Brussels, 08/10/2001 (Agence Europe) - Yet again this year, the unilateral and extraterritorial provisions of American legislation, as well as the excessively used principle of "national security" and the multi-purpose incitement to "buy American", are targeted by the European Commission. Its Report 2001, published on Monday, lists a hundred or so obstacles to trade and investment in the United States, including tax measures with, yet and again, the Foreign Sales Corporation (FSC) scheme which has been condemned twice in Geneva, as well as the interminable wait for a genuine recognition on the ground of the equivalence of health and plant health rules and restrictions that continue on the satellite communications market.
According to the Commission, "the best way to eliminate these obstacles to trade and continue to defend the rights of European companies is to pursue bilateral negotiations with the United States", but, "for lack of sufficient flexibility, it will have recourse to the more formal procedures of dispute settlement to achieve legitimate aims", the Commission spokesperson stressed. The voluminous catalogue of American restrictions that the Community Executive compiles each year opens with the usual and brief reminder of the importance of these trade relations, of a scale to date unequaled and that nevertheless procures a trade surplus for the Union, of close to 25 billion euro, whereas the United States has twice as much a deficit (see EUROPE of 7 April). "The fact remains that a considerable number of impediments, ranging from more traditional tariff and non-tariff barriers, to differences in legal and regulatory systems, or due to the absence or limitation of internationally agreed rules and disciplines, still need to be tackled", says the Commission before listing them, one by one, over the 57 pages - or six less than last year - that compose its report.
On a particularly incisive tone, the Commission naturally returns to the unilateralism and extraterritoriality that the United States continues to resort to, despite arrangements made at bilateral level (like that of London concerning the Helms-Burton Act for Cuba) and the many disputes submitted for arbitration before the World Trade Organisation (WTO). "The Union is against the extraterritorial provisions of some of American legislation which impede international trade and investments, trying to regulate trade with the EU and its investments in third countries", it protests, recalling that it may still reactivate the multilateral procedure over the provisions against investments in Cuba and that some European firms may still be sanctioned. It also states that it expects of the Bush Administration that it "takes the appropriate measures to lift the threat of sanctions" linked to the more recent non-proliferation legislation in Iran (INPA) and cites "several other examples or variations of American extraterritoriality", notably health and environmental embargoes (BSE, foot-and-mouth, non-recognition of the health statutes of the Union and its Member States, etc.), certain export controls and sub-federal legislation on selective purchase (practically baring the way for companies whose trading activities are linked to certain third countries). Other than that, the tendency towards unilateralism that remains in the USA is of tangible concern to the Commission. "The approach places doubt on the American backing for the multilateral system of rules for settling problems and may also give rise to bilateral agreements containing elements of discrimination", it states, while noting that the Union is on the "priority surveillance list this year" for trading partners that may be subjected to such types of measures, due to the protection it procures to geographical indications of farms and food products. "The trading partners have no choice other than that of negotiating on the basis of an agenda established by the United States, in the light of its own judgements, perceptions, timetables and, whence, American legislation", it waxes indignant.
A large chapter is devoted to restrictions to access to American public procurement, practically sealed in certain cases (public transport, airport improvements, space launch services, etc.), by different forms of incentives to "Buy American" which prevail, and to which are added other infrastructure programmes financed by the Federal State, the "set-aside" programmes in favour of small companies ("set-aside" public contracts reserved for them and which are exempted from the application of the Multilateral Agreement on Public Procurement (GPA) and sub-federal selective purchasing legislation). The Commission also cites the principle of national security, in relation with this field (among others). This concept, specific to the United States' trade policy, has still not been clearly defined, which gives rise to "much too broad an interpretation" and "excessive use as form of disguised protectionism".
Many tax measures are also singled out by the Commission, including the FSC which remains a subject of "major" concern, whereas it is watching closely the third attempt at rectifying this scheme of tax exoneration, already condemned twice in Geneva as illegal subsidy for exports.
The Commission also queries the calculation method for what is due at federal level, challenging the global unitary taxes imposed by the state which it sees as incompatible with the US obligations under the taxation agreements signed with third countries.
The report condemns the tariff peaks and other tariff obstacles to the import of food, textiles, footwear, leatherware, jewellery, ceramics, glassware, lorries, etc; non-tariff barriers ("excessive" invoice requirements for exporters, user fees and the "discriminatory" harbour maintenance tax) and technical requirements (a series of post-border obstacles for companies not established in the United States); the 1916 Antidumping Act (a revocation will be passed by the end of the year on the WTO's request) and countervailing duties on European steel manufacturers (being considered by a WTO panel in Geneva); the scale of indirect aid to the US aeronautical industry (another "area for multilateral action" where progress "had to be made"); shipbuilding (where the OECD Shipbuilding Agreement signed in December 1994 has still not been ratified, along with aid, protectionist legislation and fiscal policy); conditional national treatment, particularly for Research & Development; the gulf between US intellectual property rights and international agreements (appellations of origin and geographical indications, copyright, trademarks and patents, and so on); lack of transparency and absence of open access to the professional services market, which is generally regulated at State level; "important" barriers to European and other foreign-owned firms seeking access to the US communications services market (investment restrictions, lengthy and burdensome proceedings and de facto reciprocity-based procedures) particularly for satellite services where the situation is "not in line with the market access policy advocated by the US; indeed it provides a competitive advantage tot he significant number of US companies that already have access to the EU market"; and restrictions on access to air transport (preference for US companies and other protectionist measures) and shipping (where the Jones Act prohibits foreign-built vessels from engaging in coastwide trade involving a US port).
The full report is available at website: http: //europa.eu.int/comm/trade/pdf/usrbt2001.pdf or http: //europa.eu.int/comm/external_relations/us/intro/index.htm.