Report on Economic Effects of Significant US Import Restraints released
The U.S. International Trade Commission announces the release of Economic Effects of Significant U.S. Import Restraints (Sixth Update).
The U.S. International Trade Commission's latest update in this series of reports presents results on the economic effects on the U.S. economy of removing significant U.S. import restraints in manufacturing and agricultural products.
The report estimates changes in U.S. welfare, output, employment, and trade that would result from the unilateral elimination of significant import restraints, specifically U.S. tariffs and tariff-rate quotas on certain agricultural products, textiles and apparel, and other manufactured products.
The Commission estimates that U.S. economic welfare, as defined by total public and private consumption, would increase by about $4.6 billion annually by 2013 if all significant restraints quantified in this report were unilaterally removed. Exports would expand by $5.5 billion and imports by $13.1 billion. These changes would result from removing tariffs and tariff rate quotas (TRQs) in the following sectors: sugar, ethyl alcohol, canned tuna, dairy products, tobacco, textiles and apparel, and other manufacturing sectors.
Although the weighted-average U.S. tariff on all goods fell to an historic low of about 1.3 percent in 2007, many restraints on trade remain.
Liberalization was considered in each sector with significant restraints to identify the economic effects, including the welfare effects, and to estimate the upstream and downstream effects. A summary of the key results for each sector is provided below.
Liberalization of the textile and apparel subsectors increases welfare by approximately $2.3 billion. Liberalization causes declines from 10–11 percent in domestic shipments and employment in yarn, thread, and fabric and apparel. Exports, production, and employment in apparel (cut pieces), yarn, thread, knit fabric, and broadwoven fabric decline considerably as a result of liberalization, which includes elimination of rule-of-origin-based requirements for U.S. inputs.
Domestic prices of these goods also decrease, leading to increased U.S. competitiveness in the global economy and a slight mitigation of the decline in U.S. exports caused by the elimination of rule-of-origin requirements. Effects on the textile products category are smaller.
During the nearly 20 years since the USITC began these studies, the weighted-average tariff on total U.S. imports fell from 3.4 percent in 1989 to approximately 1.3 percent in 2007; many nontariff measures have been eliminated, particularly in textiles and apparel; and trade (imports plus exports) as a share of GDP increased from 15 percent to 23 percent.
These changes largely resulted from trade liberalization over this period and over the past 75 years. In addition to updating the analysis of significant import restraints, this report includes a review of this recent history of U.S. trade policy and its effects on the U.S. economy. The principal conclusion of this update is that annual welfare in the United States, defined as total private and public consumption, would increase by $4.6 billion in 2013 if the significant restraints on U.S. imports were removed, according to estimates in this report.
Click here to read more details on report
U.S. International Trade Commission