THE INFORMATION CONTAINED HEREIN IS FOR THE USE OF AUTHORIZED REPRESENTATIVES OF THE TRANSITION TEAM ONLY. SUBSEQUENT DISCLOSURE OF THIS INFORMATION TO ANY UNAUTHORIZED INDIVIDUAL, INCLUDING UNAUTHORIZED MEMBERS OF THE TRANSITION TEAM, IS STRICTLY PROHIBITED. AGRICULTURAL AFFAIRS Beyond the major cross-cutting trade negotiations, key issues of Congressional interest involve resolving trade barriers in priority US. food and agriculture export markets. Congressional interest is also focused on agriculture policies in other countries, such as dairy supply management in Canada and farm subsidies. Agricultural Affairs work and Congressional interest is driven by priorities identi?ed by agriculture and food manufacturing stakeholders. Barriers to Products of New Technologies The use of advanced U.S. technology by American farmers and ranchers is key to U.S. competitiveness and growth. At least 30 percent of U.S. food and agriculture exports are derived from agricultural biotechnology. Some of our largest export markets maintain regulatory barriers to products derived from agricultural biotechnology or treated with animal drugs and pesticides. Excessive delays in biotech regulatory approvals in China and the EurOpean Union result in market risks, and in some cases bans, for U.S. exports of alfalfa, soybeans and corn. Resolving current barriers, and avoiding barriers to new technologies, requires U.S. leadership on new initiatives to favor science-based, innovation-friendly regulatory approaches worldwide. EU Barriers to U.S. Food and Agriculture The United States has lost signi?cant market share in the EU over the last 20 years, in part due to the steady growth in regulatory restrictions to U.S. food and agriculture products, including related to agricultural biotechnology, animal drugs, pesticides, and pathogen reduction treatments. The United States has been and will continue to work to combat and resolve these barriers. Access to China While China is the second-largest export market for U.S. food and agricultural goods at $20.4 billion in 2015, Chinese farm subsidies, administration of tariff rate quotas, and a range of non?tariff barriers limit access and create market uncertainties. The United States has initiated WTO dispute settlement procedures on Chinese farm subsidies and has requested dispute settlement consultations on its administration of tariff rate quotas. The United States will continue to work to resolve problems with biotech varieties, beef, poultry, dried distiller grains, and proposed new requirements on processed foods. Canada Dairy Policies Canada restricts imports of dairy through supply management. With CETA and TPP providing additional access for imports, Canada is looking to implement new policies, in response to Canadian dairy farmer demands that undermine current U.S. access for dairy products valued at $200 million. THE INFORMATION CONTAINED HEREIN IS FOR THE USE OF AUTHORIZED REPRESENTATIVES OF THE TRANSITION TEAM ONLY. SUBSEQUENT DISCLOSURE OF THIS INFORMATION TO ANY UNAUTHORIZED INDIVIDUAL, INCLUDING UNAUTHORIZED MEMBERS OF THE TRANSITION TEAM. IS STRICTLY PROHIBITED. GENERAL COUNSEL MONITORING AND ENFORCEMENT The Monitoring and Enforcement side of the Of?ce of General Counsel leads efforts and works with other of?ces to monitor and enforce U.S. rights at the WTO and under FTAs. OGC is the lead of?ce on litigation, developing strategies on issues such as China enforcement, including subsidization and market distortion, and defending US. interests in defensive disputes, including trade remedies (to counteract injurious subsidization or dumping) and TBT disputes. China Market Economy Status On December 11, 2016, a provision of China?s WTO Accession Protocol expired. China argues that this requires WTO Members to stop using a non-market economy (NME) methodology in all anti-dumping (AD) proceedings involving China. Consistent with this view, China ?led separate WTO consultations requests with the United States and the EU on December 12, 2016. USTR OGC considers that the use of an NME methodology is WTO?consistent, a view shared by a number of other WTO Members. Steel Aluminum Overcapacity Chinese steel and aluminum overcapacity has led to excess global supply, banning U.S. producers. With our industry and economics experts, as well other interested agencies, OGC is analyzing these issues to determine legal and policy options. Appellate Body In May, the United States blocked the reappointment of an Appellate