The Government Accountability Office has agreed to look into the Commerce Department's steel and aluminum tariff exclusion process, though it cannot begin the study for about three months. Sen. Pat Toomey, R-Pa., one of the requesters, announced the GAO decision on Dec. 19. "I hope GAO's review produces recommendations for fixing this flawed process so more Americans are spared from these onerous taxes," Toomey said in a press release. The GAO said in its letter to Toomey that "staff with the required skills will be available to initiate an engagement in about three months." Sen. Tom Carper, D-Del., who joined with Toomey and Sen. Doug Jones, D-Ala., in requesting an investigation said that "as of this fall, the Department of Commerce had received nearly 50,000 exclusion petitions from American manufacturers seeking relief from these misguided tariffs." Carper said the "Commerce Department has not only created a broken and convoluted exclusion process, but the agency has only managed to issue decisions in a third of these 50,000 pending cases."
The outgoing chairman of the House Ways and Means Committee expressed no anxiety that it won't be possible to get enough votes in his chamber to pass the new NAFTA next year. Chairman Kevin Brady, R-Texas, who will pass the gavel to ranking member Richard Neal, D-Mass., next year, said, "This isn't the first time we've been in the minority during trade agreements. The Panama, Colombia, South Korea [are] good examples of that," he said in a gaggle with reporters at the Capitol Dec. 19. "I anticipate the Ways and Means Committee will be working to continue to improve the agreement until there's bipartisan support for it."
The World Trade Organization agreed to form a panel on whether Russian retaliation for U.S. steel and aluminum tariffs is illegal, at the Dec. 18 meeting of the Dispute Settlement Body. A Russian official said its delegation was bewildered to hear the U.S. say that Russia is undermining WTO rules "when it is the U.S. arbitrarily imposing additional duties on steel and aluminium and using them as a squeezer in order to allow the US, with different degrees of success, to get trade concessions from certain members," a summary of the meeting said. According to a Geneva trade official, there now have been five panels formed on retaliatory tariffs responding to the Section 232 tariffs. At the same meeting, the U.S. blocked a first request by China to form a panel to judge whether U.S. tariffs on Chinese goods under Section 301 are legal. Its delegation said that the two parties are in negotiations, and that's the right place to settle the conflict, not the WTO. The panel will automatically be authorized at next month's Dispute Settlement Body meeting. China said U.S. tariffs are damaging the global economy and damaging global industrial supply chains.
On the second day of a World Trade Organization review of U.S. trade policy, U.S. Ambassador Dennis Shea said it's wrong to blame America for the crisis of the multilateral trading system, as he responded to European and Chinese comments from the first day of the hearing (see 1812170007). Shea said China is arguing that it will subsidize, dump products, force technology transfer and steal business information, and claim it is all OK because American consumers pay less for Chinese imports. Any U.S. response is then decried as an abuse of power and irrational, Shea said, according to a summary of the hearing provided by a Geneva trade official. "This is not acceptable," Shea said.
All of the Democrats on the House Ways and Means Committee, from the left and center wings of the party, sent a letter to U.S. Trade Representative Robert Lighthizer on Dec. 19, saying Peru has made "a flagrant attack on the heart of the [U.S.-Peru Trade Promotion Agreement (Peru Trade Agreement)'s] Forestry Annex that cannot go unchallenged." They asked the administration to take enforcement measures if Peru does not reverse course by the end of this week.
Trade officials from the Australian, Japanese and New Zealand embassies told a Washington trade audience that tariffs on Chinese goods are hurting their economies too. Phil Houlding, a trade counselor for the New Zealand embassy, said he doesn't like to hear leaders from either China or the U.S. "celebrating the other facing economic hardship." He noted the market turmoil of late, and said, "You've got to be a little careful what you wish for. These things rebound through a globalized world."
A half-dozen members of the House Ways and Means Committee -- including the outgoing Trade Subcommittee chairman -- sent a letter to U.S. Trade Representative Robert Lighthizer saying the steel and aluminum tariffs on Mexico and Canada need to go. Five Republicans, led by Rep. Jackie Walorski of Indiana, signed the letter, as did Rep. Ron Kind, D-Wis. Kind, whose dairy farming constituents are among those hurt by Mexican retaliation for the tariffs, is interested in leading the Trade Subcommittee next year. They wrote that "we urge you to put the highest priority on lifting the steel and aluminum tariffs and retaliation entirely as soon as possible, and certainly before congressional consideration." The USTR has said he is working on finding a solution to the tariffs on Mexico and Canada, but has not offered a timeline for when agreement might be reached. Only Australia has been given an exemption without a quota so far.
The retiring chairman of the Senate Finance Committee and ranking member Ron Wyden, D-Ore., sent a letter to Commerce Secretary Wilbur Ross complaining that businesses can't get answers from the department, the exclusion process is too slow and staff provide ambiguous guidance when requests are rejected on technical grounds. Chairman Orrin Hatch and Wyden asked the department to get requests adjudicated in no more than 106 days, to clearly identify technical defects, and to improve its responses to questions. In their letter, they thanked Ross for adding a rebuttal and surrebuttal process, and for expanding exclusion eligibility to quota countries.
Apparel trade groups testifying at the Dec. 18 International Trade Commission hearing on a potential EU-U.S. trade deal said they see room for departures from past trade deal approaches. Steve Lamar, executive vice president of the American Apparel and Footwear Association, and Julie Hughes, president of the U.S. Fashion Industry Association, received many questions about how they'd like the deal to be shaped. Both said they want immediate and reciprocal elimination of high duties on textiles, footwear and apparel, though Lamar noted there are some domestic sensitivities. The ITC asked him to elaborate and Lamar said there are some domestic producers of protective boots and of athletic shoes, and those producers would like their Harmonized Tariff Schedule codes to have gradual phase-outs of tariffs or keep their tariffs. Lamar said the exact number of lines has shifted over the years, from 17, to 19, to 23, but it's a small proportion of all footwear -- he said about 120 lines can have immediate tariff removal.
A routine biennial review of U.S. trade policy included sharp criticisms from longtime allies, as 19 countries took the floor at the World Trade Organization, with another 35 expected to do so before the two-day review was finished. The U.S. ambassador to the WTO, Dennis Shea, said the organization is not well equipped to handle the fundamental challenge posed by China, which continues to embrace a state-led, mercantilist approach to the economy and trade. Anticipating criticisms over America's refusal to allow any appointments to the appellate body, he said: "In our assessment, members are in the early stages of grappling with our collective failure to confront problems that have been growing for years."