[Congressional Record Volume 145, Number 106 (Monday, July 26, 1999)]
[Extensions of Remarks]
[Pages E1650-E1651]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        TRADE POLICY REFORM ACT

                                 ______
                                 

                      HON. JAMES A. TRAFICANT, JR.

                                of ohio

                    in the house of representatives

                         Monday, July 26, 1999

  Mr. TRAFICANT. Mr. Speaker, our foreign competitors have been dumping 
steel in America below market value for well over a year. This 
practice, which has been allowed to continue unencumbered by the 
Clinton Administration, has had a devastating effect on the U.S. steel 
industry and U.S. steelworkers. I have taken numerous actions, alone 
and in conjunction with the Congressional Steel Caucus, to urge the 
Administration to change its backward trade policy and remedy the 
current

[[Page E1651]]

crisis. In March, the House passed the Bipartisan Steel Recovery Act, 
which imposes quotas on steel imports above a certain level, for three 
years. Short-term solutions, however, are not a panacea. In order to 
rebuild the confidences of American industry and the American worker in 
the international trading system--and particularly in U.S. trade 
policy--Congress should reform three major trade law regimes: (1) 
enforcement of international trade agreements, (2) remedies against 
disruptive import surges, and (3) remedies against foreign unfair trade 
practices.
  There is an urgent need to strengthen Section 301 of the Trade Act of 
1974, which was enacted to enable the U.S. Trade Representative (USTR) 
to open foreign markets closed to imported products and services by 
unreasonable trade barriers. The effectiveness of Section 301 has been 
significantly undermined by the World Trade Organization (WTO) Dispute 
Settlement Understanding (DSU) and the emergence of new, harder-to-
reach forms of foreign trade barriers. Section 301 now serves almost 
exclusively as a mechanism by which complaints are funneled through the 
USTR en route to the WTO. The bilateral component of U.S. trade 
diplomacy has been allowed to decay. The WTO has been ineffectual in 
dealing with modern, complex trade issues such as the closure of 
foreign markets by governments working with private monopolies and 
cartels (e.g. Kodak v. Fuji). Title I of the Trade Policy Reform Act 
would reinstate this bilateral component of U.S. trade diplomacy and 
require new reporting requirements by the Office of U.S. Trade 
Representative (USTR) to Congress. These new reporting requirements: 
(1) make the USTR more accountable to Congress, and (2) provide for 
direct information dissemination to Congress, in order to improve 
Congressional oversight, and (3) address both market access barriers 
and foreign compliance with international accords. The ``Trade Policy 
Reform Act'' also mandates appropriate action by the Commerce 
Department when market access barriers or non-compliance with trade 
accords is found.
  Specifically, Title I requires monitoring of and reports on foreign 
market access for U.S. goods and services, negotiations to gain market 
access, progress reports on negotiations, monitoring of compliance with 
trade agreements, and 301 actions should negotiations fail or should 
countries refuse to negotiate or in the case of noncompliance with 
agreements. The Trade Policy Reform Act would also bring the National 
Trade Estimates (NTE) report closer to Congress' original goals and 
address current illegal trade practices such as prison labor, etc. The 
NTE is further amended to include input by affected U.S. industries and 
their employees. Congress devised the NTE in the 1980s to inventory, on 
an annual basis, foreign trade barriers affecting U.S. exports of goods 
and services. The purpose was to bring about negotiations to eliminate 
such barriers. The list today does not serve its intended function.

