U.S. Global Trade and Automation

Robert Casanova*U.S. International Trade Commission*Disclaimer: The views, opinions, and research expressed solely represent the author. This presentation is not meant to represent the Commission, its Commissioners, or the U.S. government.

• U.S.-China trade relations

• USMCA and Intellectual Property

• CP-TPP

• U.S. Government’s role in promoting the advancement of Artificial Intelligence and Automation

Overview

• Section 301 tariffs on goods from China

─Made in China 2025

─Title III of the Trade Act of 1974

• U.S.-China Phase One

─Forced Technology Transfer

─ Intellectual Property

U.S.-China Trade Relations

• Announced by Xi Jinping in 2015─ Is the foundation for Chinese policy on advanced technology for the

future─The initiative promotes investments in numerically controlled tools and

robots─Following the announcement of Made in China 2025, the Robotics

Industry Development Plan was announced in 2016• Foster both domestic innovation and Foreign Equity Investments in

robotics firms • Acquisition of foreign robotics producers (KUKA AG)

Made In China 2025

• Section 301 of the Trade Act of 1974 provides the United States with the authority to enforce trade agreements, resolve trade disputes, and open foreign markets to U.S. goods and services. It is the principal statutory authority under which the United States may impose trade sanctions on foreign countries that either violate trade agreements or engage in other unfair trade practices

• Four tranches of goods from China─ List 1 worth $34 Billion─ List 2 worth $16 Billion─ List 3 worth $200 Billion─ List 4 worth $300 Billion

• Industrial robots and parts among products listed

Section 301 Tariffs

U.S.-China Trade of Robots and Parts

Source: USITC Dataweb: Nov. – Dec. 2019 data based on author’s projections.

0

5000

10000

15000

20000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Thou

sand

sValue of U.S. imports of robots and parts from China

(USD)

2018 2019

• U.S. imports from China in 2018 (blue)

─Overall U.S. imports from China decreased by 11 percent in 2018

• Tranche 1 tariffs of 25 percent (originally 10 percent) went into effect in September 2018

• Initial decline from Sept. to Oct. then a rebound in Nov. and Dec.

• U.S. imports from China in 2019 (orange)

─Overall U.S. imports from China decreased by 4 percent in 2019

• Trade fluctuated throughout 2019

• Trade value below 2018 throughout the period

Impact of Section 301 on U.S. Imports

U.S.-China Trade of Robots and Parts

Source: USITC Dataweb: Dec. 2019 data based on author’s projection.

02000400060008000

10000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Thou

sand

sValue of U.S. exports of robots and parts to China

(USD)

2018 2019

• U.S. exports to China in 2018

─Overall U.S. exports to China increased by 6 percent in 2018

• From Sept. to Oct. sharp increase in exports followed by a correction in Nov. and Dec.

• U.S. exports to China in 2019

─Overall U.S. exports to China decreased by 8 percent in 2019

• In April, U.S. exports to China experienced a large increase in value

• Sept.-Dec. U.S. exports were at its lowest levels in 2019

• Chinese retaliatory tariffs include industrial robots

Impact of Section 301 on U.S. Exports

• Negotiated by the U.S. and China in December 2019

─Forced technology transfer

• China agrees to end policy of technology transfer as a precondition for market access and administrative approval

• Refrain from directing or supporting outbound investments aimed at acquiring foreign technology

─ Intellectual Property

• Addresses concerns over protection of trade secrets

• Tariffs of 25 percent on $250 billion worth of goods remain in effect

U.S.-China Phase One Trade Deal

• Signed by the United States, Canada, and Mexico but not yet ratified by Congress

─The original TPP Intellectual Property framework was the baseline

─Updates the labor value content provisions from the original NAFTA

• 40-45 percent of automotive content must be made by a worker earning USD $16 per hour

─Updated rules of origin

USMCA and Intellectual Property

• The Comprehensive and Progressive Trans-Pacific Partnership was signed by Canada, Mexico, Australia, Vietnam, Brunei, Japan, Chile, Malaysia, New Zealand, Peru, and Singapore

─ Currently in effect in Canada, Mexico, Australia, Japan, New Zealand, Singapore, and Vietnam

─ Will represent almost 500 million consumers and 13.5 percent of global GDP

─ Intellectual Property

• Provides provisions for all IP categories: trademarks, geographical indications, industrial designs, copyright and related rights, patents, agricultural chemical products, trade secrets, and civil, criminal and border enforcement

CP-TPP

• The Administration has made American competitiveness in AI a priority

─February 11, 2019, the American AI Initiative executive order was signed

─Directs Federal agencies to prioritize investments in the research and development of AI

─Prepare the American workforce for AI related jobs by directing Federal agencies to help the workforce gain AI related skills and promote S.T.E.M learning

─Protect America’s advantage in AI by securing critical AI technology

Artificial Intelligence and Automation

• Senator Martin Heinrich of New Mexico authored the Artificial Intelligence Initiative Act of 2019

─ Introduced in the Senate on May 21, 2019

• Invest in artificial intelligence research and development and support the development of an artificial intelligence science and technology workforce pipeline

Artificial Intelligence and Automation

• Representative Jerry McNerney of California introduced the AI in Government Act of 2019

─ Introduced in the House of Representatives on December 19, 2019

• Creates the AI Center of Excellence within the General Services Administration

• Advise and promote innovative uses of AI to benefit the public

• Improve the cohesion and competency in the use of AI

Artificial Intelligence and Automation

Robert CasanovaInternational Trade Analyst

U.S. International Trade CommissionWashington, DC 20436Telephone: +1 (202) 708-2719Email: Robert.Casanova@usitc.gov

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