Journal of Commerce
You just have to feel a little empathy for U.S. trade officials, who, it seems, can hardly make a decision these days without risking a foreign challenge -- if the decision is to keep out unfairly priced imports or otherwise protect U.S. producers from import surges.
Increasingly, foreign governments are protesting such U.S. actions, demanding redress at the Geneva-based World Trade Organization, the agency responsible for setting and monitoring international trade rules.
Last year, the European Union, Canada, Japan, South Korea, Australia and New Zealand filed complaints charging that Washington was in one way or another breaking those rules.
During the previous four years, U.S. trade complaints against foreign governments at the WTO significantly exceeded the number that other countries brought against the United States. Not so in 1999, when 10 complaints were lodged against the United States -- two more than the United States filed against other countries.
More than half of those foreign complaints focused on U.S. measures against dumped or subsidized imports or special, so-called safeguard tariff protection for industries overwhelmed by imports. This apparently reflects, at least in part, the sharply higher number of U.S. anti-dumping-subsidy measures taken last year.
Still, it looks almost as though the United States can hardly provide import relief for one of its industries without other nations at least threatening to take the matter to the WTO.
Current case in point: President Clinton's raising tariffs on steel line pipe and wire rod. Immediately, the 15-nation EU requested consultations with Washington, warning that it might appeal Clinton's decision to the WTO.
And more often than not, foreign complainants are winning support from WTO dispute-settlement panels, which can lead to changes in U.S. trade rules.
After a WTO panel backed a South Korean complaint against the United States, the Commerce Department agreed to amend its regulations on revoking anti-dumping orders. (Korea insists, however, that the department still has not done enough.) Meanwhile, the EU, again with WTO panel backing, is pressing Commerce to change its subsidy rules on imports from privatized state enterprises.
Japan, angered by a recent spate of U.S. anti-dumping duties on its steel exports, has mounted perhaps the most aggressive attack on U.S. trade rules. It is protesting at the WTO that the United States is "abusively" flouting the WTO anti-dumping accord.
Not only is Tokyo challenging U.S. duties on Japanese hot-rolled steel, but it is also calling for renegotiation of the WTO anti-dumping accord. It wants to rein in what it regards as the excessive discretion the United States and others use in applying penalty duties.
And both Japan and the EU are seeking, yet again at the WTO, to force the United States to repeal an 84-year-old anti-dumping statute or else face possible retaliation. The 1916 law, which authorizes treble dollar damages against firms selling under-priced imports with the "intent of destroying or injuring" a U.S. industry, had long been in disuse until two steel companies recently invoked it. Japanese and European companies are among those targeted.
The Clinton administration refuses to repeal the law, arguing that it is an antitrust statute, beyond WTO's reach. But a WTO panel reportedly has just held that it does violate international trade rules. The United States is expected to appeal. If it loses and does not repeal the law, it could face countermeasures.
The EU, incidentally, also seeks to effectively gut another long-time U.S. trade law -- Section 337, largely used to block imports that infringe on U.S. patents and other property rights.
Last year alone, the U.S. International Trade Commission issued more than two dozen cease-and-desist orders and import bans under the law. But, the EU insists, the law discriminates against foreign companies. Brussels is taking its case to the WTO.
In international trade politics, for every yin there is a yang. While the EU, Japan and others try to chip away at U.S. import laws, there are some in Congress who talk of toughening those laws to further protect U.S. industries from unfairly priced imports, surging imports or both.
Legislation to do this has attracted more than 70 co-sponsors in the House and several senior senators. The steel industry, the legislation's principal backer, plans to step up its lobbying next month, just as Congress considers the administration's China trade bill. Almost surely, there will be an attempt to attach such legislation to the China bill.
As for the Clinton administration, it's basically in a holding pattern, trying to stave off the EU, Japanese and other challenges at the WTO, while keeping protectionist amendments at bay in Congress.
You can't say the administration is entirely reactive, however. In its 2001 budget, it is requesting more Commerce Department personnel to help expedite dumping and subsidy investigations. Commerce also plans to expand its monitoring of low-priced imports beyond steel to other, yet-unnamed product sectors.
Hanging over all this is the big question: Can the United States, Japan and other interested parties resolve their anti-dumping, anti-subsidy policy differences at least enough to help clear the way for a comprehensive WTO trade round?
What happens over the next several months in Congress and in the WTO dispute-settlement process should help influence the answer. The U.S. elections are another factor. The odds, say such savants as Calman Cohen, president of the Emergency Committee for American Trade, remain heavily against a U.S.-Japanese compromise.
Richard Lawrence writes for The Journal of Commerce from Washington.:
