by Janet Kopenhaver AWPA Director of Government Affairs
TRADE
� Vietnam Free Trade Agreement
By a voice vote, the House approved a bilateral trade agreement between Vietnam and the US completed by the Clinton Administration in July 2000. The measure now awaits action by the full Senate. Should this bill pass and get signed by President Bush, Vietnam would join the great majority of nations that may sell their goods in the US at low tariff rates. In exchange, Vietnam agreed to reduce its tariffs, eliminate nontariff barriers, protect intellectual property rights and open its markets to American service and investment companies.
Vietnam is the 13th largest nation in the world, with 80 million people, but trade with the US was only about $1.2 billion last year. House Ways and Means Chairman Bill Thomas (R-CA) predicted that Vietnam's exports to the US, mainly textiles and light manufactured goods, could more than double with normal trade relations.
� Jordan Free Trade Agreement
The Senate passed legislation that would remove all trade barriers between the US and Jordan after the Bush Administration persuaded a pivotal Republican Senator to drop his objections to the agreement. President Bush has already said that he would sign the bill, which passed the House this past summer.
Phil Gramm (R-TX) had objected to the agreement because it contained environmental and labor provisions. It commits both countries to not weaken and to uphold their own existing labor and environmental standards, but does not impose any new standards. Should a dispute arise, the two governments have said they will seek to resolve it through negotiations.
� Free Trade Area of the Americas
The draft consolidated Free Trade Area of the Americas (FTAA) Chapter on Subsidies, Antidumping, and Countervailing Measures has come under fire by counsel to US steel producers. The 34 Western Hemisphere democracies are engaged in negotiations to reach an FTAA by 2005.
Critics included in its list of "some of the most problematic sections, of the draft chapter a proposal that would require that dumped imports be "the principal or dominant cause" of material injury to the US industry rather than a "significant" cause of material injury.
� Byrd Amendment
Canada and Mexico joined countries asking the World Trade Organization to rule on the legality of a US law that passes on the duties levied on foreign imports under antidumping or countervailing duty orders to American companies. Ten countries (Australia, Brazil, Chile, India, Indonesia, Japan, Korea, Thailand, Canada and Mexico), plus the 15-nation European Union, are now involved in the case against the Byrd Amendment, making it the largest dispute in WTO history in terms of countries involved.
The WTO agreed to Canada's and Mexico's request for dispute settlement panels to be convened, and ordered that their cases be considered by the same panel.
Under the Byrd amendment enacted last year, tens of millions of dollars in duties collected by the US government will be handed over to companies that participated in cases against foreign exporters found to be "dumping" products at artificially low prices. The Customs Service that is charged with distributing the funds still is working to draft final rules governing the disbursements.
The complainants contend that the law punishes exporters twice ? first they are fined and then those fines are handed to their US competitors. The WTO panel has six months to make its ruling.
� China/Taiwan in the WTO
World Trade Organization (WTO) negotiators formally agreed to terms for Chinese membership after 15 years of talks. A deal was reached at an informal meeting of the 142-nation body and is due to be adopted at a meeting of trade ministers scheduled for Qatar in November. This will smooth the way for Taiwan's accession into the WTO which is also expected to happen at the same meeting. Taiwan has committed to reduce average duty rates on industrial products from 6.03% to 5.78% upon accession, ultimately reaching an average of 4.15%. Predictions are that full implementation would create a market of an estimated $1 billion for US exports to Taiwan.
� WTO and Steel
There are two recent developments with respect to WTO decisions concerning US measures on steel.
First, the organization has upheld findings that American antidumping orders against foreign steel were illegal. This came in the form of a WTO rejection of an American appeal involving antidumping penalties on Japanese steel imports.
Second, the WTO agreed to set up panels on three complaints by the European Union about duties levied on imports of steel. The three cases cover a total of 15 antidumping rulings by the Department of Commerce. Most concern imports from former nationalized steel companies that the US claims are still benefiting from government subsidies.
A WTO panel last year ruled in a similar case that the US was wrong to impose countervailing duties on the imports of the company that took over from British Steel when it was privatized. It said the company had paid the market price for British Steel's assets.
� Tax Exempt FSCs
Upholding an earlier interim finding, a panel of the World Trade Organization confirmed that a US tax break (allowing US firms to create tax-exempt foreign sales corporations) designed to bolster exports violates the international body's rules. Under WTO rules, the US can appeal the panel's ruling. This decision will enable the European Union to impose 100% tariffs on US exports valued at $4.1 billion.
ENVIRONMENTAL
� TMDL Cost Estimates
The EPA released its first set of hard figures estimating the costs behind full implementation of the Clean Water Act's Total Maximum Daily Load (TMDL) program. Several interest groups indicated they will soon file comments with EPA that the $900 million to $4.3 billion per year price tag estimated is too low.
According to EPA, TMDL implementation will range in price depending on how each state chooses to allocate its water pollution reductions: 1) either to sources with lower control costs, or 2) by spreading out reductions on an equal basis to sources regardless of the cost. EPA estimates a $900 million to $3.2 billion price range if TMDLs are put into place using cost-effective reductions among all pollution sources, including trading between point and non-point sources should adopt sweeping controls, scenario EPA said is "unlikely," TMDL costs could stretch as high as $1.9 billion to $4.3 billion.
Meanwhile, the cost of developing the TMDL program will run EPA and states between $63 million and $69 million per year over the next 15 years. EPA will also gauge its progress in the TMDL program with a water quality monitoring program costing $17 million per year.
� EPA Budget Being Cut
The EPA budget recommended by President Bush proposes a $500 million cut from last year's appropriations, from $7.8 billion to $7.3 billion. As part of this cut, the Bush plan would divert $25 million in federal funds for environmental enforcement to a state enforcement grant program.
Leggett & Platt Host USTR Zoellick to Plant Tour
The Leggett & Platt facility in Carthage, MO organized a plant tour for the US Trade Representative Ambassador Robert Zoellick and Rep. Roy Blunt (R-MO). The ability to show such a high level trade government official and Congressman a wire manufacturing facility is extremely valuable to not only the company, but also to the industry as a whole.
Among the topics covered with the delegation was the current mid-point review of the Tariff Rate Quota Program (see related story, page 1). One USTR staffer told AWPA afterwards that there was no better way to make our views known than to engage the Ambassador at this event. Thanks goes to the Leggett & Platt officials and employees who arranged the tour and addressed wire industry concerns.
Joe Downes, President of the Leggett & Platt Wire Group (left),
explains the wire manufacturing process to USTR Ambassador Robert
Zoellick (middle), and Rep. Roy Blunt (R-MO).
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