Body (AB) Member. The United States has been growing increasingly concerned over several years regarding AB reports that address issues not necessary to resolve the speci?c dispute between the parties or that read into WTO rules obligations not negotiated by WTO Members. Gambling Dispute The United States lost a WTO services dispute brought by Antigua and Barbuda regarding US. and state restrictions on online gambling, and the WTO authorized Antigua and Barbuda to take countermeasures, including on IP rights. The United States has successfully negotiated compensation with all interested WTO Members to withdraw the gambling concession from US. WTO commitments, except for Antigua. USTR has been discussing settlement options with Antigua for many years now without success. Antigua recently renewed threats of retaliation against US. IP interests, including US. motion pictures. Beef Hormones Dispute The United States won a WTO dispute against the EU regarding a ban on beef from cattle treated with certain growth-promoting hormones. The United States imposed retaliatory duties for many years before negotiating an MOU under which the EU opened an additional TRQ for beef from non-hormone-treated cattle. Recently, several countries have been able to qualify for the same TRQ, reducing its value for US. exporters. In December, following receipt of a request from affected stakeholders, USTR published a notice to consider reinstatement of retaliatory duties under section 301, in order to seek resolution of this long- standing issue. THE INFORMATION CONTAINED HEREIN IS FOR THE USE OF AUTHORIZED REPRESENTATIVES OF THE TRANSITION TEAM ONLY. SUBSEQUENT DISCLOSURE OF THIS INFORMATION TO ANY UNAUTHORIZED INDIVIDUAL, INCLUDING UNAUTHORIZED MEMBERS OF THE TRANSITION TEAM. IS STRICTLY PROHIBITED. COOL Dispute Canada and Mexico won a WTO dispute against the United States regarding country of origin labeling requirements imposed on beef and pork that detrimentally impacted foreign livestock imports. Congress amended the law to eliminate mandatory labeling requirements. Canada and Mexico acknowledge the repeal but have not formally terminated the dispute. Tuna Dispute The United States continues to defend U.S. ?dolphin-safe? labeling requirements in the WTO. Mexico has pursued arbitration regarding the level of retaliatory duties that may be imposed against US. goods. Compliance panels are reviewing whether a revised U.S. measure fully complies with WTO rules. THE INFORMATION CONTAINED HEREIN IS FOR THE USE OF AUTHORIZED REPRESENTATIVES OF THE TRANSITION TEAM ONLY. SUBSEQUENT DISCLOSURE OF THIS INFORMATION TO ANY UNAUTHORIZED INDIVIDUAL, INCLUDING UNAUTHORIZED MEMBERS OF THE TRANSITION TEAM, IS STRICTLY PROHIBITED. SERVICES AND INVESTMENT The Of?ce of Services and Investment is leading three ongoing negotiations: the Trade in Services Agreement the U.S.?China bilateral investment treaty (BIT), and the U.S.-European Union Covered Agreement relating to insurance and reinsurance. In U.S. free trade agreements, the Of?ce leads the negotiations on services, investment, ?nancial services, telecommunications, and e-commerce issues. The 8&1 Of?ce also leads participation on the interagency Committee on Foreign Investment in the United States (CF IUS). In addition, the Of?ce leads ongoing engagement on potential reforms to the Executive Branch?s approach to foreign telecommunications services license applications before the Federal Communications Commission (FCC). Trade in Services Agreement The Trade in Services Agreement negotiation, launched in April 2013, would create state-of-the-art legal rules and enhanced market access commitments among 23 economies representing nearly 70 percent of the world?s $55 trillion services market. As of December 2016, negotiations were at an advanced stage with the most signi?cant outstanding issues involving the approach to key E?Commerce provisions. participants are: Australia, Canada, Chile, Chinese Taipei, Colombia, Costa Rica, European Union, Hong Kong China, Iceland, Israel, Japan, Korea, Liechtenstein, Mauritius, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, Switzerland, Turkey, and the United States. U.S.-China Bilateral Investment Treaty The U.S.