Lighthizer Addresses Section 301, USMCA, Europe Talks in Questions From Finance Members
U.S. Trade Representative Robert Lighthizer said there's no need for more money for Section 301 exclusion adjudicators, but will assess whether additional funding is necessary as the process continues. He also said "USTR is reviewing various courses of action with respect to whether and how to renew the exclusions granted for Lists 1 and 2" in a newly released written response to one of the chairman's questions stemming from his testimony in June before the Senate Finance Committee.
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He also addressed a problem Committee Chairman Chuck Grassley, R-Iowa, brought up with the administration: Section 232 steel quotas. Grassley said companies that had received product exclusions on imports from countries with hard quotas were delaying importing the items until after the quota was filled, because they would take space for other imports not covered by an exclusion. Lighthizer did not say that more space would be saved in the quota when exclusions were imported while the quota was still open, he merely said that the excluded product can enter any time, even after the quota is filled.
Sen. Rob Portman, R-Ohio, asked how could items, such as bicycle helmets, that were removed from earlier Section 301 retaliation lists reappear on List 4. Lighthizer said he got testimony about that issue during the hearings, and said, "I will consider these comments and testimonies before taking any action on the additional tariffs."
Lighthizer responded to several constituent-level complaints such as questions about particular exclusion issues in 66 pages of questions and answers, though on broader topics, he sometimes avoided direct answers to pointed questions. For instance, committee ranking member Ron Wyden, D-Ore., asked if 5 percent tariffs on all Mexican imports could be imposed just as Congress is debating ratification of the NAFTA rewrite, and asked him to "clarify what specific action or inaction may trigger the imposition of tariffs under the immigration agreement?"
Lighthizer's reply was: "I am focused on getting the USMCA through Congress, and of course continue to fully support the President as he uses the tools available to him to address the border emergency. I recommend directing specific questions on addressing the emergency at the Southern Border to the White House."
Wyden said that due to flaws in NAFTA's state-to-state dispute chapter, "no panel has been formed since the United States blocked the formation of a panel in 2001. Can you confirm that you are willing to discuss solutions with Mexico and Canada to prevent the blocking of panels and the resolution of disputes through the dispute settlement?"
Lighthizer responded, "Yes. I believe there is room for plus ups and I am happy to work with members to define what those should be, in order for me and my team to then engage with Mexico and Canada on this issue." Wyden also asked about the resolution of a dispute centered on sales of U.S. wines in British Columbia grocery stores. Lighthizer said that B.C. amended its liquor control regulations in July. "USTR is continuing to review the amendments to assess whether British Columbia has implemented changes necessary to carry out the commitments in the USMCA side letter."
Sen. Johnny Isakson, R-Ga., asked Lighthizer how his state's fruit and vegetable growers could be accommodated since seasonality for antidumping cases did not make it into the new NAFTA. "We continue to consider the seasonality issue and explore possible solutions with Members and stakeholders. We look forward to working with you and other Members of Congress to address the seasonality issue in a way that properly considers the wide range of views and impacts across the U.S. fresh fruit and vegetable industry," Lighthizer replied.
Sen. Pat Toomey, R-Pa., asked why investor-state dispute settlement should be so restricted in the NAFTA rewrite, given how often U.S. companies have won cases in Canada and Mexico through ISDS. "The more limited availability of ISDS under USMCA reflects the Administration’s broader efforts to ensure that our trade and investment rules respect our sovereignty and the right to regulate, reduce defensive litigation exposure, and reduce or eliminate incentives to outsource production and jobs," Lighthizer said.
Senators also asked about negotiations with China. Wyden asked why the president would reverse the Commerce decision on Huawei, and said, "The Administration appears ready to give up our national security for literal peanuts." Lighthizer wrote, "As you know, Huawei is currently on the Entity List. I recommend directing any questions regarding Huawei to the Department of Commerce."
Sen. Pat Roberts, R-Kan., asked about Europe and agriculture in trade negotiations. Lighthizer said, "At this stage, we are focusing with the EU on several key impediments to U.S. exports in the EU market. The EU protects its market with high tariffs on a wide range of agricultural products and on selected industrial products. These tariffs limit U.S. exports in sectors where U.S. producers and firms are globally competitive or dominant. Members of the Committee are aware that we have not begun comprehensive tariff negotiations with the EU because the EU has not agreed to negotiate reductions in tariffs on agricultural goods, and it would not be acceptable to Congress, the Administration, or our stakeholders to conclude a tariff agreement limited to industrial trade. Despite this impasse, we continue to work constructively with the EU on non-tariff barriers that impede U.S. exports to the EU."