Remedies: The Trade Enforcement Digest, Issue #4

Remedies: The Trade Enforcement Digest, Issue #4

Welcome to
Remedies: The Trade Enforcement Digest,
a monthly newsletter brought to you by the Alliance for Trade Enforcement (AFTE).

AFTE is a coalition of trade associations and business groups that advocates for protecting American businesses and workers by enforcing U.S. trade agreements.

Alliance Announcements

  • On April 29, AFTE released a statement on USTR’s 2022 Special 301 Report on Intellectual Property Protection. AFTE was pleased to see the report highlight several IP violations it flagged in earlier comments. However, the Alliance noted that USTR’s continued support for the WTO TRIPS waiver and broader lack of action to strengthen and protect American IP undermine the commitments it outlined in this year’s Special 301 and point to the need for concrete action. You can read the full statement here.

  • On April 11, AFTE sent comments to the U.S. Trade Representative and Department of Commerce regarding the Indo-Pacific Economic Framework (IPEF). AFTE supports the Biden Administration’s efforts to demonstrate economic and diplomatic leadership in the Indo-Pacific region and encourages the administration to include market access provisions and binding, enforceable commitments in each of the four IPEF pillars. You can read AFTE’s letters to USTR here and the Department of Commerce here.

  • Also on April 11, AFTE Executive Director Brian Pomper was quoted in a Bloomberg Law story on the unintentional hurdles for creators imposed by a Mexican law intended to protect the cultural heritage of indigenous and Afro-Mexican communities. You can read the full article here.

In the News

  • Senator Marsha Blackburn, on behalf of herself and seven co-sponsors, introduced legislation to prohibit the President from negotiating or concluding any withdrawal, suspension, waiver, or modification to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) without explicit authorization from Congress. If passed, the legislation would likely prevent President Biden from agreeing to suspend IP protections for Covid-19 vaccines under TRIPS. The bill is titled the No Free TRIPS Act. (U.S. Senate, 4/26)

  • The Senate is expected to convene a conference committee in the coming weeks to begin the process of reconciling the America COMPETES Act (passed by the House in February 2022) and the U.S. Innovation and Competition Act (passed by the Senate in June 2021). Both bills aim to strengthen U.S. manufacturing and trade, but the two differ significantly on a wide range of trade provisions. (Washington Post, 4/25)

  • U.S. Trade Representative Katherine Tai “clarified” and “corrected” previous reports that the United States, European Union, South Africa, and India reached a compromise on the proposed TRIPS waiver. She told reporters that the WTO members have not come to an agreement on whether to waive global intellectual property rights for Covid-19 vaccines. (Law360, 4/21)

  • Mexican lawmakers voted against President Andrés Manuel López Obrador’s plan to consolidate state control of the energy sector, citing the plan’s harmful effects on investments and international obligations like the USMCA. However, Mexico’s Congress passed AMLO’s new bill to nationalize the lithium industry. (Reuters, 4/18) (Reuters, 4/27)

  • The leaders of the Association of Southeast Asian Nations (ASEAN) will head to Washington, D.C. in mid-May for a summit hosted by President Joe Biden. The meeting could serve as an opportunity to expand Southeast Asian market access for U.S. exporters and launch IPEF negotiations. (Reuters, 4/16)

  • The U.S. Chamber of Commerce issued a report finding that U.S. industrial production rose by two-thirds in the past 30 years in inflation-adjusted terms. They argue that smart trade policies can benefit manufacturers and increase these gains. (U.S. Chamber of Commerce, 4/6)

Spotlight on Enforcement

(If you only focus on one enforcement issue this month, it should be this one.)

American businesses have always faced challenges navigating India’s legal and regulatory environment due to a complicated patchwork of regulations, a frequent lack of transparency and good regulatory practice, and the Indian government’s tendency to favor local companies. But the regulatory environment in India has become increasingly problematic for foreign firms since the start of the Covid-19 pandemic, creating clear barriers to trade that are harming businesses and workers.

For example, the Indian government enacted a series of measures beginning in 2020 that have curbed exports of U.S.-made products. One such measure, the Toys Quality Control Order 2020, requires Indian regulators to conduct in-person inspections of foreign factories wishing to export their products to India. But India stopped allowing inspectors to travel abroad, citing pandemic concerns, which made in-person inspections impossible. And unlike other countries, India has refused to allow virtual inspections. This decision has kept many manufacturers in the United States from meeting India’s quality control requirements and therefore prevented them from entering India’s toy market.

In addition, many manufacturers have faced growing delays in product approvals by Indian government agencies. India instituted new requirements for local testing and certification that differ from international standards. New draft rules on chemical management are overly cautious, and thus burden chemical manufacturers with notification, registration, labeling, and packaging requirements that are not required of India’s domestic manufacturers.

Similarly, opaque regulatory approaches and local data requirements for biotechnology and medical devices delay approvals for U.S. products. These requirements can also force U.S. pharmaceutical companies to launch costly, duplicative clinical trials, thereby deterring some firms from entering the Indian market and subsequently hurting manufacturers in the United States.

India’s regulatory practices continue to harm U.S. exporters and market access in India. In fact, manufacturers in the United States exported fewer products to India in 2021 than to countries such as the Netherlands and South Korea, which have much smaller economies.

AFTE is hopeful that India will change course and adhere to good regulatory practices — and address key trade barriers facing U.S. manufacturers. Just last fall, the Indian and U.S. governments relaunched the U.S.-India Trade Policy Forum (TPF) to “develop an ambitious, shared vision for the future of the trade relationship.” The two governments agreed on the benefits of “transparency in the rulemaking process” and shared their commitment to exploring “ways to enhance good regulatory practices.” Ending discriminatory regulatory practices and removing technical barriers to trade would foster a robust, mutually-beneficial trading relationship in the future.