Inside US Trade | Vol. 19, No. 20
Peter Allgeier, the nominee for Deputy U.S. Trade Representative this week opposed including in future trade agreements the dispute settlement system used in the North American Free Trade Agreement for antidumping and countervailing duty cases. That system, established under chapter 19 of the NAFTA, has posed difficulties for the United States, Allgeier told the Senate Finance Committee in his May 16 confirmation hearing.
"With respect to Chapter 19, we have no intention of putting that forward in these negotiations," he said. The U.S. is currently engaged in negotiations for a bilateral trade agreement with Chile, Singapore and in efforts to negotiate the Free Trade Area of the Americas. "We certainly do not plan to expand its use to other countries."
He responded to a question posed by Sen. Max Baucus (D-MT) who charged that the Chapter 19 system has undermined U.S. trade law decisions. But Allgeier only offered mild criticism of the system. "We certainly have had our difficulties with Chapter 19," he said.
Allgeier insisted that the Bush Administration did not plan to negotiate away U.S. trade remedy law, but said it did not have the power to prevent other countries from raising the topic. "We are not putting them on the table, but we cannot prevent another country from speaking about its interests," he said. "We do not have any intention to weaken U.S. trade remedy laws in our negotiations."
He also did not rule out future negotiations on trade remedy law completely, by mentioning only the Chile deal and the FTAA. "We have made it very clear in our negotiations, for example, the Free Trade Area of the Americas and with Chile, we do not see those as fora for negotiating disciplines on antidumping and countervailing duty [law]," he said.
Allgeier repeated a long-standing argument that trade remedy laws that can be used against imports labeled unfairly priced or subsidized helps trade liberalization because the U.S private-sector knows it has recourse against these imports.
Allgeier appeared before the Senate Finance Committee with Linnett Deily, who is nominated to be the USTR deputy to the World Trade Organization. In addition to the exchange with Baucus, Allgeier and Deily were pressed by Sens. Jay Rockefeller (D-WV) and Orrin Hatch (R-UT) on the Administration's actions to help the steel industry.
Both their respective prepared testimonies were very general, with Deily emphasizing her qualifications for the WTO job because of her work in financial services.
Separately, Senate Finance Committee Chairman Chuck Grassley (R-IA) said the U.S. should not automatically exclude trade remedy laws from any future negotiations as the majority of the Senate called for in a letter last week. This opens the door to other countries taking sensitive issues out of the mix, he told reporters after the May 16 nomination hearing.
"It gives other countries the opportunity to take other things off the table that they do not want to address," he said. Grassley emphasized that he is not advocating negotiating away U.S. law, but rather a discussion of the issue. This would benefit the U.S. more than other countries, which are increasingly using antidumping law, but do not apply the same transparent principles to it, he said.
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