ITC Biennial Report on Economic Effects of Significant U.S. Import Restraints
The International Trade Commission (ITC) has issued a report entitled The Economic Effects of Significant U.S. Import Restraints, the fourth update in a series of biennial reports to the U.S. Trade Representative (USTR) concerning Investigation No. 332-325.
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According to the ITC, the purpose of this investigation is to assess the impact of significant U.S. import restraints (including tariffs) on U.S. firms, workers, and consumers and on the net economic welfare of the U.S.
Significant U.S. import restraints (including tariffs) examined in this report include (based on 2002 data):
Food and agriculture - tariffs and tariff-rate quotas (TRQs) on food and agricultural products including beef, canned tuna, cotton, dairy products, peanuts, sugar and sugar-containing products (SCPs), tobacco and tobacco products;
Textiles and apparel - tariffs as well as quotas on certain textiles and apparel pursuant to the Uruguay Round Agreement on Textiles and Clothing (ATC) and bilateral textile agreements with non-World Trade Organization (WTO) member countries. (The ITC notes that in accordance with the ATC, all quotas on textile and apparel imports will be removed on January 1, 2005.);
Merchandise goods - tariffs for a number of merchandise goods, including footwear and leather products; glass and glass products; watches, clocks, watch cases and parts; ball and roller bearings; ceramic wall and floor tile; table and kitchenware; costume jewelry; pens, mechanical pencils, and parts; and cutlery and handtools.
(See the ITC's report for other U.S. import restraints that are discussed, such as Buy America provisions, the Jones Act, etc.)
Elimination of Trade Barriers Would Result in $14 Billion Welfare Gain for U.S.
The ITC states that if all of the quantifiable trade barriers considered in this report had been simultaneously eliminated (based on their 2002 levels), the result would have been equivalent to an approximate welfare gain of $14 billion to the U.S. economy, which represents less than 0.1% of GDP.
Consistent with previous updates of this report, the ITC states that the largest effect would be in the individual liberalization of textiles and apparel, which is estimated to result in an economywide welfare gain of almost $12 billion, assuming that both identified tariffs and quotas were removed simultaneously.
Among other sectors, liberalization of the sugar sector would be expected to lead to a $1.1 billion economywide welfare gain, while the removal of the high tariffs on footwear and a number of leather products would generate a $720 million economywide gain.
(See ITT's Online Archives or 07/11/02 news, 02071125, for BP summary of the 2002 report.)
ITC report (Investigation No. 332-325, Publication 3701, dated June 2004) available ftp://ftp.usitc.gov/pub/reports/studies/pub3701.pdf