WASHINGTON — U.S. Trade Representative Robert Zoellick said Wednesday he sees “no other recourse” than to change the list of trade sanctions against the European Union should the region continue to discriminate against banana imports from U.S. companies.
Zoellick’s comments before the House Ways and Means Committee were part of a two-hour colloquy with lawmakers about the Bush administration’s wide-ranging trade agenda.
About $190 million in World Trade Organization-approved punitive tariffs are in place against a variety of EU imports. Under a so-called “carousel” provision approved last year by Congress, the list of products has to be periodically changed, but so far the law hasn’t been followed. Retailers are concerned a new list could include cashmere sweaters or cosmetics, which the current list largely excludes.
“I see no other recourse than to use the carousel provision,” Zoellick told the panel.
However, Zoellick offered somewhat of an assurance a change in the list isn’t in the wings. He said if the need for sanctions continues and the list is changed, the EU in turn is likely to carry through with its own sanctions against the U.S. over a WTO dispute about a U.S. export tax subsidy.
The trade war with the EU, which also includes disputes over hormone-treated meat and genetically modified food exports from the U.S., is one of many knotty trade issues Zoellick and others in the Bush administration are facing.
On the domestic front, the biggest trade challenge continues to be finding common ground on Capitol Hill about how agreements can help to lift labor and environmental conditions in countries with which the U.S. trades. There’s now widespread agreement among lawmakers that future trade pacts will have to address the labor-environment issue if they are going to secure congressional approval.
Zoellick said the administration is still mulling over what approach to take on labor and the environment. He said one thing that’s certain is that President Bush doesn’t want the solution to involve trade sanctions for non-compliance with labor and environment standards.
For that reason, Zoellick appears reluctant to immediately endorse the Jordan Free Trade Agreement negotiated in the Clinton administration. The pact contains requirements that local labor and environmental laws must be complied with and sanctions could be triggered if ignored.
“I have some concerns about the sanctions provisions,” said Zoellick, who said labor and environment standards have to be addressed in the “spirit of open markets” and solutions may vary. “We’ll have to approach this differently under different circumstances.”
Among the labor-and-the-environment templates Zoellick singled out for possible consideration included the latest Cambodia textile agreement negotiated under President Clinton. The pact increases the amount of apparel and textiles Cambodia can send the U.S. when labor standards show improvement.
The business community, including retailers, and apparel and textile importers, have mixed views on the inclusion of labor and environmental standards in trade agreements. However, the business lobby universally opposes any conditions triggering sanctions.
On the other side, organized labor, human rights groups and others are pressing for standards for the dual purpose of raising conditions in developing countries while preventing them from exploiting their land or workforce as competitive advantages.
Committee member Sander Levin (D., Mich.), who’s in the forefront of the labor-and-environment debate, told Zoellick the administration should send Congress the Jordan FTA for approval. In a speech the day before, Levin called the agreement “state-of-the-art” and would serve as a “first essential building block in the construction of a foundation for future trade policy.”
Zoellick also made his pitch to the committee for Congress to grant the administration fast-track trade negotiating authority. In granting the authority, Congress would agree not to amend trade agreements negotiated by the administration. Lawmakers would only vote their approval or disapproval.
The White House hasn’t had the authority since 1994 and the lack of it is seen as holding up the U.S. entering into broad trade pacts. The holdup on granting fast track is also tied to the labor and environmental standards debate, an issue that is further complicated because it doesn’t fall along party lines and thus can’t be dispatched by the Republican majority.
“Our deadlock hurts American business, workers and farmers,” Zoellick said, noting that free trade pacts like NAFTA are important for economic growth.
Absent fast track, the administration is nonetheless moving ahead with its trade agenda. Zoellick said this month the administration plans to restart free trade negotiations with Chile that started in the last months of the Clinton administration. Negotiations are also continuing for a Western Hemisphere free trade zone, also started under Clinton. Zoellick also said he’s even had preliminary discussions with Australia for a trade treaty.
In other Capitol Hill action, the House last night was poised to follow the Senate’s move on Tuesday by approving a resolution canceling new Clinton administration workplace rules designed to protect workers from repetitive motion and other stress-related musculoskeletal injuries. The business lobby opposed the regulations as being too burdensome and unnecessary, while organized labor, including UNITE, said new ergonomics rules were desperately needed. Meanwhile, Labor Secretary Elaine Chao said she plans to propose new regulations.