The European Union has taken legal action against the United States in a new trade fight that could spark further sanctions threats.

The European Commission, which looks after trade matters for the 15-nation EU, sought an investigation on Tuesday at the Geneva-based World Trade Organisation into how US antidumping duties are calculated.

"Several hundred million dollars of trade is involved," the Commission said in a statement accompanying the request for a trade panel to decide on the rights and wrongs of the case.

But the investigation, which can take at least six months, will not be launched immediately because the United States exercised its right under WTO rules for a brief delay.

However, it will be automatically triggered after the next meeting of the WTO's disputes settlement body on 19 March .

'Zeroing'

The EU is attacking a practice known as zeroing, which raises the amounts of duties countries have to pay if they are found by Washington to have dumped goods on the US market.

The Commission said products such as steel, ball bearings, chemicals and pasta were being hit by the zeroing method.

The dispute adds to several high profile transatlantic trade fights, one of which comes to a head on 1 March .

That case involves a threat of $200 million of EU sanctions on US goods unless Congress changes legislation which gives tax breaks to exporters, but which was ruled illegal by the WTO.

[Source: http://english.aljazeera.net]

Unfortunately, "dumping" is not dealt with in the WTO Treaty as well as it is under NAFTA.

Dumping is morally deplorable and any fair trading regime should have rules to prevent it. You do realize what "dumping" is, don't you, Dreamer?

Oh, and your link doesn't work. And, Al Jazeera.net likely has "ZERO" understanding on the issue. If you want to learn about it, try the wto's website or the US Trade Representative's website.

[ 02-18-2004, 09:33 AM: Message edited by: Timber Loftis ]

I assume you're talking about selling items far below market value?

Hm.. I'm just messenger here, Timber. Whenever I come across something that might be of potential interest to the people here, I post it here. I don't criticially examine everything I post, instead I prefer to trust the expertise of the journalists.

Edit: The full link is http://english.aljazeera.net/NR/exer...04A0A0050A.htm

[ 02-18-2004, 09:37 AM: Message edited by: Dreamer128 ]

I understand, Dreamer, and I certainly didn't mean to "shoot the messenger." I just didn't know how much you knew about the topic, that's all.

Of course. No offense taken [img]smile.gif[/img] To answer your question, most people here learn basic economics in high school. I took an extended version of that course, though it doesn't really cover much more then the basics. Don't be too quick to dismiss Al Jazeera on topics such as this, by the way. I admit I don't know how it is done in the middle east. But down here, many journalists that specialise in economics are pretty highly qualified. Universities usually offer short courses in journalism. And reporters who specialise in economics or politics can count on a larger pay check then their counterparts. [img]smile.gif[/img]

[ 02-18-2004, 02:21 PM: Message edited by: Dreamer128 ]

<font color="#C4C1CA">
To be precise, 'dumping' is where a company exports a product at a price that is lower than the price it normally charges on its own home market.
</font>


<font color="#C4C1CA">
There ARE rules within the WTO which allow for anti-dumping duties to be instigated by member states. Under WTO rules, the US would be allowed to add duties up to the value of the normal market price of the goods in the originating domestic market.

The crux of the issue is that US anti-dumping measures are too severe and actually end up providing US companies with an undue competitive advantage. Not only that, but they do not allow states and companies the right to challenge the measures within the WTO:

In September 2000, the WTO found the US Anti-Dumping of 1916 incompatible with the WTO agreement on anti-dumping.

This Act provides remedies to dumping in the form of fines, imprisonment and damages equivalent to threefold the damages sustained, none of which is permitted under WTO rules. As a result of this condemnation, the US had to repeal the Act, but on the third anniversary of this condemnation, the 1916 Anti-Dumping Act is still in force.

In those three years, the EU has shown its readiness to respond to the US difficulty in complying with the WTO decision.

The EU accepted the extension of the period of time within which the US was to repeal the 1916 Anti-Dumping Act (from July 2001 to December 2001). The EU requested the authorisation to apply retaliatory measures in January 2002. However, it accepted a suspension of the arbitration in February 2002, on the express understanding that a bill that had finally been introduced on 20 December 2001 to repeal the 1916 Anti-Dumping Act would terminate the on-going cases before US courts.

