LAUNCHES NEW WEB SITE TO ALERT
BUSINESSES OF INCREASES IN DUTIES UNDER SECTION 301
Merriam Mashatt and Matthew Howard
INFORMATION SOURCE FOR U.S. BUSINESSES AFFECTED BY INCREASED U.S.
IMPORT DUTIES. It is the responsibility of the U.S. government
to make sure that foreign governments abide by their trade agreement
commitments. In order to accomplish this, the U.S. Trade Representative
(USTR) must at times impose penalty duties on imported products
from specific countries. This was done twice in 1999, and as a
result, the price of goods being imported by some U.S. businesses
more than doubled.
U.S. businesses with improved knowledge of impending U.S. government
actions to increase import duties, the Department of Commerce
has established an early warning mechanism called 301 Alert at
. This timely notification will provide U.S. businesses with
an opportunity to protect their economic interests by participating
in the process surrounding Section 301 decisions.
IS SECTION 301? Section 301 of the Trade Act of 1974 provides
the United States with the authority to enforce trade agreements,
resolve trade disputes and open foreign markets to U.S. goods
and services. Section 301 is the principal statutory authority
under which the United States may impose trade sanctions on foreign
countries that either violate trade agreements or otherwise maintain
laws or practices that are unjustifiable and restrict U.S. commerce.
When an investigation involves an alleged violation of a trade
agreement (such as the World Trade Organization (WTO) Agreement
or the North American Trade Agreement (NAFTA)), USTR must follow
the consultation and dispute settlement procedures set out in
that particular agreement. If the United States finds it necessary
to increase duties because of a violation of the WTO, USTR will
seek authority from the WTO's Dispute Settlement Body to suspend
trade concessions previously granted to the foreign country. Such
actions include increasing import duties. For more information
about Section 301, go to the web site trade.gov/legal/301.html
ARE DUTIES RAISED UNDER SECTION 301? USTR increases duties
on foreign country imports to respond to damage done to U.S. exports
by foreign country's unfair trade practices. One of the primary
goals of U.S. trade policy is to ensure that American businesses
and consumers fully enjoy the benefits of international trade
agreements such as the WTO. Unfortunately, there are times when
foreign governments violate trade agreements and cause considerable
harm to U.S. exporters.
first step in a Section 301 action is to request consultations
with the foreign government in order to encourage them to remove
the offending practice. In most cases, negotiations are enough
to convince the country to comply with its international obligations.
offending country may also offer compensation to the United States
in lieu of removing the unfair trade practice, which may be in
the form of lower duties on other products exported by U.S. firms
to that country.
last resort, when negotiations fail or compensation offered is
not adequate, USTR may take action, including raising import duties
on a foreign country's products.
IS THE PROCESS OF SELECTING GOODS SUBJECT TO INCREASED DUTIES?
The United States Government develops a list of products imported
from the offending country on which U.S. duties may be raised.
The interagency Section 301 Committee, which is chaired by USTR
and includes the Department of Commerce, first develops a preliminary
list of products. The two objectives are to notify
the public about the products under consideration and to minimize
the adverse impact of raised import duties on U.S. economic interests,
including importers, consumers, firms and workers. To notify the
public and to assist the government in determining the impact
on U.S. economic interests, the USTR publishes the preliminary
list in the Federal Register (FR) and includes it on its web
site. At this point in the process, the public, including firms
and workers which might be disadvantaged by the higher import
duties or restricted services, have an opportunity to provide
comments in writing and at a public hearing, the date of which
appears in the FR notice.
the Section 301 Committee reviews and analyzes all the public
comments, it develops a final list of products which can
only be drawn from the preliminary list. In developing
the final list, the Committee selects goods or services
of the foreign country in an amount that is equivalent to the
burden or restriction being imposed by that country on U.S. exporters
or other U.S. businesses. During this process, the Committee makes
every effort to minimize the potential harmful effects on U.S.
businesses and consumers.
CAN SMEs PROVIDE INPUT? The FR notice announcing the preliminary
list provides detailed instructions on submitting public comments.
Additionally, SMEs can participate in the public hearings on the
preliminary lists, which are also announced in the FR notice.
Since the U.S. Government relies heavily on public comments to
remove inappropriate items before the final list is produced,
it is imperative for SMEs to provide the most comprehensive input
DOES THE SECTION 301 ALERT HELP SMEs? The new Section 301
Alert system provides another means to notify the business community
about an impending action which may affect them. The web site,
which is free of charge, incorporates an automatic alert of pending
U.S. Government actions. Section 301 Alert contains information
on finding HTS numbers, as well as links to other site with more
in-depth information on the Section 301 law.
DOES THE WEB SITE WORK? Businesses can either visit trade.gov/301alert
regularly to determine if public comments are being sought for
impending actions, or they can join the site's automatic e-mail
service to receive updates on the following Section 301 actions:
negotiations with the country are successful, 301 Alert would
notify all registered users of the concessions and/or settlement
negotiations fail, 301 Alert sends an automatic e-mail to all
registered users informing them of the preliminary list
and the public comment period;
USTR publishes the final list, 301 Alert would immediately
notify all registered users of the final retaliation list of
products to be subject to higher duties.
information on Section 301 Alert please contact Merriam Mashatt
(202) 482-5677 or Matthew Howard (202) 482-4558.