-China BIT, launched in June 2008, provides a major opportunity to push for liberalization of China?s numerous investment restrictions and to level the playing ?eld with China?s state-owned enterprises (SOEs) and favored private companies. China?s commitment in 2013 to put U.S. investors? market access rights on the table signaled China?s interest in broader economic reforms that could fundamentally change China?s approach to the regulation of foreign investment and business. The United States has been pushing for high?standard outcomes, including on U.S. investors? market access rights, SOEs, and China?s requirements to use domestic goods and domestic technology (which harm U.S. exporters as well as U.S. investors). As of December 2016, BIT talks were at an advanced stage with the most signi?cant outstanding issues relating to SOEs and U.S. investors? market access rights in key services sectors. Covered Agreement Negotiation with the European Union USTR and the Federal Insurance Of?ce of the U.S. Department of Treasury, in consultation with state regulators, are negotiating an agreement with the European Union on insurance and reinsurance prudential matters. The authority to negotiate this ?covered agreement? is the Federal Insurance Of?ce Act of 2010, Title of the Dodd?Frank Wall Street Reform and Consumer Protection Act of 2010. A successful agreement would level the playing ?eld for U.S. insurers and reinsurers in the EU, address EU reinsurers? concerns in the United States on reinsurance collateral, and address regulatory issues on group supervision, reinsurance supervision, and exchange and con?dential treatment of regulatory information, while continuing to ensure a high level of policy holder and consumer protection. THE INFORMATION CONTAINED HEREIN IS FOR THE USE OF AUTHORIZED REPRESENTATIVES OF THE TRANSITION TEAM ONLY. SUBSEQUENT DISCLOSURE OF THIS INFORMATION TO ANY UNAUTHORIZED INDIVIDUAL INCLUDING UNAUTHORIZED MEMBERS OF THE TRANSITION TEAM, IS STRICTLY PROHIBITED WESTERN HEMISPHERE Canadian Softwood Lumber Trade tensions over softwood lumber are longstanding and deeply-rooted, stemming from market differences for softwood ?ber supply in the United States and Canada. In the United States, most of the ?ber for softwood lumber is privately owned and sold in competitive markets; in Canada, provincial governments own and control most of the ?ber supply and most set the price for harvesting timber rather than allowing the market to determine such prices. On November 25, 2016 the US. lumber industry ?led petitions under US. trade remedy laws challenging the harmful effects of Canadian lumber that is unfairly subsidized or ?dumped?. This marks the ?fth time in 35 years that US. industry has used of US trade remedy laws to address this imbalance]. Such petitions have in the past generated multiple legal challenges from Canada, which were eventually resolved through bilateral softwood lumber agreements that impose restrictions on Canadian softwood lumber imports. The most recent such agreement expired in 2015 and, to date, Canada and the United States remain far apart on a new agreement. Ecuador GSP In 2012, Chevron petitioned USTR for Ecuador?s removal from the Generalized System of Preferences (GSP) program due to the country?s alleged disregard of a tribunal?s interim awards issued in proceedings begun by Chevron under the U.S.?Ecuador Bilateral Investment Treaty. In July 2016, Ecuador settled a separate arbitral award in full by paying Chevron over $112 million. Ecuador also submitted GSP petitions in 2012 to add roses, artichokes and broccoli to the program. Action on the product and Chevron petitions is pending. Colombia Truck Scrappage Prior to March 2013, new freight trucks over 10.5 metric tons (mt) could be legally registered in Colombia either by paying the government a ?scrappage fee?, or by demonstrating that an old truck of equivalent capacity had been scrapped. However, in March 2013, Colombia eliminated the ?scrappage fee? option. This change in policy has signi?cantly affected sales of imported trucks manufactured by several US ?rms. In September 2016, Colombia passed a framework decree that states that the 1x1 policy will end no later than December 31, 2018. USTR is monitoring the development of implementing regulations to ensure Colombia meets its deadline. 1 On December 16, 2015, the Department of Commerce announced the initiation of AD and CVD investigations of Canadian softwood lumber. The will make its preliminary injury determination on or before January 9. If the ITC determines there is a reasonable indication of injury, the investigations will continue and DOC will make its preliminary CVD determination in February 2017 and the preliminary injury determination in May 2017.