This bill was not even discussed in Congress, nor were two other bills introduced later and the three became void in November 2002, when the then current Congress adjourned as the result of the mid-term elections. The whole process had to restart again in the new Congress that met in January 2003. While three repealing bills are now pending, Congress has so far failed to give any signs that implementation was this time on the right tracks. Again, to date, none of the bills have been even discussed and two would not terminate the pending court cases, which is not acceptable.

Confronted with non-implementation, the WTO Member that prevailed in the dispute may seek the authorisation to suspend tariff concessions or other obligations. The EU has always considered this option as a last resort and favoured all solutions that could bring compliance. But, the persisting inaction of the US leaves the EU no other option than to exercise this right under the WTO.
<font size="1"><a href="http://europa.eu.int/comm/trade/issues/respectrules/anti_dumping/pr220903_en.htm" target="_blank">EU seeks retaliatory and protective measures in US 1916 Anti-Dumping Act dispute
</a></font>

This does not punish the wrongdoer in my opinion. Something more punitive is appropriate. I'm not saying the 1916 Act is still appropriate today, but I am saying the WTO Treaty is too weak on this issue.

A competitive advantage? Surely you jest. You mean the steel industry's competitive advantage or the seamstress unions competitive advantage? Oh, wait, those industries basically LEFT our country due to dumping (in one case) and unfairly-priced labor competition (in the other case). The WTO Treaty has some glaring holes -- there are things that should be accounted for to truly "even the field."

So long as the developed nations have to compete with the poorer nations lower prices, without being able to account for the price differences necessitated by higher labor and environmental standards, the WTO is just more global welfare. And, it plays out directly in a loss of jobs here.

[ 02-19-2004, 10:08 AM: Message edited by: Timber Loftis ]

<font color="#C4C1CA">
Well it is punitive - every time he sends his product over, he loses money on the deal without gaining the market share that dumping normally provides.
</font>

<font color="#C4C1CA">
That wasn't because of dumping but because they simply couldn't compete.

You talk about unfairly priced labour competition - other nations might equally argue that the far superior technological edge combined with the developed transport sector and educated workforce to drive the automated industries provides the US with a competitive edge with which they can not compete.

The cottage industry of X sector of bangladesh might well argue that, without the economies of scale that its US counterpart enjoys, it will never be able to compete either, leading to a loss of jobs and downward spiraling wages there.

But your point about the WTO is well made. Perhaps the US should leave the organisation if it feels that the rules are unfair (although the US govt. has never been slow to action when other nations are found to be in breach). However, I have a feeling that this will never come about as the being in the WTO brings the US far more trade than it would have without.
</font>

Just because you don't like a Treaty system doesn't mean you leave it. You renegotiate. And, hopefully, the next round of negotiation will not fail so horribly as Cancun did.

On certain externalities -- like my two big ones, labor and environment -- a "race to the bottom" is encouraged by the current WTO provisions.

Where the economies of scale make labor cheaper in Bangladesh, there is little problem -- that's economics. In fact, while it may be painful to make the transition (e.g. a generation of laborers losing jobs in the U.S.), the astute economist would argue that if something is cheaper to make in Bangladesh, the whole world maximizes economic utility by having the thing made in Bangladesh.

But, where something is cheaper to be made in Bangladesh because there are little or no labor standards, that is unfair. Rather than reward the nation that tries to use its prosperity to increase its standards, the system instead rewards the nation with the lower standards. That's the opposite of what we as a world society want, right?

So, the US can't force Bangladesh to adopt its labor standards, but it would be fair to place tarrifs on goods from Bangladesh to make up for the benefit Bangladesh gains by using lower standards. (Note: only the benefits of using lower standards, and not every other factor that may make the product's price lower when coming from Bangladesh.)

This evens the playing field. It allows a country wanting to adopt higher standards (which cost the industries money) to not have those higher standards adversely affect its product sales. This also encourages WTO countries to adopt fair labor standards of some kind to avoid the tarriff. That makes people a bit better off in Bangladesh, quality of life increases a wee bit, and we continue to advance as a global society rather than regress.

BIG NOTE: I don't know the labor standards in Bangladesh, and just used it as an example for discussion purposes.

Today's NY Times:

February 19, 2004
Edwards Calls Trade 'A Moral Issue'
By THE ASSOCIATED PRESS

Filed at 11:52 a.m. ET

NEW YORK (AP) -- John Edwards, his campaign boosted by criticism of U.S. trade policy and the loss of jobs to overseas markets, on Thursday called trade ``a moral issue'' that sets him apart from John Kerry in the race for the Democratic nomination.

