Washington, D.C.   -  {Today, U.S. Reps. Artur Davis (D-Ala.) and Phil English (R-Pa.) unveiled bipartisan legislation to fix a longstanding inequity in U.S. trade law and expand American employers’ ability to obtain trade relief.  H.R. 1229, the Nonmarket Economy Trade Remedy Act of 2007 would require application of countervailing duty law to both market and nonmarket economies, including China.

“If we hope to promote the virtues of trade in a global economy to people in this country, we have to show them that we are putting forth our best effort to level the playing field with our trade partners,” said Davis, whose district is heavily dependent on impacted industries including steel, timber and catfish. “This not only protects American jobs, but also provides leverage for us to enter currently closed or overly subsidized markets all over the world.”

“Today, we are introducing bipartisan legislation that will finally put an end to a major obstacle for employers seeking relief from illegally subsidized imports from nonmarket economies,” said English, a member of the House Ways and Means Committee, which has jurisdiction over trade policy.  “For too long our countervailing duty law has been ambiguously interpreted at the expense of domestic employers.  Our legislation will remove that historical and inexplicable inequity and ensure American employers have access to all of the tools in our trade remedy arsenal.”

Senator Evan Bayh (D-Ind.) joined the House lawmakers in a press conference call today and expressed his support for the initiative as well as his intention to introduce similar trade legislation in the Senate with Senator Susan Collins (R-ME).

“I’ve met with many Hoosier manufacturers during my trips home who tell me about products they’ve seen from Chinese companies that cost less than the materials used to make them,” Senator Bayh said.  “That’s not right.  Our legislation will stop the legal hairsplitting and help level the playing field for American workers.  It’s a common sense solution that both Democrats and Republicans can support, to ensure that our workers and companies can succeed in today’s global economy.”

U.S. employers and workers are increasingly faced with similar unfair trade competition from subsidized Chinese imports.  Domestic companies choosing to challenge subsidies in nonmarket economy countries have been precluded from doing so by previous assertions by the Department of Commerce (Commerce).  These assertions, made in 1984, have been made irrelevant by events since then, including China’s accession to the World Trade Organization (WTO), adoption of the WTO Agreement on Subsidies and Countervailing Measures, and the adoption of more specific definitions of subsidies in the WTO.  What has not changed since 1984, however, is the striking inequity which non-application of countervailing duty law to nonmarket economy countries has presented for American employers.

The Nonmarket Economy Trade Remedy Act of 2007 would correct this inequity by amending Title VII of the Tariff Act of 1930 to explicitly require Commerce to accept CVD cases against nonmarket economies.  In addition, H.R. 1229 would create a new mechanism in which congressional approval would be required to implement a decision by Commerce to “graduate” a country to market economy status.  Finally, the measure would direct the International Trade Commission (ITC) to conduct an annual study of Chinese government intervention to promote investment, employment and exports.  The ITC would be directed to submit its findings to Congress every year through 2017.

“Right now China gets to have it both ways,” Davis said.  “They are dramatically under pricing their products and selling them in the United States while limiting our ability to gain a larger market share for certain products in their country.  Now is the time to work towards a trade policy that is based on trust, fairness, and future prosperity for both countries.  This legislation gets us closer to that goal.”

**Summary of H.R. 1229, the Nonmarket Economy Trade Remedy Act of 2007 follows:

H.R. 1229, The Nonmarket Economy Trade Remedy Act of 2007

Application of Countervailing Duties to Nonmarket Economy Countries;
 Role of Congress in Revoking Nonmarket Economy Status;
 and Study on Subsidies by People’s Republic of China

Application of Countervailing Duty Law to Imports from Nonmarket Economy Countries and Strengthening Application of the Law

1. Provides that countervailing duty law shall be applied to illegally subsidized and injurious imports from nonmarket economy countries. 

2. Requires the use of “alternate methodologies” to calculate the amount of the countervailing duty with respect to imports from China.  These alternate methodologies are based on the terms and conditions that China accepted when it acceded to the World Trade Organization.

Revocation of Nonmarket Economy Country Status

Provides that a determination by the Department of Commerce to revoke a country’s status as a nonmarket economy under U.S. antidumping law must be approved by Congress.  Congressional approval takes the form of a joint resolution to be considered under an expedited procedure and without an opportunity for amendment.

Study and Report on Subsidies by People’s Republic of China

1. Requires the U.S. International Trade Commission (the “Commission”) to conduct a study regarding how the People’s Republic of China uses government intervention to promote investment, employment, and exports.

2. Provides that the Commission shall submit a report on the study, and an annual update of the report, to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate.  The report also shall be made available to the public.

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