- What is Fast Track Authority?
Fast Track Authority is trade agreement negotiation authority. Fast track authority provides two guarantees essential to the successful negotiation of trade agreements: (1) a vote on implementing legislation within a fixed period of time, and (2) a yes or no vote on trade agreement legislation without allowing amendments to the legislation.
- What is a Regional Trade Agreement (RTA)?
A Regional Trade Agreement is an agreement undertaken by countries located within a defined geographic area whereby the participating countries align themselves with each other for the purpose of achieving a pre-determined form of economic integration.
- What forms of economic integration are Regional Trade Agreements most commonly designed to achieve?
Free trade areas, customs unions, common markets and economic unions.
- What is a free trade area?
A free trade area eliminates barriers to trade in goods between or among its members, but the members retain all of their preexisting tariffs and other trade barriers in their trade relations with third countries. The North American Free Trade Agreement (NAFTA) is an example of a free trade area.
- What is a customs union?
A customs union eliminates barriers to trade in goods between or among its members and adopts a common external tariff that all members of the customs union apply to trade from countries outside the union. The Andean Group comprised of Bolivia, Colombia, Ecuador, Peru, and Venezuela, is an example of a customs union.
- What is a common market?
A common market eliminates all barriers to trade in goods among the members and adopts a common external tariff. Additionally, a common market also permits the free movement of goods, services, people, and capital within the market. The Southern Common Market (MERCOSUR) is an example of a common market.
- What is an economic union?
An economic union eliminates all barriers to trade in goods among the members, adopts a common external tariff, permits the free movement of goods, services, people, and capital within the market and provides for common monetary policy, a common fiscal policy and a common currency for its members. The European Union (EU) is an example of an economic union.
- What is the North American Free Trade Agreement (NAFTA)?
NAFTA is a free trade agreement that comprises Canada, the U.S. and Mexico. The objectives of the Agreement are to eliminate barriers to trade, promote conditions of fair competition, increase investment opportunities, provide protection for intellectual property rights and establish procedures for the resolution of disputes.
- What is Mercosur?
Mercosur (or in Portuguese, Mercosul) is a regional trade agreement subscribed to by Argentina, Brazil, Paraguay and Uruguay. Originally formed as a customs union, the treaty calls for transformation to a common market by the year 2006.
- What is the European Union (EU)?
The European Union, formerly known as the European Economic Community or the Common Market, is an economic union currently subscribed to by 15 member countries; namely:
Austria
Belgium
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
The Netherlands
Portugal
Spain
Sweden
United Kingdom
- What is the Asia-Pacific Economic Cooperation Forum (APEC)?
The Asia-Pacific Economic Cooperation (APEC) is a 21-member organization to discuss liberalization and facilitation of trade and investment and economic cooperation. Formed in 1989 as an informal forum for dialogue, APEC has taken steps in recent years to institutionalize its functions. Current member countries of APEC are:
Australia
Brunei Darussalam
Canada
Chile
People's Republic of China
Hong Kong
Indonesia
Japan
Republic of Korea
Malaysia
Mexico
New Zealand
Papua New Guinea
Peru
Republic of the Philippines
Russia
Singapore
Chinese Taipei (Taiwan)
Thailand
United States of America
Vietnam
- What is ASEAN?
ASEAN is the Association of Southeast Asian Nationals (ASEAN). ASEAN’s main objectives are “to accelerate economic growth, social progress and cultural development” and “to promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields.” ASEAN membership is currently comprised of Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
- What is the World Trade Organization (WTO)?
The World Trade Organization (WTO) is the successor organization to the General Agreement on Tariffs and Trade (GATT), the fountainhead of international trade law. As of January 2002, the WTO was comprised of 144 countries.
- What is the Organization of American States (OAS)?
The Organization of American States (OAS) is the world's oldest regional organization, dating back to 1889. The OAS currently has 35 Member States and has granted Permanent Observer status to 37 States, as well as the European Union. OAS describes its basic purposes as follows: to strengthen the peace and security of the continent; to promote and consolidate representative democracy, with due respect for the principle of nonintervention to prevent possible causes of difficulties and to ensure the pacific settlement of disputes that may arise among the Member States; to provide for common action on the part of those States in the event of aggression; to seek the solution of political, juridical and economic problems that my arise among them; to promote, by cooperative action, their economic, social and cultural development, and to achieve an effective limitation of conventional weapons that will make it possible to devote the largest amount of resources to the economic and social development of the Member States.
In recent years, the OAS adopted a new agenda, which includes the establishment of a Free Trade Area of the Americas, in which it hopes to progressively eliminate barriers to trade and investment.
- What is the Free Trade Area of the Americas (FTAA)?
The Free Trade Area of the Americas (FTAA) was launched by President Bush in 1990 as a proposal to integrate the economies of the countries in the Western Hemisphere. The goal of the FTAA is a free trade area stretching from Alaska to Tierra del Fuego by 2005.
- What is the Organization for Economic Cooperation and Development (OECD)?
