[Congressional Record Volume 145, Number 124 (Wednesday, September 22, 1999)]
[Senate]
[Pages S11260-S11262]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DeWINE (for himself, Mr. Lott, Mr. Akaka, Mr. Inouye, Mr. 
        Roberts, Mr. Hagel, Mr. Bunning, Mr. Voinovich, Mr. Dorgan, and 
        Mr. Conrad):
  S. 1619. A bill to amend the Trade Act of 1974 to provide for 
periodic revision of retaliation lists or other remedial action 
implemented under section 306 of such Act; to the Committee on Finance.


                    CAROUSEL RETALIATION ACT OF 1999

  Mr. DeWINE. Mr. President, I rise this afternoon on behalf of my 
colleague, Senator Hagel, as well as Majority Leader Lott, Senator 
Akaka, Senator Inouye, Senator Roberts, Senator Bunning, Senator 
Voinovich, Senator Dorgan, and Senator Conrad, to introduce the 
Carousel Retaliation Act of 1999. This bill would create a powerful 
mechanism to protect our Nation from illegal foreign trade practices.
  These are the facts. Today, our Nation is being injured by the 
refusal of

[[Page S11261]]

some foreign countries to comply with World Trade Organization, WTO, 
dispute settlement rulings. Let me repeat that. Other countries are 
failing to comply with the rulings of the WTO. As many of my colleagues 
know, the WTO has a very detailed process for handling trade disputes 
between member nations. Unfortunately, some member nations are simply 
undermining this entire process by refusing to comply with the final 
dispute settlement decision, even after losing their cases on appeal.
  Noncompliance with dispute settlement rulings severely undermines 
open and fair trade. As many of our farmers, cattle ranchers, and large 
and small businessowners know firsthand, this is having a devastating 
impact on their efforts and attempt to maintain or gain access to 
important new international markets.
  In an effort to secure compliance, the dispute settlement process 
provides the winning nation the authority to retaliate. The winning 
nation, after a decision has been made, can legally retaliate. That is 
what the provision is; they can retaliate against that losing nation. 
They can do so if, at the end of a reasonable period of time, the 
losing country does not abide by the final decision. Retaliation 
usually begins with the estimation of damages caused by the refusal, 
followed then by WTO authorization to impose penalty duties on the 
offending country's exports. However, even with retaliation, some 
nations are still refusing to comply.
  The European Union has made it clear that it is willing to live in 
perpetuity with the present U.S. retaliation lists, which is why the 
WTO ruled in both the pending beef and banana trade cases that the 
United States can impose retaliatory tariffs on European imports. We 
are doing that. Moreover, they are entertaining the possibility of 
subsidizing their affected domestic targets to counter our WTO-
authorized action. Not only are they ignoring what the ruling was, not 
only are they ignoring our retaliation, now they are turning around and 
preparing to subsidize these particular products. Both of these trade 
cases that I have mentioned took several long years to work through the 
dispute settlement system and were undertaken, frankly, at great 
expense to the U.S. Government and to the private sector in our 
country.
  The European Union's actions are establishing a very dangerous 
precedent. If they are successful, then other nations can be expected 
to follow a similar course. Something simply must be done. Something 
must be done to increase the likelihood of compliance, or we risk 
losing more than a WTO case; we risk losing American jobs. Therefore, 
it is important that the WTO's dispute settlement process be 
strengthened. That is what this bill does, and that is what we are 
talking about today.
  Our proposed Carousel Retaliation Act will help ensure the integrity 
of the WTO settlement dispute process because it will provide a 
powerful mechanism that will place considerable pressure on 
noncompliant countries to comply. The measure will shake these 
noncompliant countries up and it will complicate any effort they 
undertake to counter U.S. retaliatory measures. Specifically, our bill 
would amend the U.S. Trade Act of 1974 by requiring the U.S. Trade 
Representative to periodically carousel--or rotate--the list of goods 
subject to retaliation when a foreign country or countries have failed 
to comply with a WTO ruling. Let me add that this is very clearly 
consistent with WTO rules.
  Under our bill, the retaliation list would be carouseled, or rotated, 
to affect other goods 120 days from the date the first list is made, 
and then every 180 days thereafter. The bill provides the U.S. Trade 
Representative the authority to make exceptions. The representative 
would not have to do this if, 1, it could be determined that compliance 
is imminent; or, 2, if both the U.S. Trade Representative and the 
affected petitioners agree that carouseling in that particular case is 
not necessary. Currently, the U.S. Trade Representative has the 
authority to carousel retaliation lists, but is not required to do so. 
What our bill does is change the law and requires the Trade 
Representative to do this.
  The WTO is one of the most important means for American businesses 
and producers to open foreign markets, liberalize commerce, resolve 
disputes, and ensure more open and fair trade. American farmers and 
agribusiness, for example, are major net exporters, posting exports of 
more than $57 billion in 1997. But frankly we can do more and better, 
and we must. Of the nearly 50 complaints filed by the United States in 
the WTO, almost 30 percent involved agriculture. If countries fail to 
comply with WTO rulings, American agriculture and other U.S. sectors in 
need of trade relief will suffer greatly. The American Farm Bureau 
Federation, the National Cattlemen's Beef Association, the American 
Meat Institute, the U.S. Meat Export Federation, and the Hawaii Banana 
Industry Association support the bill.
  The ``Carousel Retaliation Act,'' candidly, is tough, but it is meant 
to be tough. It is the right response to chronic noncompliance with WTO 
rules.
  Again, I commend my colleague, Senator Hagel, who is on the floor at 
this moment, and Senators Lott, Akaka, Inouye, Roberts, Bunning, 
Voinovich, Dorgan, and Conrad for their dedication to this issue.
  I urge my colleagues to join this effort to protect our Nation from 
illegal foreign trade practices and cosponsor the ``Carousel 
Retaliation Act.''
  I thank the Chair.
  I see my colleague from Nebraska is on the floor. I suspect he would 
like to talk about this bill as well.
  Thank you very much. I yield the floor.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1619

