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US 2025 National Trade Estimate Report by USTR Foreign Trade Barriers

Ever wondered how foreign trade barriers impact US exports & business? Explore the 2025 USTR report findings on global obstacles. We break down key issues like tariffs, IP theft, digital restrictions, and government procurement challenges affecting market access. Understand the global trade landscape and what it means for American economic interests and fair competition in 2025 and beyond.

Frequently Asked Questions (FAQ)

  1. What are TBT and SPS barriers? Provide examples. Technical Barriers to Trade (TBT) are regulations/standards affecting goods trade (e.g., Brunei’s Halal certification requiring approved foreign facilities). Sanitary and Phytosanitary (SPS) measures protect human, animal, or plant life/health from food/animal/plant-related risks (e.g., Ghana’s meat fat content limits or Egypt’s ban on US seed potatoes).

  2. How do import policies create trade barriers? Illustrate. Import policies like tariffs (e.g., Philippines’ high auto tariffs), taxes, bans/restrictions (e.g., Russia’s food bans), and licensing regimes (e.g., Ecuador’s lengthy, non-transparent process for food imports) create barriers by increasing costs, limiting entry, or adding bureaucracy.

  3. What government procurement barriers are mentioned? Barriers include opaque tendering, domestic supplier preferences (e.g., Bolivia’s “Buy Bolivian” program margins), and local partnership requirements. Côte d’Ivoire’s opaque contract awards and Ghana’s preference margins for domestic suppliers are other examples.

  4. How does inadequate IP protection challenge trade? Provide examples. Weak Intellectual Property (IP) protection/enforcement enables piracy and counterfeiting, harming legitimate trade. Examples include significant challenges in Bolivia (Watch List status), widespread counterfeit goods in Côte d’Ivoire, and concerns over online piracy/counterfeits in the Philippines (leading to a market listed as notorious).

  5. What services barriers are identified and how do they restrict access? Services barriers limit foreign providers. Examples include professional restrictions (Côte d’Ivoire barring most foreign accountants), ownership limits (Egypt in courier services; Ethiopia limiting foreign bank ownership), and mandatory local service use (Kenya’s previous local marine cargo insurance requirement).

  6. How are electronic commerce and digital trade affected by barriers? Digital trade faces barriers like data localization mandates (Hungary for government data; potentially India), restricted cross-border data transfers (Egypt’s licensing; Pakistan’s draft act), and internet censorship/blocking (Pakistan).

  7. What role do State-Owned Enterprises (SOEs) play as barriers? State-Owned Enterprises (SOEs) create barriers via preferential treatment (access to credit/contracts) and subsidies, causing unfair competition. Examples include Bolivian SOEs dominating key sectors with preferences and Nigerian/Pakistani state insurers having exclusive rights for public sector business.

  8. Based on Appendix II data, who are the top US trading partners? For goods (2023-24), Canada and Mexico are the top US export/import partners, followed by China. For services (2022-23), the UK is the top export destination (followed by Canada), while Canada is the top import source (followed by the UK). Canada and the UK are consistently top partners overall.

What is the problem?

The primary problem highlighted in the sources is the existence of numerous and diverse trade barriers imposed by various countries that hinder U.S. exports and investments. These barriers take many forms and affect a wide range of sectors.

Here are some key categories of problems identified in the sources:

  • Government Procurement Barriers: Many countries have policies that favour domestic products or suppliers in government procurement. For example, Algeria requires the purchase of domestically manufactured products whenever available, and Bolivia’s “Buy Bolivian” program gives preference margins to domestic goods. Concerns also exist regarding a lack of transparency in tendering processes, as noted in Bolivia and the Dominican Republic, and the use of criteria like “lowest cost” as the primary determinant for awarding contracts, as seen in Lithuania and Portugal. Some countries also have requirements for foreign companies to partner with local entities. Offset requirements in countries like Israel and India can also pose challenges for U.S. suppliers.
  • Intellectual Property Protection Issues: Several countries, including Algeria, Guatemala, Honduras, and Pakistan, remain on the Watch List due to concerns about IP protection and enforcement. These concerns include inadequate legal frameworks, limited enforcement activities against counterfeiting and piracy, and issues with online and signal piracy.
  • Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary (SPS) Barriers: These are prevalent across many of the reported countries. Examples include:
    • Standards and Regulations: Some countries have technical regulations that deviate from international standards without providing additional safety measures, such as Kenya’s Pre-Export Verification of Conformity (PVoC) program and Saudi Arabia’s increasing preference for ISO and IEC standards. The non-recognition of U.S. standards, like Federal Motor Vehicle Safety Standards (FMVSS) in Egypt and Japan, also creates significant barriers.
    • Testing and Certification: Mandatory in-country testing and certification requirements, as seen in India and Vietnam for electronics and ICT products, can be burdensome and create delays. Conformity assessment procedures that lack transparency or are discriminatory, like those in the Dominican Republic for steel rebar and Indonesia for toys, are also problematic.
    • Labeling Requirements: New or revised labeling requirements, such as in Canada (Quebec’s Bill 96), Colombia (cosmetics), Pakistan (halal), Taiwan, and Vietnam, can create challenges for U.S. exporters due to uncertainty, inconsistency, and the need for translations or specific information.
    • Import Licensing and Permits: Complex and burdensome import licensing regimes, particularly for agricultural products, are noted in countries like the Dominican Republic, Honduras, Indonesia, and the Philippines. These can lead to delays, restrictions on import quantities, and increased costs.
    • Halal Requirements: The expansion and evolving nature of halal certification requirements in countries like Egypt, Kuwait, Qatar, and Saudi Arabia create uncertainty and can limit the ability of U.S. companies to export.
    • Agricultural Biotechnology Restrictions: Several countries have restrictions or bans on genetically engineered (GE) products, such as Guatemala (stalled approvals), Mexico (ban on GE corn for certain uses), and Taiwan (ban in school meals), raising concerns about the scientific basis and impact on trade.
  • Investment Barriers: Various regulations limit foreign investment in specific sectors. These include ownership restrictions (e.g., Algeria’s 51/49 rule, Malaysia’s limits in financial services and broadcasting, Türkiye’s limits in broadcasting and real estate), requirements for local partnerships, and bureaucratic hurdles.
  • Customs and Trade Facilitation Issues: Inconsistent customs valuation, delays in inspections, arbitrary fines, and burdensome documentation requirements are reported in countries like Indonesia, Nicaragua, Pakistan, and the Philippines. The implementation of new customs systems, such as Canada’s CARM, can also initially cause disruptions.
  • Digital Trade Barriers: Restrictions on online payment processors, localization requirements for e-commerce platforms, and government control over internet traffic can hinder digital trade.
  • Other Non-Tariff Measures: These include issues like export restrictions (e.g., Türkiye’s bans on sunflower and olive oil), state trading practices (e.g., Indonesia’s control over certain agricultural imports), and a lack of transparency in regulatory processes.

