by Janet Kopenhaver AWPA Director of Government Affairs
TRADE
� WTO Rules Against Line Pipe Safeguard Case
A World Trade Organization (WTO) dispute panel ruled that US restrictions on welded line pipe imports under a safeguard provision are illegal. The panel stated that the safeguard restrictions had been applied without respecting traditional trading patterns, and that the US had violated WTO rules by failing to exclude developing countries from the measure. Such countries, including Korea, are entitled to special and differential treatment in the trade body. The panel also noted that the ITC report on the trade case cited no proof that increased imports had seriously damaged US producers. The US is expected to appeal the ruling.
� China and the WTO
The World Trade Organization (WTO) gave the final go-ahead for China to join - a step that forces Beijing to open its markets to foreign companies. Capping 15 years of stop-and-go negotiations, the WTO approved China's accession at the meeting recently concluded in Doha, Qatar.
China ranks as the seventh-largest trading nation. It exported goods worth $249 billion last year, while its imports totaled $225 billion. In joining the WTO, China agreed to slash import tariffs to an overall average of 8%, down from the current 21%.
Under an agreement with the US, Washington will now cease the annual review procedure in which Congress considers ending "normal trade relations" with China based on its human rights performance.
� Doha Agreement
Representatives from the 142 member nations of the WTO reached consensus at the ministerial conference in Doha, Qatar on an agenda for a new round of global talks to lower trade barriers. The US, bowing to global pressure to help expand world trade, abandoned its refusal to discuss limiting the use of punitive antidumping measures. Repeated US antidumping and countervailing duty cases against imports deemed to be excessively cheap or harmful to the domestic industry have unleashed a furious reaction overseas, particularly among the Japanese and South Korean steelmakers.
The deal reached was to have the trade law talks in two phases ? first discussions to clarify the issues, and then subsequent negotiations about changes. This leaves open the timetable for the transition to substantive talks, and the actual agenda. The new round is scheduled to end January 1, 2005.
The Bush Administration's agreement to engage in negotiations about existing trade laws will rile Members of Congress with manufacturing constituents that regularly use the antidumping provisions against imports. Particularly the US steel industry has expressed its concern in any negotiations on antidumping laws. They have already stated their intention to pressure Congress to prevent any "watering down" of US trade laws.
This Administration decision was seen as going against a resolution overwhelmingly approved by the House of Representatives (410-4) that urged no weakening of US antidumping and countervailing duty laws. Introduced by Rep. Phil English (R-PA), the resolution inferred that no positive result would be reached from any re-negotiations on these laws used by domestic industries to retaliate against dumped imports.
The Administration, however, has indicated that the talks on trade laws will address important transparency issues that need to be considered. While US laws will indeed be on the table, so will all of our trading partners'. This ensures that American exporters are ensured a more level playing field and that barriers to their products can be decreased.
Further, the Administration stresses that they did not agree to "negotiate" our trade remedy laws. Rather, they simply agreed to start discussions with WTO members on these laws, but not necessarily changing them.
Finally, the US serves as a model to other nations on fair and free trade laws. Any improvements that can be made to make these practices more transparent will help all domestic businesses competing in this global marketplace.
Not to be ignored, the Chairman of the Senate Finance Committee, Max Baucus (D-MN) stated, "Congress must have a more prominent role in trade negotiations." He added that as Chairman, "I plan oversight hearings on these negotiations."
� Andean Trade Pact
The House of Representatives approved legislation (HR 3009) that would extend and expand trade preferences for Andean countries (Bolivia, Ecuador, Colombia and Peru) under the Andean Trade Preferences Act (ATPA). The Senate Finance Committee gave voice vote support to the measure. The bill also places additional conditions on the extension of trade benefits. They include commitments to adhere to WTO obligations and protect intellectual property rights, consistent with WTO standards, and internationally recognized workers rights. The US is the leading export market for each of the Andean countries.
� Free Trade Agreement with Egypt
The Bush Administration raised the possibility of seeking a free trade agreement with Egypt, after talks with a top Egyptian official ? Yousef Boutros-Ghali, the country's Minister of Economy and Foreign Trade. Department of State officials stressed the importance of the growing economic relationship between the US and Egypt.
� FSC
The Bush Administration has decided to appeal an adverse World Trade Organization (WTO) ruling that more than $4 billion in tax breaks to American companies represent an unfair trade subsidy.
The WTO decision, if not reversed, would allow the European Union (EU) to impose penalty tariffs on $4 billion of American exports in retaliation for the tax break. The decision to appeal has the effect of postponing the sanctions for at least two months.
USTR Robert Zoellick said the appeal is expected to take between 60 and 90 days. Even if the US loses that ruling, an arbitration panel will have to determine the exact size of trade penalties the EU would be allowed to impose. The EU has indicated that it would seek to impose more than $4 billion in sanctions on a whole range of US exports to Europe, ranging from farm products to steel.
ENVIRONMENTAL
� EPA Rulemaking
The House Small Business Committee recently held a hearing on "EPA Rulemaking: Do Bad Analyses Lead to Irrational Rules?" Specifically legislators discussed whether EPA disregards small business issues when promulgating new rules. Among the rules cited as detrimental to small businesses were the Toxic Reporting Inventory (TRI) lead rule, Total Maximum Daily Load (TMDL) issue, and the Effluent Limitation Guidelines (ELG).
With respect to the ELG rule, the witness concluded that the Agency had not demonstrated that the rule is cost-effective, and that it had seriously underestimated the economic impact, especially on small businesses. All the witnesses agreed that EPA must use sound science and cost-benefit analyses to define the health and environmental problems and design the most cost-effective solutions.
� OSHA Recording and Reporting Requirements
The Occupational Safety and Health Administration (OSHA) is delaying the effective date of three provisions of the Occupational Injury and Illness Recording and Reporting Requirements rule published January 19, 2001, and is establishing interim criteria for recording cases of work-related hearing loss. The effective date of these provisions is delayed from January 2, 2002 until January 1, 2003.
OSHA's occupational noise standard requires employers in general industry to conduct periodic audiometric testing of employees when employees' noise exposures are equal to, or exceed, an 8-hour time-weighted average of 85dB. If such testing reveals that an employee has sustained hearing loss equal to a Standard Threshold Shift (STS), the employer must take protective measures, including requiring the use of hearing protectors, to prevent further hearing loss. The old recordkeeping rule contained no specific threshold for recording hearing loss cases.
OTHER LEGISLATION
� Steel Loan Guarantee Program
Senator Robert Byrd (D-WV) succeeded in having a provision included in the Interior Appropriations bill that would extend and revise the $1 billion Emergency Steel Loan Guarantee Act that was set to expire at the end of this year. Under the Byrd language, the steel loan guarantee program would be extended through 2003. It also increases government loan guarantees to 95% from 85%; gives companies until 2015 to repay loans instead of 2005; and includes coke producers and iron ore mining operations as qualified applicants.
� Steel Legacy Costs Amendment
Rep. Pete Visclosky (D-IN) has drafted a provision to obtain $2.4 billion in congressional money to offset steel worker legacy costs and health care expenses. The "Steel Industry Legacy Relief Act of 2001" would provide a steel company with funds equal to 80% of their retiree health care costs. The provision also calls for up-front funding of $2.4 billion with $800 million to be disbursed in three years.
The Indiana Congressman has been trying to get this provision attached to other bills being debated in the House, but to date has not been successful.
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