``When we talk about trade, we are talking about values,'' Edwards said in a speech at Columbia University as he tried to build on a surprisingly strong second-place showing in the Wisconsin primary.

The North Carolina senator focused on the economy and jobs while campaigning in Wisconsin, largely by making the case that trade agreements like the North American Free Trade Agreement have led to a flow of high-paying jobs to China and other low-wage countries.

Edwards said he believes the same theme will work in the 10 states holding ``Super Tuesday'' primaries March 2. He is targeting Georgia, Ohio and the industrial regions of upstate New York.

While Kerry has been critical of the way free-trade deals have been carried out, the Massachusetts senator voted for them, setting the stage for the loss of jobs in the United States, Edwards said.

``There is no question that our current trade policies are good for the profits of multinational corporations,'' he said. ``They are good for some people in the financial sector here in New York City -- not all, but some.''

Edwards walks a fine line between waging an upbeat and positive campaign -- a pledge for which he has gained voter support -- while pointing out differences with Kerry.

``When it comes to bad trade agreements, I know what they do to people,'' he said. ``I have seen it with my own eyes what happens when the mill shuts down.''

Edwards, whose father worked at a mill in North Carolina, said he has a better understanding than Kerry of blue-collar issues. He told his college audience Thursday that his disagreements with Kerry extended well beyond NAFTA and include many trade agreements he has opposed.

``Those trade deals were wrong,'' he said. ``They cost us too many jobs and lowered our standards.''

As he pushed forward into the March 2 round of voting, Edwards was forced to set aside precious campaign time to raise money. He attended a fund-raising event in New York and was heading to Florida on Thursday for another.

The difficulties Edwards faces in exploiting the trade issue were underscored Thursday when the AFL-CIO endorsed Kerry, a signal that key segments of the party establishment think the nomination fight is essentially over.

Edwards said that while union leaders may be coalescing behind Kerry, he is winning the battle for rank-and-file members who face the daily pressures of jobs losses.

``I've done extraordinarily well among union households,'' he said. ``If you look at what's happened in the early primaries, I have not had the endorsement of labor unions and I've done very well. I will continue to speak directly to union households and working people.''

Although Edwards said he had strong support in union households, exit polls conducted for The Associated Press showed that such voters tended to support Kerry by narrow margins in Iowa and Wisconsin and by substantial margins -- from 20 to 40 percentage points -- in Missouri and Delaware.

The exit polls were conducted for the AP and television networks by Edison Media Research and Mitofsky International.

<font color="#C4C1CA">
Benefits??? Like poor quality housing, bad school coverage, little in the way of public services, rare health coverage, low standards of health and low life expectancy etc. etc.? Taht's what they get out the deal now - and you call that benefits?

But perhaps the comparison between the US and a third world country is a bit too stark - let's make the comparison fairer, say between, the US and the EU/Japan. The EU has HIGHER standards than the US in almost every field, whether it is labour regulations or environmental standards - all of which both industry and workers have to pay for.

Now your argument is in reverse. Would it be fair to make the US pay additional tarrifs to make up for the benefits that the US gains by adopting lower standards? How about an environmental tax on all US steel imports - since the US has refused to implement Kyoto treaty standards? And ditto for Japan?
</font>

You used semantics to turn a very logical argument on its head. The "benefits" are the "economic benefits" of price reduction.

If you think the EU has higher standards than the US, you've got your wires crossed. Now, I'm not too versed in the labor differences, but on the environmental side, say what you will, but we've got the strictest standards there are. You guys don't even have a CERCLA/Superfund analog as far as I can tell.

Yes, that's exactly what I'm saying. Of course, only the nations that actually HAVE committments under Kyoto would be eligible to apply such a tarriff. ;)

Oh, and ONLY to the extent it is necessary to make up the fraction of price avoided by not limiting CO2 emissions. Again, my notion is a narrow one.

<font color="#C4C1CA">
Considering that the Cercla fund was set up to clean up abandoned hazardous waste sites (there are **NONE** in the EU) and provide a fund in case that liability could not be confirmed, it would be pointless to have such a fund.

This is not a control - it is firefighting an existing US problem - one not shared by the EU.

