic interests; and the Trading with the Enemy Act (TIEA), which was partially renewed for a one-year extension of the authorization ordered by President George W. Bush on September 10, 2004, and extended to September 14, 2005, for a period of one year. which was extended until September 14, 2005; the Drug Control Trade Act; the International Security and Development Cooperation Act of 1985; and the Prohibition of Transactions with Cuba Act, among many other pieces of legislation.
(C) Investment Management System
The United States basically has no restrictions on investment, but there are some specific regulations in some of the following relatively sensitive industries.
1, aviation
According to the U.S. Department of Transportation, the acquisition of a U.S. airline by a foreign company may not exceed 25% of the shares of the airline, and the proportion of the airline's board of directors in the U.S. by a director may not be less than two-thirds. Applications for acquisition of U.S. airlines by foreign companies are approved by the U.S. Department of Transportation.
2. Communications
Under the U.S. Federal Communications Act, the U.S. government will deny a license to operate in the U.S. to a foreign national, foreign corporation, or foreign government if the foreign national, foreign corporation, or foreign government controls one-fifth of the shares of a U.S. communications company or if the company has more than one-fourth of its board of directors in the United States.
3. Maritime Transportation
For shipping companies operating U.S. coastal and inland waterway shipping operations, a foreign individual, corporation, or government may not own more than 25% of the shares of the U.S. shipping company, or the coastal and inland waterway shipping rights are revoked. The sale by a U.S. shipping company of its U.S.-registered vessels to a foreign company without the approval of the Federal Secretary of Transportation is a violation of law and will be prosecuted under U.S. law.
4. Atomic Energy
The U.S. Federal Atomic Energy Act places severe restrictions on foreign involvement in atomic energy production.
5. Finance
Financial openness to foreign capital is regulated by both federal and state laws, and is complicated by a variety of legal provisions
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One. In general, the entry of foreign companies into the sector by way of mergers and acquisitions is strictly controlled under the Bundesverfassungsgesetz and state laws.
(iv) Major trade and investment administrations
The U.S. Constitution gives Congress the power to regulate foreign trade as well as to impose tariffs. Congress has delegated many of these functions to the executive branch through a series of laws, while the executive branch maintains close working relationships with key congressional committees and private sector advisory groups.
In the management of foreign trade, the main responsibilities of the executive branch of the U.S. government include three areas: first, the imposition of tariffs, which is carried out specifically by the Department of the Treasury and the Customs Department; second, import and export administration and services, which is carried out specifically by the U.S. Department of Commerce, the Department of Agriculture, and the Customs Department, among other agencies; and, third, foreign trade negotiations, which is carried out primarily by the National Economic Council and the U.S. Trade Representative, which fall under the jurisdiction of the President.
1, Congress
The U.S. Constitution, Article I, Section 8, clearly states that Congress has the power to levy taxes and the management of foreign trade, therefore, the conclusion of free trade agreements, the implementation and revision of tariffs and related trade measures need to be based on the specific legislation of the Congress or in the Congress within the scope of the implementation of the special authorization.
The role of Congress in trade policy decision-making is basically divided into two aspects: trade legislative power and oversight power. To ensure that the executive branch implements trade laws appropriately, Congress requires the executive branch to consult with it on a regular basis. Congress also requires the Office of the U.S. Trade Representative (USTR) and the U.S. International Trade Commission (ITC) to submit numerous reports each year evaluating U.S. trade measures in order to keep Congress informed of the implementation of those measures.
There are more than a dozen specialized committees in the Senate and House of Representatives that deal with foreign trade administration, with the House Committee on Fundraising and the Senate Committee on Finance playing a prominent role.
2, the executive branch of government
(1) U.S. Trade Representative
The predecessor of the U.S. Trade Representative was the Special Trade Representative established under the Trade Expansion Act of 1962, which was changed to its current name in 1980. The USTR is a member of the President's Cabinet and serves as the President's principal trade advisor, foreign negotiator, and spokesperson on trade issues, with specific responsibility for promoting and coordinating U.S. policy on international trade and direct investment, and for implementing negotiations with other countries in the aforementioned areas. Its responsibilities and importance have grown through several pieces of legislation.
