The just-released 2014 Annual Report of the President of the United States on the Trade Agreements Program outlines U.S. Government efforts to address so-called “localization barriers to trade” imposed by America’s trading partners. According to the Report, these are “measures designed to protect, favor, or stimulate domestic industries, service providers, and/or intellectual property (IP) at the expense of goods, services, or IP from other countries". Such measures can constitute barriers to trade, even if they are consistent with WTO rules.
The Report sets out examples of localization barriers, which include the following:
- Local content requirements, i.e., requirements to purchase domestically manufactured goods or domestically supplied services;
- Subsidies or other preferences that are only provided if producers use: local goods; service providers that are owned locally; or intellectual property that is owned or developed locally or is first registered in that country;
- Requirements to provide services using local facilities or infrastructure;
- Measures to force the transfer of technology or intellectual property;
- Requirements to comply with country- or region-specific or design-based standards that create unnecessary obstacles to trade; and
- Requirements to conduct or carry out duplicative conformity assessment procedures in-country, without a justification.