[Title] The Application of the Super 301 Provisions to Japan, Statement of Ambassador Carla A. Hills

Statement of Ambassador Carla A. Hills

I would like to outline the Administration's plans for implementing the so-called "Super" and "Special" 301 provisions of the 1988 Trade Act.

The Super 301 provisions direct the USTR to identify U.S. "trade liberalization priorities":

- priority practices which, if eliminated, would significantly increase U.S. exports, and

- priority countries, taking into account the number and pervasiveness of significant trade barriers.

That identification triggers an investigation and negotiations with our trading partners over the next 12 to 18 months that seek to eliminate these barriers.

The Special 301 provisions direct the Administration to state its priorities in seeking to expand adequate and effective protection of intellectual property rights.

The Administration will use these provisions as part of its overall trade strategy: to open markets and expand international trade. Super and Special 301, like other trade policy tools at our disposal, will be used to create an ever-expanding multilateral trading system based upon clear and enforceable rules.

The Administration's top "trade liberalization priority" is to conclude successfully the Uruguay Round of multilateral trade negotiations by December 1990. Right now, the United States and over 100 other nations are working in Geneva to strengthen the global trading system, and to develop rules to cover agricultural trade and new areas such as services, investment, and intellectual property rights.

We will use Super 301 negotiations to support and complement our Uruguay Round efforts. We will focus Super 301 on the elimination of specific practices, which, in addition to being serious barriers to trade, are indicative of broader areas of concern to the global trading system. Therefore, we have identified six specific priority practices in three priority countries. They are as follows:

- Quantitative import restrictions, including import bans and restrictive licensing, imposed in Brazil.

- Exclusionary government procurement practices in the satellite and supercomputer sectors in Japan, which bar foreign suppliers.

- Technical barriers to trade in the forest products sector in Japan, which impose unnecessary obstacles to imports.

- Trade-related investment measures in India that prohibit or burden foreign investment.

- Barriers to trade in services, specifically, the closure of India's insurance market to foreign insurance companies.

These categories of barriers, and the six individual priority practices that they encompass, do not represent all of the major trade barriers facing American exporters, but they are among the most important. The elimination of these practices is likely to have significant potential to increase U.S. exports, either directly or by establishing a beneficial precedent. We look forward to working constructively with Japan, Brazil, and India to resolve these issues expeditiously.

With respect to Japan, the President announced today a separate Administration initiative. He has directed the Secretaries of state and Treasury to join me in forming a high level committee, which will include Commerce, Labor and other interested agencies, to propose negotiations with Japan on structural adjustment matters. These matters include structural impediments to trade, balance-of-payments adjustment, and such anticompetitive practices as bid-rigging, market allocation, and group boycotts. These negotiations would initially focus on major structural barriers to imports such as rigidity in the distribution system and pricing mechanisms. The negotiations sought by the United States in this Structural Impediments Initiative will address broader issues and will take place outside of section 301.

Other trade barriers around the world are and will continue to be addressed in ongoing negotiations with our trading partners. Principal among them are trade-distorting subsidies and agricultural policies. These practices are no less important than those identified as "priority practices" under the statute. However, we have determined that their elimination can be better pursued at this time outside of section 301, especially through multilateral negotiations in the Uruguay Round.

In addition, the identification of Super 301 priorities in no way weakens our resolve to otherwise use section 301 authority where appropriate, including the self-initiation of new investigations or the acceptance of petitions by private parties. We will also continue to pursue trade barriers already the subject of investigations, negotiations, or action under section 301, including Japan's practices affecting construction services and semiconductors.