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In addition, in the Omnibus Trade and Competition Act of 1988, Congress required the Office of the U.S. Trade Representative (USTR) to serve as a representative of all agencies established by the President in which international trade is predominant, and of all economic summits or other international conferences at which international trade is a major theme. For the purposes of the U.S. antidumping and countervailing laws under U.S. antidumping and countervailing laws. and Section 337 and 301, among others, for actionable unfair trade cases, the Office of the U.S. Trade Representative is also responsible for identifying and coordinating agency resources.
Under the Uruguay Round Agreements Act, the Office of the U.S. Trade Representative has primary responsibility for negotiations on all issues considered under the WTO.
Office of the U.S. Trade Representative (USTR) underwent an organizational restructuring in June 2003. The Offices of China and Japan were abolished and merged into the Office of North Asian Affairs. The Office of the U.S. Trade Representative also has three deputy representatives at the ambassadorial level.
(2) Department of Commerce
The Department of Commerce is the principal U.S. government agency responsible for foreign trade administration and export promotion, with the following major functions: enforcing U.S. foreign trade laws and regulations, implementing policies to promote U.S. foreign trade and investment; overseeing the implementation of bilateral and multilateral trade agreements; and providing counseling and training for U.S. businesses.
The main departments of the Department of Commerce responsible for foreign trade management are the International Trade Administration (ITA) and the Bureau of Industry and Security (BIS). The International Trade Administration (ITA) is responsible for promoting the development of U.S. export trade; conducting trade statistics and collecting information on tariff rates; overseeing market access and the fulfillment of international trade agreements signed by the U.S., and eliminating barriers to foreign market access; and implementing antidumping and countervailing investigations. The Bureau of Industry and Security (BIS) is primarily responsible for developing, implementing and interpreting export control policies regarding U.S. dual-use products, software and technology, and issuing corresponding export licenses.
(3) International Trade Commission
The U.S. International Trade Commission (ITC)
The U.S. International Trade Commission (ITC) is a federal agency with broad investigative authority over trade issues, formerly the U.S. Customs Tariff Commission (renamed the U.S. International Trade Commission (USITC) by the Trade Act of 1974), created by Congress in 1916.
The main tasks of the USITC include: determining whether U.S. domestic industries have been materially harmed by imports that are less than fairly priced or subsidized; taking countermeasures (with the President's veto power) against unfair trade practices, such as infringement of intellectual property rights; and recommending remedies to the President for industrial sectors that have been seriously harmed by increased imports.
(4) Customs
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Customs is responsible for collecting import duties and enforcing up to 400 laws and regulations related to international trade. Under Section 402 of the Homeland Security Act of 2002, Customs was transferred to the newly created Homeland Security Agency, but the Customs revenue collection functions previously delegated by law to the Department of the Treasury remain in the hands of the Treasury.
(5) Coordinating Bodies
① Coordinating Bodies for Trade Policy
The U.S. government departments and Congress coordinate the formulation of foreign trade policy through three different levels of coordinating bodies: the Trade Policy Working Committee, the Trade Policy Review Group, and the National Economic Council. The first two bodies are chaired by trade negotiators.
In 1993, President Clinton established the National Economic Council as the highest level of coordination, directly under the President's direction, consisting of the Vice President, the Secretary of State, the Departments of Treasury, Agriculture, Commerce, and Labor. The committee is mainly responsible for considering and evaluating trade policy issues submitted by the Trade Policy Review Group memorandum of trade policy issues and trade policy issues of a special nature or controversial.
② Coordination of investment policy
Committee on Foreign Investment in the United States (CFIUS) was created in 1975 and is responsible for the implementation of U.S. investment policy, such as the review of cross-border mergers and acquisitions in accordance with the Exxon-Florio Amendment.
The M&A materials declared to CFIUS should include basic information about the acquirer, an overview of the M&A transaction, the assets to be acquired, and future plans. The Committee on Foreign Investment (CFIUS) decides whether or not to approve the M&A transaction within one month after receiving the notification, and if it deems it necessary to conduct a further review, it may also have a 45-day investigation period. The only criterion that CFIUS examines is whether the M&A will jeopardize national security. If CFIUS determines that the merger or acquisition threatens national security, CFIUS will refer the merger or acquisition to the President of the United States for review, and the President will have 15 days to make a decision on whether to prohibit the merger or acquisition.
