HTML _ RL30461 - Trade Remedy Law Reform in the 107th Congress
12-Apr-2001; William Cooper; 6 p.

Abstract: Trade remedies are government measures to minimize the adverse impact of imports on domestic industries. Antidumping duties are used to counter the effects of imports sold at unfairly low prices on the domestic market. Countervailing duties are used to counter the price effects of imports that benefit from government subsidies in the exporting countries. Safeguard remedies (also called Section 201 and escape clause remedies) are used to reduce the injurious impact of surges in fairly trade imports.

The 106th Congress introduced a number of bills to revise U.S. trade remedy statutes and similar bills have been introduced in the 107th Congress. The legislation is in response to steel industry concerns that current U.S. trade remedy laws are inadequate to counter the effects of import surges. In the 106th Congress, some of the bills would have revised safeguard remedies. Others would have changed antidumping and countervailing-duty remedies. The congressional proposals followed different approaches to the same goal- to ease the procedural burden in obtaining relief and improve the chances that U.S. industries would obtain relief. In so doing, the legislation would have made it less likely that industries would press Congress to directly restrict imports through protectionist legislation. On October 28, 2000, President Clinton signed P.L. 106-387, the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 which contains a provision, the so-called Byrd Amendment, requiring antidumping and countervailing duties be distributed to the domestic industries originally affected by the dumping or subsidy actions.

Trade remedy legislation is largely supported by those industries, such as steel, that are most sensitive to foreign competition. The legislation is generally opposed by those industries and groups that use imports as inputs or consume them as final products. Increased trade relief would likely result in higher prices to these groups. This issue has re-emerged in the 107th Congress with new legislative proposals. This report will be revised as congressional action warrants.

Trade remedies are government measures to minimize the adverse impact of imports on domestic industries. The remedies might be applied to counter the effects of unfair foreign trade practices, such as foreign government subsidies or dumping, that is, selling an import below its fair market value. Remedies might also be applied to reduce the impact of surges in fairly-traded imports. While having some antecedents in earlier U.S. law, trade remedies largely came into use when the United States and other economically developed countries engaged in bilateral and multilateral negotiations to reduce tariff and nontariff trade barriers. Policymakers have considered trade remedies a tool to cushion the adverse impact of trade liberalization on import-sensitive industries and in so doing to build a political consensus for trade agreements and open trade.

The Constitution assigns primary responsibility for regulating trade to the Congress, but the Congress over time has delegated- for specified periods of time- much of the authority to the executive branch and continues to shape U.S. trade policy by passing new trade laws or amending old ones. At times, Congress has responded to import crises by proposing, and sometimes enacting, changes in the trade remedy laws.

In 1998, U.S. imports of steel products soared. (1) In response to steel industry concerns, the House passed, on March 18, 1999, (289-141) H.R. 975 (Visclosky et. al.) which would have required the President to restrict steel imports to levels equal to the monthly average of imports during the 36 months prior to July 1997 and would have circumvented standard U.S. trade remedies. On June 22, 1999, the Senate voted to withdraw consideration of the bill.

The large House vote in favor of H.R. 975 can be considered a vote of no-confidence in U.S. trade remedies, at least regarding the steel industry. (2) In response to this criticism, legislation was introduced in the 106th Congress that would have revised trade remedy laws. On October 28, 2000, President Clinton signed P.L. 106-387, the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 which contained a provision, the so-called Byrd Amendment, that requires antidumping and countervailing duties be distributed to the domestic industries originally affected by the dumping or subsidy actions. The report examines U.S. trade remedy programs and analyzes the legislative proposals and their potential implications. This issue has re-emerged in the 107th Congress. [read report]

Topics: Economics & Trade, International, International Finance

1306 
Start Over