Section 301 Action Background
6. Section 301 action is retaliatory action against foreign practices found to be jeopardizing US trade. Under Section 301 of the US Trade Act of 1974, the US Administration is authorized to investigate foreign practices which are unjustifiable, unreasonable or discriminatory and which burden or restrict US commerce, and to retaliate against the offending country's exports to the US unless a satisfactory resolution to the trade dispute is reached within statutory deadlines.
Present Position
7.
In March 1991, the United States Trade Representative (USTR) published its annual National Trade Estimates Reports. These contained a long list of Chinese trade barriers such as high tariffs, import bans and quotas and technical barriers to trade. Consultations on market access were subsequently held with the Chinese. On 30 September, China handed over a formal response to the US on concrete measures to lower its market access barriers. However, the US considered the Chinese response unsatisfactory and on 10 October the USTR formally announced its decision to initiate a Section 301 investigation of China's market access barriers to US imports. The USTR is required to complete investigation within one year and to determine whether actionable practices exist, and what retaliatory action is to be
to be taken within 30 days after the determination, i.e. not later than 10 November 1992.
8.
A total of six rounds of consultations have been held since the initiation of the Section 301 investigation. At the latest round of consultation held on 21-22 May 1992 in Beijing, it was reported that progress was made in three out of the four problem areas: import licensing, tariffs and transparency of trade policy. The round however did not cover the fourth problem area of standards and testing.
9.
The next round of consultations are scheduled to be held on 13 August in Beijing. Meanwhile, the USTR has published on 26 June a notice in the Federal Register requesting public comments on China's market access restrictions and the possible action to rectify the problem in accordance with Section 301 provisions. Presumably this move was intended to exert further pressure on China to make concessions for a satisfactory settlement.
Prison-made goods Background
10. The third major issue straining US-China trade relations is the alleged trade in goods made in prisons or under forced labour contitions. There is increasing evidence that such products are exported to the US, in part at least via Hong Kong, and that individual Hong Kong companies are involved in some of this trade.
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Private notes are available after approval.