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New Legislation Could Increase AD Duties, Address Digital Trade

Monday, December 16, 2013
Sandler, Travis & Rosenberg Trade Report

AD Calculations. Sens. Jeff Merkley, D-Ore., and Tammy Baldwin, D-Wis., introduced Dec. 11 the Level the Playing Field in Global Trade Act (S. 1801), which would include in the calculation of normal value in antidumping duty proceedings the cost of paying adequate wages and maintaining sustainable production methods. A fact sheet on the bill asserts that foreign “companies and countries do not pay adequate wages, uphold workplace safety standards, or maintain basic environmental controls,” which gives them a “constructed comparative advantage.” These practices are “fundamentally forms of ‘dumping’ of products,” the lawmakers state, “yet our dumping laws do not today take them into account in calculating inputs.”

In response, this bill would require the Department of Commerce to assess a duty to make up for these practices. The bill would also reward companies that meet higher standards by establishing a pre-certification and safe harbor regime in which companies could obtain a single global approval upon a showing that they and their suppliers maintain high standards everywhere they operate, allowing them to avoid any risk of litigation or delay at the border as long as they maintain those standards. Qualified third-party reviews of labor and environmental practices would be permitted, and third parties would have to meet standards for inspections, transparency, and prevention of conflicts of interest.

According to the fact sheet, these provisions would apply immediately for future trade agreements and there would be a two-year transition period for existing trade agreement partners.

Digital Trade. Sens. John Thune, R-S.D., and Ron Wyden, D-Ore., introduced Dec. 10 the Digital Trade Act of 2013 (S. 1788), which they said would establish negotiating principles to address digital trade in future bilateral and multilateral agreements. These principles include preventing or eliminating restrictions on cross-border data flows, prohibiting localization requirements for data and computing infrastructure, ensuring that provisions affecting platform Internet sites are consistent with U.S. law, and recommitting the U.S. to the multistakeholder model of Internet governance. The bill also requires the president to prioritize digital trade and ensure that it benefits from “robust and enforceable rules.”

"America’s trade negotiating objectives must reflect the fact that the Internet represents the shipping lane for 21st century goods and services,” Wyden said. “U.S digital exports are beating imports by large margins, but outdated trade rules threaten this growth by providing opportunities for protectionist policies overseas. The U.S. has the opportunity to establish new trade rules that preserve the Internet as a platform to share ideas and for expanding commerce and this legislation aims to help achieve these goals."

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