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June 13, 2007 

Senate Holds Hearing on Trade Enforcement in the 21st Century

By Matthew Apfel*

On June 12, 2007, the U.S. Senate Finance Committee held a hearing on “Trade Enforcement for a 21st Century Economy.” Specifically, the hearing focused on two issues: First, to what extent the Bush Administration is adequately enforcing U.S. trade agreements and second, the adequacy of enforcement of U.S. antidumping, safeguard and other trade remedy laws.

Panelists at the hearing included: Dan Glickman, current Chairman and CEO of the Motion Picture Association of America (former member of Congress and Secretary of Agriculture); Jennifer Hillman, Distinguished Fellow at Georgetown Law School's Institute of International Economic Law (former ITC Commissioner and USTR General Counsel); Robert Lighthizer, International Trade Partner, Skadden, Arps, Meagher & Flom (former Deputy USTR and chief of staff of the Senate Finance Committee); and Erik Autor, Vice President and International Trade Counsel of the National Retail Federation (formerly international trade counsel to the Senate Finance Committee).

The opening remarks of Chairman Senator Max Baucus (D-MT) made clear that, in his opinion, the Administration “can and must do more to enforce US trade agreements.” Baucus alleged that the Administration “spends far more time negotiating new deals than enforcing those already in place”. In support of this assertion he alleged that the Administration has only brought a third as many WTO cases in its first six years as the previous administration did in a similar six year time span.

Senator Baucus also called on the Administration to do more to enforce existing U.S. antidumping, safeguard and other domestic trade remedy laws. For example, Baucus pointed to President's denial of relief in section 421 China safeguard cases as the Presidents alleged “failure to abide by Congressional intent.”

Senator Grassley (R-IA), the ranking member on the Finance Committee took a more restrained approach in his opening statement. The Senator noted that in his own view, “the US has strong trade remedy laws on the books and he believes the Commerce Department and the International Trade Commission take seriously their obligation to enforce those laws.” Additionally, Grassley noted that U.S. trade laws reflect an important balance in that when domestic industries are given protection from overseas competition, consumers see higher prices as a result.

China quickly arose as a symbol of the harmful effects of an unmodified U.S. trade policy. In his testimony, Robert Lighthizer called on the U.S. Government to “get serious about China.” Specifically, he suggested that U.S. trade officials must “not allow foreign competitors (such as China) to use rules of the game that are stacked against our producers and workers."

By contrast, in his
testimony Erik Autor voiced the National Retail Federation’s concerns that it would be disastrous for consumers if Congress creates “a trade remedies system that, under the guise of a quasi-judicial proceeding, becomes essentially an arbitrary, results-driven, and politically-influenced means to provide a few favored industries automatic relief from import competition.” Autor argued that, “such a system merely becomes an instrument of protectionism that undermines US competitiveness, hurts millions of American consumers, and is incompatible with where our country needs to be in the 21st century.”

Appearing In the middle of the ideological debate, both Glickman and Hillman argued that although U.S. trade remedy laws are adequate, for the most part, to “level the playing field,” their effectiveness is being undermined by the lack of vigor by which the Administration is utilizing these tools. For example, Glickman stated that although the USTR has been extremely helpful in working to promote fair trade; it needs more resources in order to enforce existing free trade agreements. In lieu of, “statutory changes", Glickman noted, "the USTR needs increased resources to have the clout they need to enforce American free trade agreements [specifically intellectual property rights under US FTAs].”

Similarly, in her testimony Hillman stated that “we have seen a significant decline in the number of trade cases initiated by the United States . . ." and that a "sound trade enforcement regime for the 21st century must make adjustments for the changes that have occurred to our trading system in the last decade while at the same time ensuring that we fully utilize the tools that we already have available to us.”

This hearing demonstrated that, In an increasingly protectionist America, China has become the scapegoat for the underlying failures of Congress and the current and previous administrations to adequately address the underlying causes of a dissatisfied constituency (some examples include: wage disparity, low paying employment domestically, diminishing pension benefits and the steady increase in the number of uninsured Americans).

Arguably, a middle ground must be reached. Should protectionism morph from draft legislation to increased trade barriers then the balance Senator Grassley called for will have been lost. In addition, such increased trade barriers will lead to an increased cost for millions of Americans with little benefit to U.S. manufacturing employment.

*Matthew Apfel is a third year law student at George Washington University. He can be reached at msapfel@law.gwu.edu.

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