Overall, the sources paint a picture of a complex global trade landscape where U.S. exporters and investors face a multitude of regulatory and procedural hurdles that impede their access to foreign markets.

What is the solution?

Drawing upon the information in the sources, there isn’t a single, comprehensive “solution” presented to the multitude of trade barriers. Instead, the sources highlight various ongoing efforts and strategies employed by the U.S. Government and stakeholders to address specific issues in individual countries. These efforts suggest a multi-faceted approach rather than a singular solution.

Here are some key strategies and actions mentioned in the sources that aim to alleviate trade barriers:

  • Bilateral and Multilateral Engagement and Negotiations: The U.S. Government frequently engages in discussions and negotiations with foreign governments to address specific barriers. This includes:

    • Trade Agreements: Utilizing existing trade agreements like the USMCA, CAFTA-DR, and FTAs with Bahrain and Oman to raise concerns and seek improvements in areas like government procurement, intellectual property, and sanitary and phytosanitary measures. The USMCA, for instance, aims to improve Canada’s IP environment and includes commitments to discuss seed regulatory systems.
    • Bilateral Forums: Engaging through forums like the Trade and Investment Framework Agreement (TIFA) with Pakistan and Bangladesh and the Trade Policy Forum (TPF) with India to discuss and resolve trade issues.
    • WTO Mechanisms: Utilizing WTO dispute settlement procedures, as seen in the case against India’s poultry import prohibitions, and raising concerns in WTO committees, such as the Committee on Sanitary and Phytosanitary Measures and the Committee on Technical Barriers to Trade. The U.S. also monitors notifications made to WTO committees, such as Indonesia’s pre-shipment inspection measures and Honduras’s import licensing procedures.
    • Seeking Observer Status and Accession to the GPA: The U.S. encourages countries to become observers to or parties to the WTO Agreement on Government Procurement to promote more transparent procurement practices.

  • Advocacy and Raising Concerns: The U.S. Government and industry stakeholders consistently raise concerns directly with foreign governments about specific problematic regulations and practices. This is evident in numerous instances, such as concerns about Algeria’s 51/49 rule, Dominican Republic’s steel rebar regulations, Japan’s battery certification requirements, Mexico’s GE corn decree, and Nigeria’s foreign exchange repatriation process.

  • Monitoring and Reporting: The USTR’s annual National Trade Estimate Report on Foreign Trade Barriers (from which these excerpts are taken) serves as a key tool for monitoring and reporting on trade barriers. The Special 301 Report specifically monitors intellectual property protection and enforcement, leading to countries being placed on Watch Lists or Priority Watch Lists. The Notorious Markets List also highlights specific locations engaging in counterfeiting and piracy. This monitoring helps to identify and prioritise issues for further action.

  • Technical Assistance and Capacity Building: The U.S. provides technical assistance to some countries to help them improve their regulatory frameworks and enforcement capabilities, particularly in areas like anti-corruption, intellectual property, and customs procedures.

  • Encouraging Regulatory Reform: Through engagement and pressure, the U.S. seeks to encourage foreign governments to reform trade-restrictive regulations and implement more transparent and non-discriminatory policies. Examples include the ongoing discussions with Canada on its variety registration system, the Dominican Republic’s efforts to improve its procurement system, and Pakistan’s amendments to its Biosafety Rules.

  • Addressing Specific Issues Sector by Sector: Many of the concerns and efforts are focused on specific sectors, such as agriculture (e.g., potatoes in Costa Rica, GE products in China and Mexico, dairy in India), pharmaceuticals (e.g., pricing and reimbursement in EU member states, halal certification in Indonesia), and digital trade (e.g., data localisation in Panama, e-commerce restrictions in Algeria, digital platform regulation in Japan). This sector-specific approach allows for targeted solutions.

It’s important to note that the sources often highlight ongoing challenges and the need for continued engagement, suggesting that resolving these trade barriers is often a protracted process requiring sustained effort. There is no single quick fix, but rather a continuous cycle of identification, advocacy, negotiation, and monitoring.

Resources & Further Watching

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