ITC Issues Report on U.S. Import Restraints, Says Economic Welfare Could Rise by $5 Billion if Restraints Removed
The International Trade Commission has issued a report, entitled The Economic Effects of Significant U.S. Import Restraints, which is the sixth update in a series of biennial reports to the U.S. Trade Representative.
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Among other things, the report estimates changes in U.S. trade that would result from the unilateral elimination of significant import restraints, specifically U.S. tariffs and tariff-rate quotas on certain agricultural products, textiles and apparel, and other manufactured products.
Imports and Exports Would Expand if Restraints Were Unilaterally Removed
According to ITC, U.S. economic welfare could increase by about $4.6 billion annually by 2013 if all significant restraints quantified in its report were unilaterally removed. Exports would expand by $5.5 billion and imports by $13.1 billion. Such a unilateral move would likely decrease domestic production and employment.
ITC notes that while its report analyzes the effects of the liberalization of significant U.S. import restraints, it does not address the effects of simultaneous liberalization of significant trade barriers in other countries. In many circumstances, the removal of import restraints maintained by U.S. trading partners would likely boost output and employment in affected U.S. industries.
Significant Import Restraints Imposed on Various Sectors
The significant U.S. import restraints that ITC examines in this report include (according to 2007 data):
Sugar - tariff rate quotas (TRQs) for imports of raw cane and refined sugar, blended sugar syrups, and sugar containing products for World Trade Organization member countries, and for other countries under various free trade agreements (FTAs) and preferential trade arrangements (PTAs);
Ethyl alcohol - drawback provisions that require that ethanol be contained in any product that is being used to claim duty drawbacks on imports of fuel ethanol;
Dairy products - TRQs and duties on dry, condensed, and evaporated dairy products, and on butter, cheese, ice cream, and fluid milk, and federal, state, and local laws that maintain price and production supports;
Tobacco - ad valorem equivalent (AVE) tariffs and TRQs on tobacco and tobacco products; and
Textiles and apparel - tariffs on textiles and apparel that increase with each stage of manufacturing, i.e. higher duty rates on apparel than on yarn or fabric.
(ITC notes that the sectors with the highest combined tariff levels and export tax equivalents were butter, sugar, dry dairy products, and condensed and evaporated dairy products.)
ITC report (Inv.No. 332-325, dated August 2009) available at http://www.usitc.gov/publications/332/pub4094.pdf
ITC press release (09-072, dated 09/30/09) available at http://www.usitc.gov/press_room/news_release/2009/er0930gg1.htm