Highlights from USTR's 2011 Technical Barriers to Trade Report

(Technical barriers to trade (TBT) are foreign barriers in the form of product standards, technical regulations and testing, certification, and other procedures involved in determining whether products conform to standards and technical regulations.)

Trends and Continued Issues of Foreign Trade Barriers

The report includes a discussion of trends that appear across various U.S. trading partners’ markets, as well as standards-related systemic issues, that can significantly affect the ability of U.S. businesses and producers to access foreign markets. These issues include the following (partial list):

Goods with cryptographic capabilities. A number of U.S. trading partners, including China, India, and Russia, have adopted problematic measures that block or restrict U.S. exports of products with cryptographic capabilities for commercial use. As an increasing number of products for commercial use are being designed with cryptographic capabilities to protect data integrity and confidentiality, these measures have the potential to significantly impede trade in a wide range of industrial products and systems.

Biotech labeling. Countries that impose mandatory biotech labeling requirements for food products that contain or are derived from biotechnology impede or completely block U.S. exports of food products. Some of the countries imposing such requirements include Australia, Brazil, China, EU Member States, Indonesia, Japan, Korea, Malaysia, New Zealand, Peru, Russia, Saudi Arabia, Turkey, Ukraine, Thailand, Taiwan, and Vietnam. Biotechnology crops represent a significant portion of U.S. agricultural exports, totaling $98.6 billion in 2009.

Conformity assessment bodies. The U.S. is devoting substantial resources to addressing matters of conformity assessment barriers on a country-specific and systemic basis. For example, the Department of Commerce has worked to resolve practical problems facing U.S. industry with respect to compliance with China’s compulsory certification requirements. U.S. officials have urged Korea to further liberalize its conformity assessment regime, using recent successes with lithium-ion batteries and energy efficiency as a template. U.S. officials have also redoubled their efforts to target conformity assessment barriers in the context of the TPP negotiations.

Distilled spirits regulation. Barriers for distilled spirits have created significant standards-related trade problems for U.S. exporters. For example, the EU maintains a three-year minimum aging requirement for whiskey, prohibiting U.S. whiskey products that are aged for a shorter period from being sold or from being labeled as “whiskey” in the EU market. Colombia also is proposing certain quality and identity requirements for brandy, vodka, gin, rum, and whiskey. Vietnam has also proposed setting maximum limits on aldehydes in distilled spirits. Labeling requirements lacking a valid scientific basis include requirements in Brazil, Thailand, and Kenya.

Organic product standards. Foreign regulations governing organic products can make exporting U.S. organic products a costly and burdensome endeavor. Japan’s zero tolerance policy for pesticide and herbicide residues on organic products limits U.S. organics exports to Japan. Similarly, Korea’s zero tolerance policy for adventitious presence of biotechnology content in organic products limits U.S. organics exports. If Korea does not adopt regulations allowing it to negotiate such policy, U.S. organics exports to Korea could be further restricted beginning in January 2013.

Halal products. Governments have established standards for the handling, transportation, labeling, certification, etc. of halal products that vary significantly from the Codex General Guidelines for the use of the term “halal”, creating difficulties for the to export halal products. While some governments have attempted to frame their halal rules as a food safety issue, the U.S. has consistently viewed halal as a process/quality standard with no inherent food safety component. The U.S. has been successful in many cases when raising halal implementation issues with the WTO TBT Committee.

Voluntary measures. U.S. trading partners have adopted measures that are technically voluntary, but which are applied in a manner that makes compliance mandatory. As a result, these policies are not governed by the strong disciplines on mandatory product standards and conformity assessment procedures included in the TBT Agreement. One way countries have avoided their obligations is by developing voluntary standards through procedures that exclude foreign stakeholders (a practice not prohibited under the agreement) and then later turning these voluntary standards into requirements (where it is prohibited).

Administration’s International TBT Engagements in 2010

The report provides an overview of U.S. engagements on standards-related measures in international, regional, and bilateral fora. The following are selected highlights of the Administration's TBT engagements in 2010:

APEC countries. As the 2011 APEC host, the U.S. will seek agreement among APEC members on steps that can be taken to strengthen implementation of good regulatory practices, including an assessment of the costs and benefits of regulation and an assessment of non-regulatory alternatives. In 2010, the U.S. led efforts among APEC economies to align their regulatory approaches to energy efficiency, toy safety, and food safety, which laid the foundation for countries to work on preventing technical barriers in new sectors such as commercial green buildings, solar technologies, and Smart Grid. (See ITT's Online Archives or 03/15/11 news, 11031528, for BP summary.)

EU, Mexico, Canada regulatory cooperation. The Administration's successes in heading off unwarranted technical barriers to U.S. exports include: (i) launching an initiative with the EU under the bilateral Transatlantic Economic Council (TEC) to develop joint principles and best practices for preventing unintended barriers to U.S.-EU trade; (ii) directing with Mexico, the creation of a bilateral High-Level Regulatory Cooperation Council to improve cooperation on regulatory matters; and (iii) called for the establishment of a U.S.-Canada Regulatory Cooperation Council, with a mandate to enhance bilateral regulatory transparency and coordination. (See ITT's Online Archives or 02/14/11, 12/20/10 and 02/07/11 news, 11021421, 10122030, and 11020729, for BP summaries.)

Indonesian poultry market. Poultry products sold in Indonesia must be certified as halal. In 2009, Indonesia revised its list of recognized halal certifiers, excluding several halal certifiers in the U.S. that Indonesia had previously recognized and thereby preventing U.S. poultry producers from selling their products in Indonesia. In 2011, Indonesian officials agreed to accredit four U.S. poultry certifiers, taking a step towards fully re-opening Indonesia’s market to U.S. poultry.

Mexico nutrition labeling. In 2009, Mexico proposed to amend its nutritional labeling requirements, to require that all food imports be accompanied by a mandatory compliance certificate, indicating that they were labeled in accordance with the new law. In response to U.S. concerns, Mexico clarified that it would not require mandatory certificates of compliance and agreed to delay the implementation of its new law from June 2010 until January 2011. To date, U.S. industry has not reported any disruptions due to the new law. (See ITT's Online Archives or 12/21/11 news, 10102114, for BP summary.)

Specific Country Reports

The report includes country reports that identify and describe specific standards-related trade barriers encountered by U.S. producers. In addition to the trade barriers discussed in the Trends section of the report, other standards-related trade barriers were found in the areas of toys, medical devices, telecommunications, wine, mobile phones, chemicals, industrial products, hazardous substances, cosmetics, motor vehicles, etc.

The areas investigated in the 2011 report include:

(See ITT's Online Archives or 03/31/11 news, 11033122, for BP summary announcing the availability of USTR's TBT, phytosanitary, and national trade estimate reports.

See ITT's Online Archives or 04/01/11 news, 11040123, for BP summary of USTR's 2011 report on sanitary and phytosanitary barriers to trade.)

2011 Report on Technical Barriers to Trade is available here.

Fact sheet on the TBT Report is available here.