TRADE• FSC Fix StalematedThe congressional impasse over legislation to avert costly trade sanctions deepened as Senate Democrats blocked passage of the bill fixing the tax problem in hopes of forcing Republicans to allow votes on an overtime pay rule and other key items on the Democratic agenda. On a largely party-line vote of 51 to 47, Republicans fell nine votes short of the 60 needed to force passage of the measure without consideration of unrelated amendments. Majority Leader Bill Frist (R-TN) and Senate Minority Leader Tom Daschle (D-SD) have subsequently agreed on how to move forward on the bill, and will do so this month. Frist said the tax bill is second in line after a bill to compensate asbestos victims. Republicans had complained that Democrats were playing political games with the tax bill by seeking a laundry list of politically inspired amendments, including raising the minimum wage to $7 per hour. But they wound up acceding to the Democrats' major requests. According to Democrats, 80 amendments to the bill can be offered; 50 from Republicans and 30 from Democrats. The bill would repeal export subsidies that have been outlawed by the World Trade Organization and replace them with corporate tax breaks aimed primarily at helping American manufacturers. With a nod from the WTO, the European Union began imposing penalties on selected US products that can gradually rise to $4 billion by next year. Similar legislation is also stalled in the House. While there has been some outcry over the tariffs, it has not yet attained critical mass, according to aides to several senators. If it begins to do so, there could be more pressure for compromise and quick action. • Commerce Denies Rep. English Request on 201 DutiesThe Commerce Department issued a memorandum rejecting arguments made by US steel producers that the steel import tariffs should be deducted from the real selling price of steel in calculating antidumping duty margins on imports. The ruling was a part of an annual administrative review of imports of stainless steel wire rod from South Korea. If adopted, the new policy could have effectively inflated antidumping duty margins by up to 30% (the high end of the tariffs when they first took effect two years ago) on any steel imports subject to a safeguard remedy for the period under review. In the memorandum, Commerce said it determined that the Section 201 duties were not "US import duties" within the meaning of the statute, and to make such a deduction would effectively collect the 201 duties a second time. Rep. Phil English (R-PA) had sent a letter to Commerce Secretary Don Evans urging him to deduct Section 201 duties from the US price calculated in determining the margin of dumping in US antidumping cases. The letter asked the Commerce Department to deduct import duties imposed under Section 201-203 of the Trade Act of 1974 from the US price that is calculated in determining the margin of dumping in US antidumping cases, contending that the failure to make such a deduction would improperly mask the true extent of harm in situations where US producers have established that they are suffering injury caused by both dumped and surging imports. • FTA UpdatesThe Dominican Republic is the sixth nation to join the Central American Free Trade Agreement (CAFTA) with the US. The other five are Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. The proposed agreement, which Congress must approve, would allow the Dominican Republic to export a small amount of sugar to the US. Under CAFTA, partner nations would be able to import a total amount of sugar equivalent to 1.3% of US production of sugar a year, rising to about 1.9% in 15 years. The addition of the Dominican Republic to the pact represents an additional $8.7 billion for a total $32 billion in trade. Under the entire agreement 80% of US exports of consumer and industrial goods would become duty-free in the Dominican Republic, and all tariffs would be phased out over 10 years. But with trade becoming a hot election issue that Democrats hope to use against President Bush, the chances are dimming for moving any new trade agreements through Congress this year. • What's Happening at Doha?WTO negotiators have agreed to push for a "framework" agreement on agriculture in the Doha Round negotiations by the end of July. This target was agreed to by officials after a week-long informal session in Geneva. The deadline reflects a growing view that progress must be made before the summer to prevent the multilateral negotiations from being bogged down in the presidential election process, and the change of personnel at the head of the European Commission, both of which are to occur in the autumn. The "framework" deal would set out the basic principles and concepts on which a final agreement would be based. But most delegations have now conceded that the accord would not include any numbers or percentages.
 American Wire Producers Association |