The Organization of Economic Cooperation and Development is an international organization of the industrialized, market-economy countries. At OECD, representatives from Member countries meet to exchange information and harmonize policy with a view to maximizing growth within Member countries and assisting non-Member countries develop more rapidly. OECD membership is currently comprised of 29 members as follows:
Australia
Austria
Belgium
Canada
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Iceland
Ireland
Italy
Japan
Korea
Luxembourg
Mexico
Netherlands
New Zealand
Norway
Poland
Portugal
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
- What is the World Customs Organization (WCO)?
Formerly known as the Customs Cooperation Council, the World Customs Organization was founded in 1950 to study all questions relating to cooperation in customs matters, and to examine technical aspects of customs with a view to attaining the highest possible degree of uniformity. The other activities of the WCO include preparing conventions and recommendations; ensuring uniform interpretation and application of customs conventions (on valuation, tariff and statistical nomenclature, and customs procedures); ensuring conciliatory action in case of dispute; circulating information and advice regarding customs regulations and procedures; and cooperating with other international organizations. As of January 2003, 161 countries comprised the membership of the WCO.
- What is the Caribbean Basin Initiative (CBI)?
Caribbean Basin Initiative (CBI) is a U.S. trade program providing for the duty-free entry into the United States of merchandise from designated beneficiary countries or territories in the Caribbean Basin. The purpose of the program is to increase economic and trade preferences for twenty-eight states of the Caribbean region. The 23 countries include Antigua and Barbuda, the Bahamas, Barbados, Belize, the British Virgin islands, Costa Rica, Dominica, the Dominican Republic, El Salvador, Grenada, Guatemala, Guyana, Honduras, Jamaica, Montserrat, the Netherlands Antilles, Nicaragua, Panama, St. Christopher-Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago.
- What is the Andean Trade Preference Act (ATPA)?
The Andean Trade Preference Act is a U.S. trade program, which authorizes preferential trade benefits for the four Andean nations of Bolivia, Colombia, Ecuador, and Venezuela.
- What is the U.S. Israel Free Trade Agreement?
The U.S. Israel Free Trade Agreement is a free trade agreement between the U.S. and Israel, which provided for the elimination of all customs duties and most non-tariff barriers between the U.S. and Israel by 1995.
- What does the phrase "normal trade relations" mean?
Formerly referred to as most favored nation status, normal trade relations is a designation of a non-discriminatory trade policy commitment on the part of one country to extend to another country the lowest tariff rates it applies to any other country. All contracting parties to the General Agreement on Tariffs and Trade (GATT) undertake to apply such treatment to one another under Article I of the treaty.
- What is the Generalized System of Preferences (GSP)?
The Generalized System of Preferences (GSP) is a program providing for free rates of duty for merchandise from beneficiary developing independent countries and territories to encourage their economic growth. GSP is on element of a coordinated effort by the industrial trading nations to bring developing countries more fully into the international trading system. The U.S. GSP scheme is a system of non-reciprocal tariff preferences for the benefit of beneficiary developing countries. The GSP eligibility list includes a wide range of products classifiable under approximately 3,000 different subheadings in the Harmonized Tariff Schedule of the United States (HTS or HTSUS). Eligible merchandise will be entitled to duty-free treatment provided the following conditions are met: (1) The merchandise must be destined for the United States without contingency for diversion at the time of exportation from the beneficiary developing country. (2) The UNCTAD (United National Conference on Trade and Development) Certificate of Origin Form A must be properly prepared, signed by the exporter and either be filed with customs entry or furnished before liquidation. (3) The merchandise must be imported directly into the United States from the beneficiary country. (4) The cost or value of materials produced in the beneficiary developing country and/or the direct cost of processing performed there must represent at least 35 percent of the appraised value of the goods.
- What is a common external tariff?
A common external tariff provides for a uniform rate of duty on third-country imports, regardless of the port of entry.
- What does the phrase "national treatment obligation" mean?
National treatment obligation is a nondiscrimination obligation imposed at the national level. Once imports have entered a country's territory, (1) internal taxes must be applied equally to imports and the like domestic product, and (2) national regulations must not treat imports "less favorably" than similar domestic goods.
- What are non-tariff barriers to trade?
Non-tariff barriers are import quotas or other quantitative restrictions, non-automatic import licensing, customs surcharges or other fees and charges, customs procedures, export subsidies, unreasonable standards or standards setting procedures, government procurement restrictions, inadequate intellectual property protection and investment restrictions that deny or make market access excessively difficult for goods or services of foreign origin.
- What is a voluntary restraint agreement (VRA)?
A voluntary restraint agreement is an agreement under which exporting countries of a product agree to limit the volume of their exports to an importing country.
- What are rules of origin?
Specific provisions, developed from principles established by national legislation or international agreements ("origin criteria"), applied by a country to determine the origin of goods.
- What is the purpose of rules of origin?
The purpose of any rule of origin is to determine the country of origin of an imported good. Put simply, "[a] rule of origin is a criterion that is used to determine the 'nationality' of a product or producer."
- What forms do rules of origin take?
Rules of origin can be non-preferential or preferential.
- What are non-preferential rules of origin?
