[Title] The Application of the Super 301 Provisions to Japan, Statement on United States Action Against Foreign Trade Barriers

Statement on United States Action Against Foreign Trade Barriers

May 26, 1989

Today the United States Trade Representative will submit to the Congress a report concerning actions to be taken under the so-called Super 301 provisions of the Omnibus Trade and Competitiveness Act of 1988. Those provisions provide that priority practices and countries shall be identified for the self-initiation of investigations under section 301.

I have discussed this matter extensively with Ambassador Hills and the other members of the Economic Policy Council. We agreed that the Super 301 provisions should be used (1) as a tool to open foreign markets, and (2) in support of the objectives of the United States in the ongoing Uruguay Round of trade negotiations of the General Agreement on Tariffs and Trade. This approach is designed to be consistent with the intent of Congress in drafting the legislation.

The list below indicates the specific priority practices and countries that can most effectively be the subjects of investigations under section 301 . The priority practices are grouped under headings that correspond to major types of trade barriers and distortions the United States is working to eliminate in the Uruguay Round. The priority countries have been selected on the basis of the number and pervasiveness of significant barriers to U.S. exports.

Super 301 Priority Practices and Countries

Quantitative restrictions/import licensing

1. Licensing of agricultural and manufactured products...Brazil

Government procurement

2. Satellites..................Japan

3. Supercomputers..............Japan

Standards

4. Forest products.............Japan

Services

5. Insurance...................India

Investment

6. Investment restrictions.....India

A satisfactory resolution of the above issues will significantly advance the objectives of U.S. trade policy. Our goal is to open markets and to eliminate trade barriers. We oppose protectionism in any and all forms. Therefore, I urge the governments of Japan, India, and Brazil to work constructively with us to resolve these issues expeditiously. The process of investigating and negotiating with priority countries on each of the priority practices will begin by June 16.

We also considered carefully a large number of practices that are not listed. In several cases we decided that we could best pursue remedying these practices multilaterally in the GATT or in the Uruguay Round of trade negotiations. Two examples are EC airbus subsidies and Japanese rice quotas.

The Uruguay Round of the GATT continues to be the centerpiece of our trade strategy. While the lack of effective multilateral rules and enforcement mechanisms has forced us to resort to section 301, we look forward to the day when such actions will be unnecessary.

Finally, I want to announce today a separate Administration initiative with Japan. I have directed the Secretaries of State and Treasury and the U.S. Trade Representative to form a high-level committee to include Commerce, Labor and other interested agencies to propose negotiations with Japan on structural adjustment matters. Such matters include structural impediments to trade, balance-of-payments adjustment, and such issues as bidrigging, 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 section 301, which appropriately deals with the investigation and resolution of particular unfair trade practices.