3. Private Sector Advisory Board System
The Private Sector Advisory Board system was originally established by Section 135 of the Trade Act of 1974, and was expanded by the Trade Agreements Act of 1979 and the Omnibus Trade and Competition Act of 1988 to form the three-tiered system of private sector advisory currently administered by the United States Trade Representative. At the top of the hierarchy is the Advisory Committee on Trade Policy and Negotiations (ACTPN), to which representatives are appointed by the President. The middle tier consists of policy advisory committees representing industry, agriculture, services and other sectors of the economy. Experts from a wide range of industries make up the base tier of the system, which is responsible for providing specific technical information on trade issues related to specific
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areas. Representatives of the middle and base tiers are appointed by the USTR or relevant department heads.
III. Trade Barriers
(1) Tariffs and Tariff Administration Measures
1. High Tariffs and Tariff Peaks
The U.S. tariffs as a whole are relatively low, but high tariffs and tariff peaks still exist in some areas. Currently, U.S. high tariff lines that exceed three times the average tariff level account for 7.5% of total tariff lines, and tariff lines with tariffs exceeding 15% account for 4.3% of total tariff lines. The high tariffs and tariff peaks are mainly concentrated in broad categories of products such as textiles and apparel, leather, rubber, ceramics, footwear, and travel products, which are China's main exports to the United States and have a large impact on Chinese products. From the shoes and ceramic products and other specific commodity categories, the United States usually applies lower tariffs to high-priced products, while low-priced products apply higher tariffs, Chinese products in the United States at the low end of the market share is higher, and this tariff structure makes the Chinese products in the U.S. market is in an unfavorable competitive position.
2, tariff escalation
The U.S. tariff escalation phenomenon is more serious. The U.S. arithmetic average tariffs on minerals, precious metals and gemstone products are 0.43% on primary products, 1.17% on semi-finished products, and 6.12% on manufactured products; the arithmetic average tariffs on textiles and apparel products are 7.17% on primary products, 9.21% on semi-finished products, and 10.16% on manufactured products. Taking products under individual tariff lines again as an example, the tariff rate for untwisted single yarn spun from polyamide-6 for non-retail purposes is zero, the tariff rate for unbleached or bleached pure nylon cloth is 13.6%, and the tariff rate for knitted or crocheted T-shirts, sweatshirts, etc., made of chemical fibers is 32%. The tariff structure of the above products obviously restricts China's exports to the U.S. of semi-finished or manufactured products with higher added value, causing damage to the reasonable interests of Chinese exporters.
3. Tariff Quotas
The U.S. imposes tariff quotas on some agricultural products in order to control the volume of imports and to protect the interests of domestic producers. agricultural products subject to tariff quotas in FY2004 include almost all dairy products, sugar and sugar-containing products, peanuts and some peanut products, unprocessed tobacco and processed tobacco, tuna, most fresh, frozen or chilled beef and cotton, among others. High tariffs are levied on out-of-quota products, such as skim milk powder, where the average tariff level is 2.2% in-quota and 52.6% out-of-quota.
(ii) Import Restrictions
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1. Import Prohibitions
Section 232(2) of the Trade Expansion Act of 1962 provides that the U.S. Department of Commerce may, on its own initiative or on the basis of an application by another department or a relevant party in interest, initiate a Section 232 investigation to assess whether the imports in question pose a threat of damage or disruption to the United States' national security. national security or threaten to undermine it, and submit a report thereon to the President, who will decide whether to take adjustment measures against the imports. From 1980 to the present, the U.S. Department of Commerce has completed 16 Section 232 investigations.
While the Trade Expansion Act of 1962 provides for factors to be considered in determining whether imports of a particular product are damaging or threaten to be damaging to national security, the lack of clarity in the standards has resulted in the President and the U.S. Department of Commerce and other executive departments enjoying a great deal of discretion in the actual operation of the program. In addition, the relevant U.S. industry to apply for a Section 232 investigation does not need to provide evidence of substantial damage to the industry, which greatly reduces the threshold for the initiation of a Section 232 investigation, and it is difficult to screen the enterprise to apply for a Section 232 investigation is to prevent the destruction of national security, or to avoid the competition of imported products with them. Therefore, China hopes that the U.S. will use the above measures prudently to avoid impacting normal trade.
2. Import quotas
The United States, under the Uruguayan Agreement on Textiles and Clothing (ATC), eliminated all quotas on the quantity of textiles on January 1, 2005, but the United States still has some restrictive measures in the implementation of the specifics as follows.