Non-preferential rules of origin are origin rules typically specified in trade agreements and intended to apply to imported goods that are excluded from the application of preferential trade benefits, such as entry without restriction, punitive duty treatment, duty-free treatment or lower duty.
- Into what categories can preferential rules of origin generally be divided?
Preferential rules of origin can generally be divided into five separate categories: (a) goods wholly obtained; (b) goods substantially transformed; (c) goods which undergo prescribed tariff shifts; (d) prescribed percentage values added to goods; and (e) any combination of the preceding categories.
- What is "substantial transformation"?
A "substantial transformation" determines the country of origin of a product. This occurs when, after the last substantial manufacturing or processing, the commodity has its essential character.
- Why is it important to apply origin rules correctly?
An erroneous application of the country of origin rules under a specific trade agreement can have disastrous consequences for the parties involved in the transaction. For example, merchandise marked with the incorrect country of origin may be subject to seizure of an assessment of supplemental marking duties. The Customs Service may also impose substantial monetary or criminal penalties against the importer if Customs suspects that the importer purposefully obscured, removed, or altered the country of origin mark. Finally, the Trademark Act of 1946 prohibits the importation of articles of foreign origin, which display a name, or mark intended to persuade the public to believe that an imported product was manufactured in the United States or in "any foreign country or locality other than the country of locality in which it was in fact manufactured". An article imported in violation of this statute may be detained, seized, or forfeited.
- What is a certificate of origin?
A certificate of origin is a specific document identifying the goods. The authority or body empowered to issue it certifies expressly that the goods to which the certificate relates originate in a specific country. This certificate may also include a declaration by the manufacturer, producer, supplier, exporter or other competent person.
- What is an origin-marking rule?
The origin marking rule requires a marking to be placed on a product for the purpose of informing the purchaser of the product of its origin.
- What does the phrase "section 301 action" mean?
The phrase "Section 301 action" refers to Sections 301 of the 1974 Act. This Act is a non-military weapon available to United States government to influence the behavior of a foreign government and to retaliate against the behavior of a foreign government with respect to a particular trade position undertaken by a foreign government that is seen as unfair to American exporters competing in that country with local producers.
- What does the acronym "TRIPS" mean?
The acronym "TRIPS" refers to "trade–related intellectual property issues". The TRIPS Agreement is part of the GATT-WTO system. It breaks new ground because it does not deal strictly with trade in goods. It fills the IPR gap within GATT by establishing minimum levels of protection for copyrights, trademarks, geographical indications, industrial designs, patents, plant varieties, computer chip layout designs, and trade secrets. It couples these IPR protections with the requirement that WTO Members adopt effective enforcement mechanisms.
- Do any trade agreements deal specifically with trade in services?
Yes, the General Agreement on Trade in Services (GATS). The GATS is the first multilateral agreement covering trade and investment in the services sector.
- What is the Multifiber Agreement?
The Multifiber Arrangement (MFA) is a framework agreement, which governs most of the world in the trade of textiles and clothing.
- What is an EU directive?
An EU directive is a directive to member states of the European Union to change their laws conform to the EU directive. Required changes must be enacted within a period of 18 months.
- What is the Australia Group?
It is a multilateral forum that coordinates the member countries’ export controls on the export of chemical and biological weapons.
- What is the Free Trade Area of the Americas (FTAA)?
The Free Trade Area of the Americas (FTAA) is a U.S.-sponsored proposal to construct the world’s largest free trade zone stretching from Alaska to Argentina that would link thirty-four countries and a market of 800 million people. The project was originally floated in 1990 by ex-President George Bush. It will be his son, President George W. Bush, who will finalize the negotiation by January 1, 2005 at the latest. Countries are expected to ratify the treaty by the end of that year.
- Which countries are involved in the FTAA?
All independent countries in North, South and Central America and the Caribbean except for Cuba are involved in the FTAA. They are follows:
Antigua and Barbuda, Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Canada, Chile, Columbia, Costa Rica, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, United States, Uruguay, Venezuela.
- What will it mean for the countries involved?
North American businesses will receive duty-free access to South American and Caribbean markets and to those countries can export tariff free to North America. The treaty would cover practically all goods traded.
- What is the Missile Technology Control Regime (MTCR)?
The Missile Technology Control Regime (MTCR) was created in 1987 by the United States, the United Kingdom, Canada, Germany, France, Italy and Japan to restrict the proliferation of missiles and related technology. The MTCR is not a treaty; it is a set of export guidelines that each member implements in accordance with its own national legislation. The set of guidelines aims at controlling exports of missiles capable of delivering weapons of mass destruction as well as technology relating to these missiles.
There are currently 33 member countries of the MTCR. They are:
Argentina
Australia
Austria
Belgium
Brazil
Canada
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Iceland
Ireland
Italy
Japan
Luxembourg
The Netherlands
New Zealand
Norway
Poland
Portugal
Russia
South Africa
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
United States
- What is the Compact of Free Association (FAS)?
The Compact of Free Association (FAS) is a program that provides for duty-free entry of certain merchandise into the United States from freely associated states of the United States. The recipient states are the Marshall Islands and the Federated States of Micronesia (FSM). The Compact went into effect on November 3, 1986. It has no termination date.