If you want REAL environmental controls, take a look at the EU's Registration, Evaluation and Authorisation of Chemicals legislation (effective 01/01/2004) - which puts the emphasis on industry to PROVE FIRST that their products are safe (both for the environment and user) rather than the other way around (as is the case in the US), and attempts to remove the most hazardous chemicals out of production.
</font>

[ 02-20-2004, 11:30 AM: Message edited by: Skunk ]

I'm not up on trade law or industrial law, but Skunk, do you realize that requiring an industry to prove that a product is safe is the equivilent of trying to proove that it does not harm and prooving a negitive is logically impossible? If the EU is taking that stance, it just sounds like political fluff to make it appear that they are taking care of the ingorant unwashed masses while business continues as normal. I know, I'm cynical. ;)

Prooving something is harmful is possible, though, sometimes the timeframe to proove it though is very very long.

Really? [img]graemlins/biglaugh.gif[/img] I remember noticing many likely abandoned sites when I was in London. Guess I was mistaken.

Or you are:

http://www.cfg-lawfirm.com/articles/barnett1.html

The EU employs no retroactive liability mechanism. The EU generally does not use criminal law to enforce environmental law.

I know of a French company that found out it had contamination on a property here and thought it could just walk away from it or bankrupt the holding company. I had to say, "Nooo, it doesn't work like that here." I know of a Russian company that intended to.... wait, I better not say, it's specific enough you could find out who they are. [img]graemlins/angel.gif[/img] I'm also aware of several lead-acid battery facilities, lead smelters, ironworks, and power plants in the EU that absolutely must be contaminated based on historical operations. I'm pretty sure Europe made manufactured gas around the turn of the century as well, and that industry necessarily had to be located in each small area of the countries and tended to leave truly horribly toxic contaminants that "sink" into the ground and then spread through groundwater.

While I appreciate the new law placing the burden of proof of safety on the chemical producers, I note we have similar systems over here under the Toxic Substances Control Act and the Federal Insecticide Fungicide and Rodenticide Act. RCRA also requires cradle to grave management of hazardous waste (including having to dispose of it at a specially-permitted site) and EPCRA requires you to report every speck of hazardous waste you "release" (i.e. send out for disposal) to the federal government annually by March 1 (I'm helping some clients with this currently). And, most of these laws allow for civil enforcement -- meaning each citizen impacted by breaking environmental laws may step in as "mini attorneys general" and sue the company to enforce the law -- I think in the EU if the regulators turn a blind eye the citizen has no recourse other than tort remedies.

Look, I respect the efforts EU countries have undertaken in the past decades in environmental law. But, you must understand in most respects the US is far more advanced and strict. There are exceptions: for instance, our agriculture industry practices are not as well regulated (though resulting contamination is).

The one problem I have, though, is your statement I quoted above. It's the sort of thing that ruins your credibility, and makes me roll my eyes. It's almost not worth my time telling you how wrong you are.

I wasn't just making shit up. I was relying on what I'd been told by environmental experts from all over Europe I've worked with, including czech regulators, instructurs at the College of Europe, environmental attorneys in London firms, and international environmental law experts I worked for when interning with FIELD in London.

[ 02-20-2004, 02:54 PM: Message edited by: Timber Loftis ]

Back on topic, I note The Economist disagrees with me that "job migration" is a worry.

ARTICLE

However, this article does not address my most important hack, the simple application of adjustment measures contained in the WTO/GATT to account for environmental and labor externalities. Of course, the Economist likely has addressed it at some point, but I haven't seen it. I am PRO free trade generally, but I think the very sensible exceptions contained in article XX of the WTO/GATT (and the side agreements expanding upon the ideas, such as the Sanitary/Phytosanitary ["SPS"] Agreement) have been WAY TOO NARROW.

For instance, if something will affect health, the SPS Agreement says you can place tarriffs or restrictions on it. When the UK tried to do this with beef hormone, the WTO wouldn't let it because it could not affirmatively prove harm. You mentioned the new law requiring "proof of no harm," skunk -- the WTO ruling against the UK in Beef Hormone was decided based on the exact opposite burden of proof, and that's a problem that nearly hamstrings the SPS Agreement.

