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13 October 2004

House Votes to Repeal 1916 Dumping Law Rejected by WTO

Normal trade relations for Armenia, Laos among hundreds of provisions

By Bruce Odessey
Washington File Staff Writer

Washington -- The House of Representatives passed a bill that would repeal a dumping law ruled illegal by the World Trade Organization (WTO). The bill would extend permanent normal trade relations to Armenia and Laos.

To become law, the bill also must be passed by the Senate and signed by the president. It is not known whether the Senate will consider the bill when Congress returns November 16 from its election recess.

Most of the 299-page bill, passed by the House late October 8 without debate, comprises hundreds of tariff suspensions on imports of goods not produced domestically and traded in small volumes.

Repeal of the 1916 anti-dumping law was slipped into the final version of the miscellaneous tariffs bill by House and Senate negotiators even though neither chamber had passed such a provision in prior versions of the bill.

The House Judiciary Committee had approved the provision, however, and U.S. Trade Representative Robert Zoellick had urged its passage.

The WTO had ruled against the 1916 anti-dumping law, which was challenged by the European Union (EU) and Japan. Under the law, never actually used from 1916 until the 1990s, U.S. companies can sue foreign producers for triple damages for dumping goods on the U.S. market with the intent of injuring U.S. industry.

To date no plaintiff has ever collected damages under the 1916 law. In May, however, a U.S. federal court upheld a jury verdict ordering a Japanese newspaper press manufacturer to pay its U.S. rival more than $30 million, triple the damages from dumping as calculated by the jury. That case remains under appeal.

The provision in the miscellaneous tariffs bill would repeal the 1916 law but would not overturn any case already decided or pending under the law. Whether Japan or the EU would accept such a nonretroactive change is not known.

The WTO had already authorized retaliation by the EU against any final judgment ordered under the law against an EU company.

Another provision of the miscellaneous tariffs bill would grant permanent normal trade relations for Armenia. Normal trade relations (NTR), otherwise known as most-favored-nation treatment, prohibit discrimination among a country's trading partners. Armenia has had temporary NTR, which is approved year to year by the president.

The bill also would extend NTR to Laos, bringing into force a 1997 U.S.-Laos trade agreement. Laos remains one of only four countries worldwide and the only least-developed country to which the United States does not extend NTR.

The Laos provision reportedly presented an obstacle to Senate passage before recess. One publication reported that the two senators from Wisconsin, which has a sizable Hmong population, acted to block quick Senate consideration over objections to human rights treatment of the Hmong in Laos. The Hmong are a people native to the mountains of southeastern China and the northern parts of Vietnam, Laos, and Thailand.

Miscellaneous tariff bills typically pass each session of Congress routinely, but this one was held up over a succession of issues for three years. For example, one senator from a southern textile-producing state delayed Senate action until he achieved a change requiring clearer country-of-origin labeling for socks.

Other provisions of the bill would:

-- Correct a mistake in the Trade Act of 2002 that inadvertently raised duties on Andean handbags, luggage, flat goods, work gloves and leather wearing apparel under the Andean Trade Preferences Act (ATPA);

-- Clarify the African Growth and Opportunity Act (AGOA), extending retroactively to October 2000 duty-free treatment for collars and cuffs;

-- Prohibit U.S. imports of archaeological, cultural and other rare items from Iraq to prevent illegal shipment of such antiquities;

-- Require the U.S. customs agency in the Department of Homeland Security to establish integrated border inspection areas along the U.S.-Canadian border so that U.S. customs officers could inspect vehicles before they entered the United States from Canada, and Canadian customs officials could inspect vehicles before they entered Canada from the United States; and

-- Amend U.S. regulatory law concerning cellar treatment for both domestic and imported natural wine in line with a 2001 international agreement to eliminate testing of wine for reasons other than health and safety.

The EU has refused to accept U.S. wine-making practices and threatens not to import any U.S. wines that do not meet EU production standards after 2005 unless the two sides negotiate an agreement before then. Congressional negotiators have indicated they intended this provision, which could be used to bar U.S. imports of some EU wines, to provide leverage in U.S.-EU negotiations, which have achieved no agreement so far.

(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)