June 20, 2000

By Bruce Odessey
Washington File Staff Writer

Washington -- U.S. Trade Representative Charlene Barshefsky says her office is not yet ready to revise its list of tariffs imposed on European Union (EU) imports in retaliation over unresolved trade disputes on bananas and beef.

Answering reporters' questions after June 20 Senate subcommittee testimony, Barshefsky said that in the public comment period ended just June 16 the Office of the U.S. Trade Representative (USTR) received more than 400 sets of comments from Congress and industry on proposed revisions.

Although the statutory deadline for revising the sanctions passed June 19, she said her office will thoroughly review all the comments before taking action.

Congress passed the "carousel" provision requiring periodic revision of retaliatory tariff lists as part of the Africa-Caribbean trade bill that President Clinton signed into law in May.

Except in certain circumstances, it requires USTR to change twice a year the goods subject to retaliatory tariffs in cases when a losing party fails to implement a World Trade Organization (WTO) dispute settlement ruling in favor of the United States -- as in the bananas and beef hormones cases.

In her testimony before the Senate Finance trade subcommittee, Barshefsky said that although she opposed the carousel provision, she accepts it, acknowledging frustration in Congress over the bananas and beef cases.

She said the EU's failure to implement WTO decisions injures the global trading system from which Europe benefits so much.

"It hurts the credibility of the WTO and of the WTO dispute settlement process as the impartial adjudicator of claims," Barshefsky said. "It emboldens other countries to consider similar feats of non-compliance, which is extremely damaging to the system.

"It impacts negatively public confidence on the global trading system -- a dispute settlement process viewed as somehow secretive and countries themselves ignoring the outcome," she said. "It's bad in every way."

The EU requested June 5 consultations in the WTO over the carousel provision, which its representative in Geneva argued violates the WTO's Dispute Settlement Understanding because such retaliation is not approved by WTO members.

On another issue, Barshefsky told reporters that she urged Senate Majority Leader Trent Lott June 19 to schedule a vote as soon as possible on permanent normal trade relations with China.

"Every day of delay damages fundamental interests of the United States, both economic and strategic," Barshefsky said.

The U.S. House of Representatives passed such legislation in May after a long, divisive debate.

"There is no reason to delay the vote," Barshefsky said, citing strong bipartisan support for the bill.

Later June 20 Republican Lott told reporters that the Senate was likely to vote on China trade before its month-long summer recess in August and September, but not likely before the week-long July 4 recess.

Lott announced no date for the China vote. He reiterated his intention for the Senate to pass a number of government spending bills before turning to China.

Senate supporters are attempting to pass the House-passed version unamended so that no further House action is required.