June 27, 2000
Statement of Lewis E. Leibowitz, Counsel to CITAC
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"Challenges in U.S. Trade Law: Process and Remedies"

Current U.S. trade law emphasizes procedures and remedies to assist producers that have to compete with import competition. In doing so, these laws ignore the legitimate interests of the companies downstream from the petitioners. For example, if textile makers obtain trade protection, the laws do not concern themselves with the effect of that protection on makers of apparel, seat covers and other downstream products. If steel producers are protected by antidumping or countervailing duty remedies, what of steel users? If lumber imports are restricted, what is the effect on home builders?

We have heard the stories of a few downstream producers during this conference. The effect downstream is always negative; usually the downstream harm is greater than the economic gains to the petitioners. That is why protectionism is harmful to the economy.

Our trade laws usually deal with this inconvenient fact by simply ignoring the effects on downstream users of the products that will be made more expensive and less available. This blissful ignorance does not make good trade policy.

I would like to emphasize the constructive role that improving procedures and remedies can play in making trade policy more rational. I will talk about four modest reforms that could ensure that consuming industries' interests are considered in making trade policy decisions.

1. Consuming industries should have standing.
2. Relief should be tailored to do minimal damage to downstream industries. This is especially true of Section 201 cases.
3. The "public interest" should be considered before relief is provided in trade cases.
4. Downstream industries should not have to pay extraordinarily high duties or prices when the products they need are not available in the United States.

We can improve the situation by making procedural reforms as outlined above. These are only first steps. Until we have awareness in Congress and the Administration of the harm that can be done in their attempts to protect U.S. industries from international competition, we must draw attention to the imbalance that characterizes U.S. trade laws and policies.