USTR Releases Annual Report on Foreign Trade Barriers

USTR released today its annual report on foreign trade barriers - the National Trade Estimate (NTE) - along with two new reports on non-tariff barriers to agricultural products (Sanitary and Phytosanitary, or SPS, issues) and manufactured goods (Technical Barriers to Trade, or TBT).  The SPS report and TBT report are not brand new - the old NTE hit on these issues - but they do represent an increased USTR focus on non-tariff barriers (NTBs), and are all part of the "enforcement" efforts under the Obama administration's new National Export Initiative.

I plan to blog more on the NTE at some point, but for now, let me just deliver two initial thoughts:

• Although the NTE is nothing new (it's released annually and has been for decades) and a quick review indicates that the 2010 version looks to be about 80% recycled from last year's report (cutting-and-pasting is also nothing new for the NTE), the media, of course, have focused on China and the fact that the new reports (a) omit entirely any mention of Chinese currency policies (hooray!); and (b) list tons of other Chinese trade barriers.  This coverage is not surprising, of course, considering what a hot button issue China trade is right now.  But despite the significant focus on, and pointed discussion of, Chinese barriers to US exports, everyone needs to take a long, deep breath here.  First, the lack of a currency mention means that USTR is not getting into the currency debate and is leaving the issue to Treasury - where it always has been and should remain.  This is a good signal that the administration is not planning on doing anything overly hasty regarding China's currency (like a WTO complaint) and is leaving the overheated rhetoric to Congress.  Second, the laundry list of Chinese trade barriers is nothing new.  Last year's China section was 56 pages long; this year's sections are about 49 pages total (37 NTE + 5 SPS + 6 TBT).  So it's not like the Obama administration is taking some obscenely hard line here.  Indeed, they look to be pretty level-headed.  Kudos for that.

• A quick comparison of the 2009 report and the 2010 report indicates that USTR's discussion of Google's problems with China's "great firewall" has been purged from the 2010 report.  The general discussion of Chinese censorship remains, but no mention of Google - even though the Google-China conflict has escalated dramatically over the last year.  What gives?  My two guesses: (1) Google wants the issue under the radar and asked USTR to remove the discussion (maybe even after getting some grief from the PRC last year); or (2) the White House understands the immense sensitivity and political volatility of this issue and wants to avoid a serious bilateral diplomatic conflict (replete with screaming, red-faced politicians!).  Of course, there's always option 3: maybe I don't know anything (always an option).

More later on this, but that's it for now.  Happy reading!