*EPF108 05/07/01
Texts: Senator Baucus on Protecting U.S. Laws in Trade Talks
(61 senators sign letter to President Bush) (1550)

Senator Max Baucus, the highest ranking Democrat on the Senate Finance Committee, has sent a letter signed by 61 of the 100 U.S. senators to President Bush insisting that they would oppose any international trade agreement that weakened U.S. antidumping and other trade laws.

The May 7 letter states that the laws are fully consistent with U.S. obligations in the World Trade Organization (WTO) and other existing trade agreements and promote free trade by countering foreign unfair practices.

In an accompanying statement, Baucus argued that Congress will not pass fast track -- or what the Bush administration is calling trade promotion authority -- without administration agreement on this defense of U.S. law.

The president and administration officials have stated they want fast track especially to advance Free Trade Area of the Americas (FTAA) negotiations.

Baucus questioned support among administration officials for existing U.S. trade law. He cited opposition to U.S. antidumping law in a report to Congress from the Trade Deficit Review Commission, of which Robert Zoellick, now the U.S. trade representative, was a member.

At issue are a number of provisions of U.S. law:

-- antidumping duty provisions against imports sold in the U.S. market at a price below that in the home market or a third market or below the price of production.

-- countervailing duty provisions against imports subsidized by foreign governments.

-- Section 301, a provision for attacking foreign unfair trade barriers that deny U.S. industry benefits under trade agreements, including authority for retaliatory sanctions for disputes that go unresolved.

-- Section 201, a provision authorizing temporary quotas or higher tariffs on surging fairly traded imports that threaten U.S. industry.

-- Webb-Pomerene Act, a 1918 provision exempting exporters' associations from certain antitrust restrictions.

-- Export Trading Company Act, a 1982 provision building on Webb-Pomerene to encourage formation of export trading companies by granting limited antitrust exemption.

-- Section 232, a provision authorizing restrictions on imports that threaten national security.

Baucus cited statements from officials of Japan and Brazil demanding changes in U.S. law in multilateral trade negotiations.

"If President Bush truly wants to win congressional support for fast track," Baucus said in his statement, "he should make a clear and unambiguous statement in support of these laws and communicate this message directly to his staff and to U.S. trading partners."

Under fast track, Congress restricts itself only to approve or reject a negotiated trade agreement, within strict time limits and without amendments. The previous grant of fast track expired early in 1994. Since then attempts to reauthorize fast track have failed over labor and environmental issues.

Following are the texts of the letter and the statement:

(begin letter text)

May 7, 2001
The President
The White House
Washington, D.C. 20500

Dear Mr. President:

We are writing to state our strong opposition to any international trade agreement that would weaken U.S. trade laws.

Key U.S. trade laws, including antidumping law, countervailing duty law, Section 201, and Section 301, are a critical element of U.S. trade policy. A wide range of agricultural and industrial sectors has successfully employed these statutes to address trade problems. Unfortunately, experience suggests that many other industries are likely to have occasion to rely upon them in future years.

Each of these laws is fully consistent with U.S. obligations under the World Trade Organization (WTO) and other trade agreements. Moreover, these laws actually promote free trade by countering practices that both distort trade and are condemned by international trading rules.

U.S. trade laws provide American workers and industries the guarantee that, if the United States pursues trade liberalization, it will also protect them against unfair foreign trade practices and allow time for them to address serious import surges. They are part of a political bargain struck with Congress and the American people under which the United States has pursued market opening trade agreements in the past.

Congress has made clear its position on this matter. In draft fast track legislation considered in 1997, both Houses of Congress have included strong provisions directing trade negotiators not to weaken U.S. trade laws. Congress has restated this position in resolutions, letters, and through other means.

Unfortunately, some of our trading partners, many of whom maintain serious unfair trade practices, continue to seek to weaken these laws. This may simply be posturing by those who oppose further market opening, but -- whatever the motive -- the United States should no longer use its trade laws as bargaining chips in trade negotiations nor agree to any provisions that weaken or undermine U.S. trade laws.

We look forward to your response.

(end letter text)

(begin statement text)

STATEMENT OF SENATOR MAX BAUCUS
"Trade Agreements Cannot Weaken Trade Laws"
May 7, 2001

Today, I am releasing a letter to the President signed by 61 Senators urging the Administration in the strongest terms not to negotiate new trade agreements that may weaken U.S. trade laws.

I would note that the signers of this letter include both the Majority and Minority leaders of the Senate and the majority of the Members of the Senate Finance Committee, which has primary jurisdiction over trade agreements.

As the Administration begins its effort to win fast track negotiating authority, I hope they recognize the handwriting on the wall: new trade agreements or grants of fast track that endanger key U.S. trade laws, such as antidumping law, countervailing duty law, Section 201, and Section 301, will not win congressional support.

Although they are sometimes criticized by U.S. trading partners and others, these laws actually promote free trade. They counter patently unfair trading practices, such as subsidies, closed markets, and dumping, and restore free and fair trade.

U.S. trade laws also fulfill a critical function as a political safety valve. If trade laws did not provide assurances that trade would be fair and that temporary relief could be granted against injurious surges of imports, there simply would be no political support for new trade agreements, existing trade agreements, or fast track negotiating authority.

This is why major international trade agreements, including the World Trade Organization (WTO), fully endorse the operation of U.S. trade laws.

Other less-well-known trade laws, such as the Webb-Pomerene Act, the Export Trading Company Act, and Section 232, also serve important functions and should not be compromised in trade agreements.

Unfortunately, there is not universal agreement on this point. Some of our trading partners -- many of whom openly practice protectionism -- have called for steps to weaken these laws as the quid pro quo for future trade agreements. Japan and Brazil have been particularly vocal on this point.

Some in the United States, including several members of the Bush Administration, have also refused to recognize the critical role of these trade laws in U.S. trade policy. Before joining the administration, even the current U.S. Trade Representative was a member of a commission that issued a report sharply critical of U.S. antidumping laws. This letter is a strong statement aimed at both some of our trading partners and those within the Administration that aim to weaken U.S. trade laws in trade agreements. No trade agreement that weakens U.S. trade laws will win congressional approval, and efforts toward that end will face stiff congressional opposition.

Thus far, much of the discussion on fast track negotiating authority has focused on the issue of labor and environment standards. I care deeply about these issues and am committed to working to ensure that they are meaningfully addressed both in future trade agreements and in fast track.

In this regard, the needless concerns the Administration has expressed in connection with the labor and environmental provisions in the U.S.-Jordan Free Trade Agreement have already slowed an agreement vital to an important partner in the Middle East peace process.

But no one should lose sight of the fact that the integrity of U.S. trade laws is every bit as important as labor and environmental issues.

The last three major trade agreements negotiated under fast track have each undermined U.S. trade laws in important ways. The so-called Chapter 19 reviews of antidumping and countervailing duty decisions under the U.S.-Canada FTA [Free Trade Agreement] and the NAFTA [North American Free Trade Agreement] have resulted in bad outcomes and a deeply flawed process. The WTO includes numerous constraints on the operation of U.S. trade laws that have been interpreted by dispute settlement panels in ways that undermine those laws.

If President Bush truly wants to win congressional support for fast track, he should make a clear and unambiguous statement in support of these laws and communicate this message directly to his staff and to U.S. trading partners. Concrete actions to employ these laws with regard to current problems of the lumber and steel industries would also do a great deal to establish the credibility of the Bush administration on this issue.

Whatever the case, I and many of my colleagues in both the Senate and the House [of Representatives] will work to ensure that any grant of fast track protects the integrity of U.S. trade laws.

(end statement text)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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