[ 02-20-2004, 03:50 PM: Message edited by: Timber Loftis ]

Back off topic for a minute and onto the abandoned hazardous waste sites thing. I think there is a distinction between what the 2 of you are debating. In Australia (and I believe in Europe) a hazardous waste site would be one that is set up for the storage of hazardous wastes, or one on which hazardous wastes have been illegally stockpiled and dumped. This is distinct from a contaminated industrial site, which is the ex location of a factory or business that has departed the scene and is required by law to meet certain remediation standards on departure.

You may be talking apples and oranges on this one guys.

Another good story about the job trends in the USA can be found HERE.

We may have a semantics problem, but we do actually disagree on this one. The US is not as environmentally impacted as Europe -- it's that simple. It has not been inhabited as long, the air and water are cleaner, etc. Just a fact. Europe has had a lot of different polluting phases of history to experience. Did you know one of the biggest red flag enviro problems is "UXO" or "unexploded ordinance." I think this would be an issue in Europe. The former soviet block countries just dumped crap everywhere -- that's what a czech regulator tells me.

But, yes, Davros you are right that there are different sites. There are sites containing historical contamination (CERCLA addresses these), sites where hazardous substances are stored for use (RCRA imposes rules on these), and sites where hazardous substances are disposed of (RCRA permits these sites and imposes a cradle-to-grave manifest system on every unit of waste to track proper disposal). A particular piece of property may be one or two or all three types of sites.

I've seen the compliance practice in the US (which I actually am a professional in and have been since 2000) and I've inquired as to the compliance practice in other countries, and on most fronts it's a bit stricter here. I'm not euro-bashing, I'm just pointing it out.

[ 02-21-2004, 02:53 PM: Message edited by: Timber Loftis ]

Well there are a couple of things you have stirred me to add TL. Firstly I would like to say that I wasn't actually taking a side in this debate - just pointing out that you guys look to be arguing different points rather than the same one ;) . Secondly I am D2, and a completely different corporeal identity to D1 :D Thirdly I am not exactly sure that we do actually disagree (so I think you may be wrong there ;) ).

Related article:
EU to pass "polluter pays" bill

European Union MPs and governments have agreed to introduce new legislation to make companies pay for the cost of cleaning up the environmental damage they cause. Not all EU countries currently apply the principle that the polluter pays, with legal discrepancies most marked in southern Europe.

However, the Euro MPs failed to convince member states to require companies to take out insurance against environmental damage. Instead, the European Commission is to put forth proposals aimed at setting up a uniform environmental insurance system.

Sorry, mate. Brain thought "X" but fingers typed "Y." At least in my mind I knew which hemishperical "D" you were. [img]graemlins/heee.gif[/img] Actually, by "we" I meant me and Skunk.

Here again, I'd like to highlight a difference. "Polluter pays" is a bedrock theme in environmental law, first established and almost always followed by US Laws. However, the real question is what if the polluter is bankrupt? Or what if the polluter went bankrupt 30 years ago and doesn't exist anymore?

The US law deals with this by imposing strict liability on the current owner, regardless of fault. Yep, you read that right. The notion is that the social benefits of cleaning up the property are so important, it's worth hanging the albatross of cleanup costs around the neck of an INNOCENT party.

Of course, there's also the notionn that if you purchased property without investigating for past contamination, you are NOT innocent. ;) So, this draconian rule does contain an "out." If you thoroughly investigate a property and do not find the past environmental impacts, you can actually get "off the hook," but a good investigation almost always discovers past impacts.

And, what of the current owner being treated unfairly? Well, it ain't all about fairness in environmental law. Now, if the current owner wants he can bring the past operator (the polluter) into the picture and pass the costs on to them (the basic "polluter pays" principle), but where there's no one to "pass the buck" to, tough luck pay up. [img]graemlins/deal.gif[/img]

Anyway, just a further note as to the differences.

Back on topic, the EU has begun sanctions as of today:
http://news.bbc.co.uk/2/hi/business/3521731.stm

although I daresay, it will be a few months before the US job market begins to feel the pinch...

Whereas Airbus gets its "leg up" through a simple government subsidy. To-may-to, to-mah-to.

Just do what they do with Airbus -- subsidize. :D Ooooops, that's not very "PC" in America, is it? It makes it too obvious that it's a governmental handout to business, doesn't it? Corporate tax breaks okay, subsidies no way! Duh, same = same. [img]graemlins/noevil.gif[/img]

How the hell have I got involved in this?

:D

[ 03-01-2004, 12:14 PM: Message edited by: Donut ]

I dragged you in with a clever bait. :D