*EPF309 10/11/00
U.S. House Approves Sanctions Reform, Dumping Duties Measure
(Measure lifts food sanctions against five countries) (800)
By Merle D. Kellerhals, Jr.
Washington File Staff Writer

Washington -- The U.S. House of Representatives has passed an agricultural spending bill that includes provisions to lift food sales to five formerly sanctioned countries, including Cuba.

It would also permit payment of anti-dumping duties revenue directly to injured U.S. industries and permit importation of lower cost prescription drugs.

The House gave final passage to the $78,100 million agriculture spending measure October 11 after it had been reported out of a Senate-House conference committee October 5. The Senate has still to act on the measure; whether President Clinton will sign the measure into law or veto it remains uncertain.

White House spokesman Jake Siewert said the president will have to examine closely the amended bill. He said some provisions would tend to undermine the president's authority to conduct foreign policy and administer economic sanctions. He said other provisions would discourage small U.S. farmers from exporting farm products to Cuba because they will be unable to take advantage of either commercial or government-backed financing.

The economic sanctions reform measure would lift all unilateral food and medicine sanctions on Cuba, Iran, Libya, North Korea and Sudan, but would also restrict the president's authority to impose unilateral sanctions without congressional consent.

The measure would require a review process for future unilateral economic sanctions, requiring the president to consult with Congress and request passage of a joint resolution before he imposed new food and medicine sanctions. And, if sanctions were imposed, they would have to be reviewed in two years for further implementation.

"The president retains full flexibility to maintain any sanctions necessary to restrict dual-use items, or to deny exports to a country involved in hostilities against the United States," said Representative George Nethercutt Jr., a Washington state Republican who fought to keep the sanctions reform measure alive this congressional session.

However, the Clinton administration has maintained that it must retain full flexibility to impose unilateral economic sanctions under a variety of circumstances and has objected to any language restricting that flexibility.

Also under this measure, all countries other than Cuba would be eligible for private and public-backed U.S. financing for U.S. exports.

Cuba, which has been under economic sanctions since 1962, has been allowed to buy medicine from the United States since 1992 under restrictions that require the Caribbean nation to pay cash for goods or obtain credit from a third country. Cuba buys about $2 million worth of U.S. medicine and health products annually.

Senator Patrick Leahy, a Vermont Democrat, lamented October 10 that the revised sanctions measure would severely restrict potential farm products sales to Cuba. He said it would effectively prohibit "public financing, which makes it virtually certain that few, if any, sales will actually occur. It is bad for America's farmers, bad for the people of Cuba, and bad foreign policy."

On the dumping issue, Senator Robert Byrd, a West Virginia Democrat, succeeded in including an amendment that would allow payment of revenue from anti-dumping duties to the U.S. industries that brought and won the dumping cases. Now such revenue goes to the U.S. Treasury. In 1999 the revenue from antidumping duties amounted to approximately $500 million.

Byrd said the measure "would advance compliance with international trade rules by providing a necessary deterrent to foreign plans to undermine U.S. markets. This amendment would provide fair retribution for U.S. industries cheated out of vital revenues as a result of illegal trade."

The European Union, however, said the measure would violate U.S. obligations under the General Agreement on Tariffs and Trade (GATT). EU Ambassador Guenter Burghardt said in a letter to members of Congress that recycling the dumping duties "would be over and above the relief provided for in the relevant GATT rules ... and thus, would be inconsistent with these rules."

Burghardt said the measure would create subsidies to U.S. industries that may be subject to challenge in the World Trade Organization (WTO). WTO rules create "a level playing field between the imports in question and the domestic industry. This level playing field would be destroyed if the domestic industry receives the proceeds of the duty," he said.

The agriculture spending measure also contains an amendment that would permit the reimportation of prescription drugs into the United States. The aim of the legislation is to make it possible for U.S. consumers to buy drugs manufactured by U.S. pharmaceutical makers that are sold at lower cost in Canada, Mexico and elsewhere.

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Website: http://usinfo.state.gov)
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