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. REVISION OF RETALIATION LIST OR OTHER REMEDIAL 
                   ACTION.

       Section 306(b)(2) of the Trade Act of 1974 (19 U.S.C. 
     2416(b)(2)) is amended--
       (1) by striking ``If the'' and inserting the following:
       ``(A) Failure to implement recommendation.--If the''; and
       (2) by adding at the end the following:
       ``(B) Revision of retaliation list and action.--
       ``(i) In general.--Except as provided in clause (ii), in 
     the event that the United States initiates a retaliation list 
     or takes any other action described in section 301(c)(1) (A) 
     or (B) against the goods of a foreign country or countries 
     because of the failure of such country or countries to 
     implement the recommendation made pursuant to a dispute 
     settlement proceeding under the World Trade Organization, the 
     Trade Representative shall periodically revise the list or 
     action to affect other goods of the country or countries that 
     have failed to implement the recommendation.
       ``(ii) Exception.--The Trade Representative is not required 
     to revise the retaliation list or the action described in 
     clause (i) with respect to a country, if--

       ``(I) the Trade Representative determines that 
     implementation of a recommendation made pursuant to a dispute 
     settlement proceeding described in clause (i) by the country 
     is imminent; or
       ``(II) the Trade Representative together with the 
     petitioner involved in the initial investigation under this 
     chapter (or if no petition was filed, the affected United 
     States industry) agree that it is unnecessary to revise the 
     retaliation list.

       ``(C) Schedule for revising list or action.--The Trade 
     Representative shall, 120 days after the date the retaliation 
     list or other section 301(a) action is first taken, and every 
     180 days thereafter, review the list or action taken and 
     revise, in whole or in part, the list or action to affect 
     other goods of the subject country or countries.
       ``(D) Standards for revising list or action.--In revising 
     any list or action against a country or countries under this 
     subsection, the Trade Representative shall act in a manner 
     that is most likely to result in the country or countries 
     implementing the recommendations adopted in the dispute 
     settlement proceeding or in achieving a mutually satisfactory 
     solution to the issue that gave rise to the dispute 
     settlement proceeding. The Trade Representative shall consult 
     with the petitioner, if any, involved in the initial 
     investigation under this chapter.
       ``(E) Retaliation list.--The term `retaliation list' means 
     the list of products of a foreign country or countries that 
     have failed to comply with the report of the panel or 
     Appellate Body of the WTO and with respect to which the Trade 
     Representative is imposing duties above the level that would 
     otherwise be imposed under the Harmonized Tariff Schedule of 
     the United States.''.

