Trump Administration Seeks Public Comment and Hearing on U.S. Trade Deficits
April 28, 2017

On March 31, 2017, President Trump signed Executive Order 13786 (“EO”) directing the U.S. Department of Commerce (“Commerce”) and United States Trade Representative (“USTR”) to, within 90 days, “prepare and submit to the President and Omnibus Report on Significant Trade Deficits.”  To aid in preparing the report, the EO also provides that Commerce and USTR “may hold public meetings and seek comments” from relevant stakeholders.

On April 17, 2017, Commerce and the USTR announced their intention to hold a public hearing and seek written comment and analysis concerning report. The public hearing will be held on May 18, 2017.  Written comments, written notification of intent to testify at the public hearing, and a summary of the testimony, all must be submitted by May 10, 2017.

TOPICS FOR WRITTEN DISCUSSION AND TESTIMONY

On April 17, 2017, in a notice published in the Federal Register, Commerce and the USTR announced that the countries which the United States had a “significant” trade deficit in goods in 2016 were Canada, China, the European Union, India, Indonesia, Japan, Korea, Malaysia, Mexico, Switzerland, Taiwan, Thailand, and Vietnam.  For each of these identified countries, the agencies are seeking written comment and testimony from the public concerning the EO’s directive to:

  1. Assess the major causes of the trade deficit, including, as applicable, differential tariffs, non-tariff barriers, injurious dumping, injurious government subsidization, intellectual property theft, forced technology transfer, denial of worker rights and labor standards, and any other form of discrimination against the commerce of the United States or other factors contributing to the deficit;

  2. Assess whether the trading partner is, directly or indirectly, imposing unequal burdens on, or unfairly discriminating in fact against, the commerce of the United States by law, regulation, or practice and thereby placing the commerce of the United States at an unfair disadvantage;

  3. Assess the effects of the trade relationship on the production capacity and strength of the manufacturing and defense industrial bases of the United States;

  4. Assess the effects of the trade relationship on employment and wage growth in the United States; and

  5. Identify imports and trade practices that may be impairing the national security of the United States.

Commerce and the USTR are seeking also seeking written comments and testimony concerning the following additional topics:

  1. Which bilateral trade deficits are structural or cyclical rather than mercantilist-driven?

  2. To what extent are non-market economies operating within a market based system create trade imbalances?

  3. To what extent does chronic industrial overcapacity resulting from government subsidies affect the U.S. trade deficit?

  4. Have free trade agreements contributed to bilateral trade deficits and how?

  5. To what extent have weak enforcement and dispute resolution mechanisms inadequately addressed trade issues that result in trade deficits?

  6. Are there any other factors related to trade deficits that the report should consider?

Specifically, with respect to manufacturing and the defense industry, Commerce and USTR are seeking comment on how the following requirements or practices of trading partners have affected opportunities for increased U.S. exports, profitability, and employment:

  1. Mandated coproduction and licensed production;

  2. Mandated subcontracting; counter trade;

  3. Required technology transfer;

  4. Required collaborative research and development;

  5. Mandated joint ventures and intellectual property transfer; and

  6. Required capital investments.

KEY DATES

Written comments must be submitted electronically via www.regulations.gov at docket number DOC 2017-0003 by Wednesday, May 10, 2017 at 11:59 p.m. Eastern Daylight Time (“EDT”).

Requests to appear at the public hearing must also be submitted electronically via www.regulations.gov at docket number DOC 2017-0003 by Wednesday, May 10, 2017 at 11:59 p.m. EDT and must be accompanied by a summary of the proposed testimony.

The public hearing will be held on Thursday, May 18, 2017 at 9:30 a.m. EDT at the Department of Commerce in Washington, D.C. 

NEXT STEPS

Should you wish to submit written comments and/or appear at the public hearing, please contact Joshua Morey.