Trade Rep to Field Senate, House Queries; Commerce Probes Aluminum

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By Brian Flood and Len Bracken

U.S. Trade Representative Robert Lighthizer will be in the spotlight this week, testifying before the Senate Finance Committee June 21 and the House Ways and Means Committee June 22.

The newly minted U.S. trade representative will field questions on the administration’s revised and expanded trade agenda, which is expected to be released in advance of the hearings, as well as the USTR budget. That’s the official take.

And what’s on lawmakers’ minds? Renegotiating the North American Free Trade Agreement, especially in areas such as agriculture and digital trade; intellectual property protections; and enforcement issues seem to top their agendas.

The hearings come less than a week after a June 16 briefing for the Senate Finance Committee and House Ways and Means Committee was canceled. Commerce officials were supposed to brief the committees about the department’s investigation into whether steel imports pose national security threat. Two industry representatives briefed on the discussions said the White House is divided over how hard to come down on cheap steel imports.

That, too, could prompt questions from lawmakers.

“I look forward to learning more about the administration’s plans for seamlessly modernizing and upgrading NAFTA, as well as opening up other markets through the negotiation of strong new agreements,” Ways and Means Committee Chairman Kevin Brady (R-Texas) said. “I also look forward to discussing how we can more effectively enforce our existing agreements, including [World Trade Organization] rules….”

Senate Finance Committee Chairman Orrin Hatch (R-Utah), like Brady, touted the need for opening up new markets for U.S. exports. But he also homed in on one of favorite trade topics during and after negotiations for the Trans-Pacific Partnership: protecting intellectual property rights.

Lighthizer has only testified before Congress once since becoming USTR: before the House Agriculture Committee May 24. He must submit the U.S. objectives for the NAFTA renegotiations to Congress 30 days prior to the talks start, which under trade promotion rules could be as soon as mid-August.

Stay tuned!

Hartford Fire Takes Long Shot

Hartford Fire Insurance Co. will try to get sureties like itself off the hook for antidumping duties that go to private industry rather than the government ( Hartford Fire Insurance Co. v. United States, No. 09-00122, 6/20/17 ).

Hartford Fire argues it shouldn’t have to pay up when antidumping duties are distributed to domestic producers under the Continued Dumping and Subsidy Offset Act of 2000, because its bonds, in line with Customs and Border Protection regulations, only require it to cover duties that go to the government. The company will have a chance to advance its position when Court of International Trade Judge Gary Katzmann holds oral arguments in this case June 20.

The surety’s arguments are creative, but a long shot to succeed, said John Peterson, a partner specializing in international trade at Neville Peterson LLP. The court is likely to conclude that no matter what happens to the money afterward, the duties are collected by the U.S., and so still covered by surety bonds, Peterson said. However, if Hartford Fire does win, Customs and Border Protection would likely change its regulations in response, he added.

Section 232 Hearing

Steel isn’t the only metal that’s got U.S. industry up in arms. Aluminum imports also are being investigated by the Commerce Department for threats to national security, with a Section 232 hearing scheduled for June 22.

If the administration finds a national security threat, the president can raise tariffs, impose quotas or take other steps to address it.

Commerce has also initiated a separate Section 232 investigation on the effect of steel imports on U.S. national security.

Section 232 investigations are rare; one hasn’t been conducted since 2001. Before President Donald Trump, only 26 Section 232 investigations had ever been carried out in the 54 years of its existence. The last Section 232 investigation in 2001 probed the import effects of iron ore and semi-finished steel, finding no significant impact on national security.

GM Imports and Big Hitters

Industry, the public, and other parties have until June 19 to weigh in on a proposed regulatory change that would make it easier for importers to get genetically modified crops and livestock into the U.S.

The Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) is considering allowing the importation, interstate movement, and environmental release of certain genetically modified organisms without a permit if APHIS concludes that the organism doesn’t pose a plant pest or noxious weed risk.

APHIS predicts that the proposed rule would save businesses money from a reduced need to collect field data, fewer reporting requirements, and lower management costs compared to the current permitting process.

Katherine Paul, associate director of the Organic Consumers Association, which opposes the rule change, said it would benefit large agribusiness companies such as Bayer CropScience, Monsanto Co., The Dow Chemical Co., DuPont, and Syngenta.

Currently, genetically engineered organisms are required to have APHIS authorization via permit to be imported, moved interstate, or released into the environment (that is, field trials), until it can be shown that they do not pose plant pest impacts. “The proposal would change APHIS’ regulatory approach by shifting from a ‘regulate first/analyze later’ system to first assessing new GE organisms to determine if they pose plant pest or noxious weed risk to U.S. agricultural plants, before regulating through permitting such organisms,” according to an APHIS fact sheet.

To contact the reporters on this story: Brian Flood in Washington at bflood@bna.com; Len Bracken in Washington at lbracken@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

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