  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. HAGEL. Mr. President, I wish to thank my distinguished colleague 
and friend from Ohio for his leadership on the ``Carousel Retaliation 
Act.''

[[Page S11262]]

  I am a free trader, but I am also a fair trader. Trade is our 
economic future. It is especially so in agriculture. Trade is our 
strongest engine of economic growth.
  I, as have many of my colleagues, have fought for legislative reform 
on unilateral sanctions policies that hurt our trade, trade reform, 
fast-track authority for the President, and other trade-related 
legislation.
  Free trade is a two-way street. Unfortunately, throughout the world 
the instinct for protectionism still remains strong. If trading 
partners take advantage of us, we can't simply remain passive and 
permit American exporters--especially farmers and ranchers--to continue 
to take a beating in foreign markets.
  Trade is a two-way street. Free, fair, and open trade is a two-way 
street. Access to markets improves all people's standard of living. 
Some of our trading partners believe this. Some people talk about it, 
and some people actually do something about it. Unfortunately, many of 
our trading partners' rhetoric is stronger than their actions. That is 
why I am an original cosponsor of this bill.
  As you heard from my colleague, Senator DeWine, this bill would 
require the U.S. Trade Representative to periodically review a 
retaliation list of foreign products from countries that fail to comply 
with the World Trade Organization rulings or do not reduce trade 
barriers against the United States. Different products would be rotated 
on and off the list every few months until the offending countries made 
the right changes in trade policy.
  That is what we as a community of nations of civilized people decided 
to do when we formed the World Trade Organization. That is what the 
World Trade Organization is about--to sort through disputes in trade. 
If we cannot rely on the World Trade Organization to make tough 
decisions, settle those disputes, and then enforce the WTO rulings, 
then what good is the organization?
  If the members of the World Trade Organization find some rulings 
against their own self-interest and not in compliance with what they 
think is right, or if they believe they must pick and choose which WTO 
rulings they will enforce and live with, then we don't have much of an 
open, fair, and free trade organization that today is known as the 
World Trade Organization. It is a myth and it is a charade unless we 
all comply with the WTO rulings and enforce the rulings. That is the 
only way it will work.
  The policy of targeted tariffs is prompted, quite honestly, by the 
European Union's ban on American beef. There is no scientific evidence 
to support the European Union's contention that using growth-enhancing 
hormones in cattle poses any health threat to humans. There is no 
scientific evidence at all.
  But yet, even though we have won case after case in the World Trade 
Organization, the European Union continues to walk through this charade 
of artificial tariffs and barriers. The hormone argument is a very 
flimsy excuse, at best, for straight out, raw protectionism. The WTO's 
recent position vindicating their position was essentially a slap on 
the wrist for the EU, and still the EU is trying to delay compliance 
with even this token penalty.
  If the EU keeps playing games with the United States in the hormone-
enhancing beef issue, this policy of targeted tariffs will provide us 
with a flexible, effective way to respond. No one wants to take this 
kind of action. But each one of us in this body represents hard-working 
constituents who seek to improve their communities, enhance the growth 
of their families, give the world opportunities, and playing by the 
rules. That is what we are talking about here--playing by the rules 
straight out, to be honest.
  Again, I don't look forward to working on this bill to implement it 
if, in the interest of open, fair, and free trade, we must resort to 
this kind of activity. American farmers and ranchers are hurting partly 
because of weak export markets. It is not because they are not 
producing quality products. We produce quality products. But it is 
because of politics and protectionism.
  I strongly support this bill. I am proud to be an original cosponsor. 
I am sorry we have to take this measure, but it is necessary. And the 
world must understand that the United States will do whatever it takes 
to support our producers and to assure, as best we can, that the world 
improves all people's lives, all people's standard of living, hope, 
opportunity, and economic growth if we continue to make progress with 
free, open, fair trade.
                                 ______