May 1, 2002

Ms. Gloria Blue
Executive Secretary
Trade Policy Staff Committee

Re: Antidumping Measures In The Free Trade Area
Of The Americas-Comments Of Consuming
Industries Trade Action Coalition ("CITAC")

Dear Ms. Blue:

These comments are submitted on behalf of the Consuming Industries Trade Action Coalition ("CITAC") to further discussion about the appropriate issues of interest to the United States in connection with trade remedies. Previous administrations have treated discussion of trade remedies as "out of bounds" for domestic political discourse. In the context of a Free Trade Area of the Americas, such an attitude can only result in failure of the negotiations, since many trading partners in the Western Hemisphere regard trade remedies as alternatives to protectionism employed by the United States.

The United States rightly finds itself decidedly on the defensive on all these issues. CITAC hopes to be an instrument of constructive change by bringing this necessary debate in the open. As a matter of our own national interest, the U.S. must take a more balanced, constructive and questioning approach in discussing trade remedies.
For the FTAA, the United States seeks a true free trade area, with strict disciplines on subsidization and elimination of "sanctuary markets" within the region. Thus, the rationale for anti-dumping and countervailing duty remedies does not exist within the FTAA region. Any interest group seeking to perpetuate these procedures within the FTAA region bears a heavy burden for justifying their continued existence.
Even if such procedures continue to exist, clearly there must be a favored position for FTAA goods under these laws. The reforms advocated for the Doha Development Agenda are equally warranted in the FTAA context. In addition, several rules for trade remedy proceedings are necessary:

      (1) NAFTA-analogous rules for safeguard proceedings. Under Article 802 of NAFTA, members are entitled to individual consideration of injury. The FTAA must have a similar process for FTAA member countries, ensuring their exclusion from safeguard measures unless individually they are found to have contributed importantly to serious injury.

      (2) Dispute settlement decisions of the FTAA dispute settlement institution shall be implemented promptly by all FTAA members.

I. CITAC Procedural Reforms
In addition, CITAC proposes four procedural reforms as a start toward balancing the interest of affected American constituencies in trade remedy cases. These reforms should be equally applicable in all trade remedy proceedings.
      (1) Consumer Standing

      Downstream purchasers of products subject to trade remedy actions must be accorded equal standing with domestic and foreign producers of these products. Fundamental fairness requires this. The effect of trade remedies is not limited to domestic and foreign producers of a product. Therefore, standing to participate in these proceedings and to contest the outcome as contrary to law must be extended to all interests affected.

      (2) Temporary Exceptions to Duties ("Short Supply")

      This concept, also sometimes referred to as "short supply," is one of CITAC's longest-standing ideas. It is simple and equitable-trade restrictions should not apply to goods that are not available from domestic sources. The Antidumping and Subsidies Agreements should contain provisions that allow domestic consumers to seek exceptions for short supply reasons. This will lessen the burden of trade remedies on domestic consuming industries in the importing country.

      (3) Lesser Duty Rule

      The Antidumping and Subsidies Agreements currently encourage member states to adopt a lower level of duties than the full antidumping or subsidy margin calculated if the "lesser duty" is sufficient to offset the injury suffered or threatened to the domestic industry. CITAC encourages the Administration to discuss making this rule mandatory. It would improve the administration of antidumping and countervailing duty laws around the world, by balancing the interest of petitioners with domestic consuming industries.

      (4) "Public interest" Test

      CITAC favors international discussion of including a limited public interest component in antidumping and countervailing duty proceedings, as is currently incorporated in U.S. safeguards law. National authorities should consider whether imposing duties in certain cases would undermine the national economic interest. We do not advocate a "51-49" test in determining public interest. However, where the costs and benefits of imposing punitive import duties are clearly and substantially out of balance, national authorities should be able to prevent real damage to the economy and the world trading system.

II. Additional Reforms in FTAA Should be Considered

As noted above, a full and honest debate is necessary to conclude a truly functioning FTAA. Trade remedy proceedings must be part of that debate. Within an FTAA, the need for the full disciplines of antidumping, countervailing duties and safeguards may not be necessary, just as they are not necessary within the U.S. market.
As the FTAA negotiations move forward, CITAC supports open dialogue in public forums to determine where a proper balance between the interest of U.S. producing and consuming interests lie in trade remedy policy. We would welcome the participation of all affected parties. There are numerous issues that would benefit from such public discourse.

Respectfully submitted,

Lewis E. Leibowitz
Counsel to CITAC




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