  With respect to relief from unfair trade practices, Title II of the 
Trade Policy Reform Act mandates action by the USTR, for the first 
time, against collaborations between foreign governments and private 
enterprises to restrict market access for U.S. goods and services by 
making such collaborations actionable. Moreover, the legislation would 
allow any interested party, defined as one who has been economically 
adversely affected, to request a review of country compliance with any 
trade agreement. Non-compliance is actionable.
  In addition, Title II would prohibit the Secretary of Commerce from 
using any funds appropriated by Congress to implement existing 
agreements and negotiate any new ones for those categories of steel 
included in H.R. 975, the Bipartisan Steel Recovery Act. Section 2106 
also directs the Secretary to withdraw from the current agreements and 
notify the other signatories of that action.
  Title III of the Trade Policy Reform Act would abolish the 
International Trade Commission and transfer its authority and 
responsibilities to the Department of Commerce. The ITC's continued 
independence and existence outside of any institution accountable to 
the people of the United States undermines America's industry and hurts 
America's workers. The ITC's independence is precisely what makes it 
the least appropriate body to determine whether U.S. industries are 
being injured by imports and what relief those industries should be 
given. America's workers deserve to have an agency on their side, 
protecting their interests, with their security and success its primary 
goal. Although the ITC Commissioners are confirmed by the Senate, 
Congress has no other role whatsoever in its oversight (other than 
appropriating its operating funds).
  When the ITC purports to not be a policymaking body, it really means 
that it does not follow American policy, just its own. The ITC's policy 
clearly places the concerns of foreign industries on the same plateau 
as our own industries, and American workers suffer. Furthermore, the 
ITC contradicts itself. On one hand it claims to be an independent 
agency that conducts objective studies on international trade. On the 
other hand the ITC is required to assist the President, making 
recommendations on how to relieve industries injured by increasing 
exports, and advising him on whether agriculture imports interfere with 
governmental price support programs. In filling these dual roles, the 
ITC is the equivalent of a referee that makes calls in a game while 
coaching his team from the sidelines. The Commissioners of the ITC are 
supposed to serve the American people. The American worker does not 
need a coach that is also required to fill the role of ``objective'' 
referee. An agency like the ITC cannot entirely fulfill its duties. 
Title III will abolish this problematic agency, transfer its authority 
to the Department of Commerce, and in doing so fill the much-needed 
role of a trade agency that successfully champions the causes of the 
American workers.

  For an agency charged with the awesome responsibility of being the 
last line of defense of American industry against foreign attack, 
objectivity and unaccountability are unacceptable. Moving its functions 
to the Secretary of Commerce would subject those roles to tougher 
scrutiny by Congressional committees of jurisdiction and, consequently, 
to the American people. The Secretary would be responsible for all 
decisions made on behalf of America's workers and would have to answer 
to the elected representatives of the American people for those 
determinations.
  Finally, Title IV of the Trade Policy Reform Act creates a WTO Review 
Commission to strengthen the dispute resolution process. Section 301 
provisions require the U.S. to bring Section 301 cases involving trade 
agreements to the dispute settlement procedures established under the 
agreements. Therefore, U.S. membership in the WTO does not diminish or 
restrict the ability of the United States to initiate Section 301 
cases, but does require it to submit cases involving WTO trade 
agreements to the WTO for dispute settlement. If the U.S. wins, the 
loser must comply with the WTO ruling or face retaliation measures.
  What happens when the U.S. loses a case in the WTO? Technically, the 
United States could issue Section 301 trade sanctions, despite any 
decision made under the WTO dispute resolution process. However, if the 
United States imposed an unauthorized sanction on a WTO-covered item 
(e.g. raised the tariff beyond a negotiated rate), the sanctioned 
country might issue a complaint to the WTO, which might rule against 
the U.S. The WTO has no real authority to force any nation to change 
its laws or abide by its rulings. If the U.S. chose to ignore WTO 
rulings, it would run the risk that other nations would too. In order 
for the DSU mechanism to work, WTO members, including the U.S. must be 
willing to ``play by the rules.''
  Specifically, the WTO Review Commission would review the WTO dispute 
settlement cases adverse to the United States to determine if the WTO 
had exceeded its authority, which could lead the President to seek 
changes in WTO dispute settlement rules. For example, should the 
Commission determine that the WTO's ruling in favor of Japan in the 
Kodak-Fuji case was due to lack of authority in anti-competitive 
practices, the Commission could then direct the President to negotiate 
an anti-competitive trade agreement to expand WTO authority. The 
creation of a WTO Dispute Settlement Review Commission is both a 
mechanism for protecting U.S. trade interests as well as an 
``official'' means for the U.S. to initiate improvements in the Dispute 
Settlement system, as problems arise. The United States could base 
future trade negotiations on the Commissions findings.
  It is incumbent upon Congress to restore to confidence of U.S. 
industry and American workers in our international trading system. To 
accomplish this objective, Congress must ensure a fair and equitable 
international trading system: illegal trade practices must not be 
tolerated, foreign markets that restrict American goods and services 
must be liberalized, international panels must be scrutinized for any 
bias, conflict of interest, or overstepping or authority, and 
ineffective government agencies must be reinvented to serve U.S. 
business and labor. The ``Trade Policy Reform Act'' provides common 
sense solutions to some of the key problems with America's trade 
policies. I urge all Members to cosponsor this legislation.

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