Trade Remedies and Agriculture

Publication Date: February 2002

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Agriculture, forestry and fishing; Trade

Type:

Abstract:

U.S. laws provide a variety of avenues for U.S. industries, including agricultural producers, to seek relief when they believe they have been by injured by imports or unfair trade practices. Currently, federal law provides for four primary trade remedies. Three of these safeguards, countervailing duties, and anti-dumping duties address concerns about the impacts of competing imports. The fourth remedy, commonly called Section 301, is the principal tool to challenge (under dispute settlement procedures in international trade agreements where applicable) unfair foreign trade practices that affect U.S. commerce generally, including exports to other countries.

Recent examples of prominent agricultural import cases concern cattle from Mexico and Canada; wheat from Canada; lamb meat from Australia and New Zealand; wheat gluten from the European Union; and apple juice and honey from China.

The use of trade remedies has grown along with increased U.S. involvement in bilateral and multilateral trade agreements. The availability of trade remedies is viewed as a cushion against the potentially negative impacts of trade liberalization on import-sensitive products a number of them agricultural thus helping to build broader political support for trade agreements. On the other hand, trade remedies also can have costs, to the extent that they raise import prices for U.S. consumers and processors, sustain economically inefficient U.S. producers, heighten international trade tensions, and/or increase government outlays.

A range of bills have been introduced in recent Congresses, including the 107th, to change various trade remedy laws, mostly with the objective of increasing the likelihood that domestic industries will prevail when they seek such assistance. Other bills propose tools for helping U.S. industries cope with import competition such as extending trade adjustment assistance to farmers.

Current U.S. trade remedy laws already have come under scrutiny and challenge by the United States' major trading partners. Over the next few years, the World Trade Organization will be involved in negotiations aimed at clarifying the antidumping and subsidies agreements. U.S. officials point out that these negotiations are premised on preserving the "basic concepts, principles and effectiveness of these Agreements and the instruments and objectives." Some U.S. trading partners suggest that this position is inconsistent with past U.S. opposition to discussions that examine anti-dumping practices with a possible view toward revision. Still, U.S. agricultural producers are likely to resist changes in U.S. law, and possibly to push for stronger protections, so long as they perceive foreign competitors are engaging in unfair subsidization of their own agricultural producers.