USTR Decides Against Section 301 Investigations of Israel, Dom Rep
The Office of the U.S. Trade Representative has announced decisions not to initiate two “Section 301” investigations1. The decisions are in response to separate petitions filed in May 2011 requesting investigation of alleged: (i) misconduct by the Government of Israel during the negotiation in the 1980s of the U.S.-Israel Free Trade Agreement; and (ii) expropriations without adequate compensation by the Dominican Republic, resulting in an alleged breach of the Dominican Republic’s obligations under the DR-CAFTA2, etc.
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Israel Petition Alleges Misappropriation of Business Info during 1980s FTA Negotiations
On May 24, 2011, the Institute for Research: Middle Eastern Policy (IRMEP) filed a petition alleging that in 1984, during the negotiation of the U.S.-Israel FTA, the Government of Israel misappropriated business confidential information provided to USTR and the International Trade Commission (ITC) by U.S. trade associations, companies, and industries.
Says Israel used info against U.S. industry. The petition alleges that the Government of Israel used this information to gain a systemic advantage in the U.S. market, which has diminished the profits of U.S. industry and caused the bilateral U.S. trade deficit with Israel. The petition sought a $6.64 billion settlement from the Government of Israel, to be divided among U.S. industry groups.
USTR decides complaints are outdated, not actionable, etc. USTR has decided not to initiate a Section 301 investigation in response to this petition because IRMEP lacks standing to file a petition addressed to an alleged loss of revenue by U.S. companies, only some of which it claims to represent. In addition, the petition fails to allege the existence of any act, policy, or practice of the Government of Israel that might be actionable under Section 301. Rather, it is addressed to an alleged act that occurred over 27 years ago and does not allege that any current acts, policies or practices of Israel are unjustifiable or unreasonable and burden or restrict U.S. commerce.
Dominican Rep Petition Disputes Gov’t Seizure of Personal Property in 1960s
On May 24, 2011, representatives of two individuals filed a petition requesting a Section 301 investigation with respect to alleged expropriation of their father’s property without adequate compensation by the Government of the Dominican Republic in the 1960s. The petition also alleges that the Dominican Republic has continued to take actions -- as recently as March 2011 -- that infringe their property rights.
Says DR-CAFTA obligations were breached. Among other things, they state that the Dominican Republic breached its DR-CAFTA obligations to accord “fair and equitable treatment and full protection and security” and to provide “prompt, adequate and, effective compensation,” with respect to investments covered by the DR-CAFTA.
USTR decides issues are inappropriate for Section 301, etc. USTR has determined not to initiate a Section 301 investigation for several reasons, including that the person whose property was allegedly seized was not a U.S. national and USTR is not in a position to investigate events that occurred five decades ago, well before both the enactment of the Trade Act and the entry into force of the CAFTA-DR. USTR adds that such a case could be more appropriately addressed through other mechanisms.
1Section 301 of the Trade Act of 1974 is the principal statutory authority under which the U.S. may impose trade sanctions on foreign countries that either violate trade agreements or engage in other unfair trade practices. Section 301 proceedings can either be initiated by petition or self-initiated by USTR.
2Dominican Republic-Central America-U.S. Free Trade Agreement (DR-CAFTA or CAFTA-DR).
USTR contact - Jonathan Weinberger (202) 395-0317
Dominican Republic notice (FR Pub 07/15/11) available here.
Israel notice (FR Pub 07/15/11) available here.