The U.S. Textile Agreement Executive Committee on December 13, 2004 issued on the 2004 exports to the United States but more than the 2004 quota number of that part of the imported textiles handling procedures, said it will not allow this part of the over-quota imports in January 1, 2005 quota canceled immediately after the entry, but monthly by the amount of the 2004 quota of 5% of the entry. In addition, all over-quota imports are required to submit customs declarations at the required time to ensure that the 5% quota is distributed proportionately among all products, and that any portion exceeding 5% will be delayed until the following January or thereafter before being allowed to pass through customs. The delayed entry of products will inevitably increase the importer's warehousing costs and impede the timely supply of the products in question.
In addition, the United States, in the absence of factual evidence in line with the provisions of the bilateral agreement, unilaterally determined that there is an illegal re-export of Chinese textiles, and deducted China's textile export quota to the United States, which greatly impedes China's textile exports to the United States normal. As a matter of fact, after China's investigation, among the illegal re-exports of Chinese textiles recognized by the U.S. side, a considerable part of them are re-exports by enterprises in third countries (regions), and a considerable part of them are re-exports to the U.S. by U.S. importers colluding with U.S. Customs officers to re-export products normally exported by Chinese enterprises to the third countries (regions) to the U.S.
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Country. China has made numerous representations to the U.S. side on this issue, but the U.S. side has only partially corrected its wrongful practice.
(C) Barriers to Customs Clearance
1. Unreasonable Customs Clearance Requirements for Some Products
The U.S. Customs requires exporters to provide all additional documents and related information when clearing imports, and for some imports, such as textiles, apparel, or shoes, the information required is far more than that needed for normal customs clearance. These procedures are not only cumbersome and costly, and constitute a trade barrier for exporters, especially small exporters.
U.S. Customs imports of textiles and apparel in some cases also require confidential information on processing procedures. For example, for apparel whose exterior is composed of more than one material, the relevant weight, composition value and surface area of each component must be provided, a practice that objectively leads to increased costs.
In addition, the U.S. Customs introduced regulations in January 2003, all shipments of eyeglasses to the U.S. must be accompanied by a "drop test certificate", or will not be allowed to pass through customs. U.S. Customs regulations of the scope of glasses, including ordinary glasses, sunglasses, sent by express mail, as a sample of the glasses are no exception.
2. Bioterrorism Act Issues
China recognizes the anti-terrorism efforts made by the United States through the Public Health Security and Bioterrorism Prevention and Response Act (Bioterrorism Act) enacted in June 2002 and a series of regulations issued by the U.S. Food and Drug Administration (FDA), such as the Registration of Food Enterprises (RFE), but is concerned about the possibility that the above measures may result in a reduction in customs clearance speed, increase in the cost of exporting enterprises, and increase in the cost of exporting goods. However, we are concerned that these measures may have negative impacts such as reducing customs clearance speed, increasing export costs for enterprises, and increasing uncertainty in export markets. In particular, with regard to market uncertainty, according to the Report on Denial of Market Access for Imported Products of the U.S. Food and Drug Administration (FDA), as of the end of 2004, a total of 1,815 batches of China's products had been denied access to the U.S. market. China is concerned about this.
3. Container Security Initiative (CSI) and 24-Hour Rule
In order to prevent terrorists from utilizing containers to carry out terrorist activities, the U.S. Customs Service launched a "Container Security Initiative (CSI)" in January 2002 to cooperate with foreign customs in combating terrorism. As of February 2005, 45 ports in 23 countries or regions have pledged to join the initiative. on July 29, 2003, China also signed a declaration of principles with the U.S., and the scope of cooperation includes two major container ports in Shanghai and Shenzhen.
In order to better implement the initiative, the U.S. Customs and October 31, 2002 announced a "24-hour warehouse receipt forecast rules", and February 2, 2003 from the official implementation. The rules require shipping lines or non-vessel
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Carriers in the United States to the United States of America in the containerized cargo to the U.S. port of destination 24 hours before the arrival of the U.S. Customs to electronically notify the U.S. Customs about the details of each container for Customs verification. Some shipping lines have been forced to charge shippers a surcharge on advance warehouse receipts to pass on the resulting increase in costs, a measure that has clearly increased the cost of exporting containers by sea to the United States. China is concerned that the U.S. has adopted the above measure.