*EPF509 11/19/2004
Senate Passes Bill Granting Normal Trade Relations for Laos
(Tariffs bill also includes provisions on Armenia, dumping law repeal) (870)

By Bruce Odessey
Washington File Staff Writer

Washington -- The Senate has given final passage to a bill that would extend normal trade relations (NTR), otherwise known as most-favored nation status, to Laos.

The bill would also make NTR permanent for Armenia and repeal a 1916 law that was ruled by the World Trade Organization (WTO) as a violation of U.S. obligations.

President Bush is expected to sign the bill into law.

In the key vote November 19, senators voted 88-5 to limit debate on the bill, which is opposed by some senators who allege Laotian human rights abuses. The Senate passed the bill itself later the same day by voice vote.

Most of the 299-page bill, passed by the House of Representatives October 8 without debate, comprises hundreds of tariff suspensions on imports of goods not produced domestically and traded in small volumes.

The provisions on Laos and the repeal of the 1916 dumping law were inserted during the House-Senate conference that eliminated differences between the versions of the bill passed by the two chambers even though neither chamber had included such provisions in prior versions of the bill.

Extending NTR to Laos would bring into force a 1997 U.S.-Laos trade agreement. Laos remains one of only four countries worldwide and the only least-developed country to which the United States has not granted NTR.

NTR prohibits discrimination among a country's trading partners.

Senator Chuck Grassley, Republican chairman of the Finance Committee, spoke during Senate debate in favor of NTR for Laos, arguing that status would help alleviate poverty and bring the country into the global marketplace.

"Laos is one of the poorest nations of Asia," Grassley said, "yet exports from Laos are subject to some of the highest tariffs when they enter the United States."

Senators from Wisconsin, home of about 33,000 Hmong refugees, argued against NTR because of what they called credible reports of Laotian army atrocities against the Hmong, a people inhabiting the mountainous regions of southern China and adjacent areas of Vietnam, Laos and Thailand.

"This is the wrong time to reward the government of Laos with normal trade relations," Senator Russ Feingold of Wisconsin said. "Reports emerging from Laos continue to demonstrate that human rights remain appalling."

Feingold said the Lao government refused to investigate allegations of human rights violations or to allow independent monitoring.

Feingold and other opponents stopped delaying final passage of the bill in exchange for Senate passage of a resolution condemning human rights abuses in Laos.

Another provision of the tariffs bill would grant permanent NTR for Armenia, which has had temporary NTR, approved year to year by the president.

"I hope that we will be able to consider similar treatment for Azerbaijan in the very near future," Grassley said.

The Bush administration had pressed for passage of the NTR provisions and for repeal of the 1916 antidumping law.

The WTO had ruled against the 1916 law, which was challenged by the European Union (EU) and Japan. Under the law, never actually used from 1916 until the 1990s, U.S. companies can sue foreign producers for triple damages for dumping goods on the U.S. market with the intent of injuring U.S. industry.

To date no plaintiff has ever collected damages under the 1916 law, although a recent verdict against a Japanese newspaper press manufacturer remains under appeal.

The provision in the miscellaneous tariffs bill would repeal the 1916 law but would not overturn any case already decided or pending under it. Whether Japan or the EU would accept such a nonretroactive change is not known.

Miscellaneous tariff bills typically pass each session of Congress routinely, but this one was held up over a succession of issues for three years. For example, one senator from a Southern textile-producing state delayed Senate action until he achieved a change requiring clearer country-of-origin labeling for socks.

Other provisions of the bill would:

-- Extend the Generalized System of Preferences (GSP) to allow duty-free treatment for hand-woven and hand-knotted carpets, a provision designed primarily to help Afghanistan and Pakistan;

-- Correct a mistake in the Trade Act of 2002 that inadvertently raised duties on Andean handbags, luggage, flat goods such as linens, work gloves and leather wearing apparel under the Andean Trade Preferences Act (ATPA);

-- Clarify the African Growth and Opportunity Act (AGOA), extending retroactively to October 2000 duty-free treatment for collars and cuffs;

-- Prohibit U.S. imports of archaeological, cultural and other rare items from Iraq to prevent illegal shipment of looted antiquities;

-- Require the Department of Homeland Security to establish integrated border inspection areas along the U.S.-Canadian border where U.S. customs officers could inspect vehicles before they entered the United States from Canada; and

-- Amend U.S. regulatory law concerning cellar treatment for both domestic and imported natural wine in line with a 2001 international agreement to eliminate testing of wine for reasons other than health and safety.

Congressional sources have indicated they intended this provision to provide leverage in negotiations with the European Union to accept U.S. wine-making practices.

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

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