Trade Remedies and Agriculture

CRS Report for Congress
Trade Remedies and Agriculture
February 22, 2002
Geoffrey S. Becker and Charles E. Hanrahan
Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Trade Remedies And Agriculture
U.S. laws provide a variety of avenues for U.S. industries, including agricultural
producers, to seek relief when they believe they have been by injured by imports or
unfair trade practices. Currently, federal law provides for four primary trade
remedies. Three of these – safeguards, countervailing duties, and anti-dumping duties
– address concerns about the impacts of competing imports. The fourth remedy,
commonly called Section 301, is the principal tool to challenge (under dispute
settlement procedures in international trade agreements where applicable) unfair
foreign trade practices that affect U.S. commerce generally, including exports to other
Recent examples of prominent agricultural import cases concern cattle from
Mexico and Canada; wheat from Canada; lamb meat from Australia and New Zealand;
wheat gluten from the European Union; and apple juice and honey from China.
The use of trade remedies has grown along with increased U.S. involvement in
bilateral and multilateral trade agreements. The availability of trade remedies is
viewed as a cushion against the potentially negative impacts of trade liberalization on
import-sensitive products – a number of them agricultural – thus helping to build
broader political support for trade agreements. On the other hand, trade remedies
also can have costs, to the extent that they raise import prices for U.S. consumers and
processors, sustain economically inefficient U.S. producers, heighten international
trade tensions, and/or increase government outlays.
A range of bills have been introduced in recent Congresses, including the 107th,
to change various trade remedy laws, mostly with the objective of increasing the
likelihood that domestic industries will prevail when they seek such assistance. Other
bills propose tools for helping U.S. industries cope with import competition – such
as extending trade adjustment assistance to farmers.
Current U.S. trade remedy laws already have come under scrutiny and challenge
by the United States’ major trading partners. Over the next few years, the World
Trade Organization will be involved in negotiations aimed at clarifying the
antidumping and subsidies agreements. U.S. officials point out that these negotiations
are premised on preserving the “basic concepts, principles and effectiveness of these
Agreements and the instruments and objectives.” Some U.S. trading partners suggest
that this position is inconsistent with past U.S. opposition to discussions that examine
anti-dumping practices with a possible view toward revision. Still, U.S. agricultural
producers are likely to resist changes in U.S. law, and possibly to push for stronger
protections, so long as they perceive foreign competitors are engaging in unfair
subsidization of their own agricultural producers.

Introduction ................................................... 1
Types of Trade Remedies and Trade Relief............................2
......................................................... 2
Safeguards (Escape Clause)....................................2
Safeguard Procedures.....................................2
Trade Obligations........................................3
Countervailing and Antidumping Duties...........................3
CVD and AD Procedures..................................4
Trade Obligations........................................5
The “Peace Clause” and CVD..............................5
Section 301................................................6
Trade Obligations........................................6
Former Agricultural Trade Remedies.............................7
Choice of Trade Remedy..........................................7
Agricultural Cases...............................................8
Safeguard Actions...........................................8
European Union Wheat Gluten..............................9
Australia and New Zealand Lamb Meat......................10
Countervailing and Anti-Dumping Duties.........................11
Section 301...............................................13
Recent Policy Developments......................................15
Byrd Amendment...........................................16
“Carousel” Retaliation.......................................16
Other Proposals to Change Current Trade Remedy Laws.............17
Agriculture in Trade Promotion Authority Legislation...............17
Trade Adjustment Assistance for Farmers........................18
Concluding Observations.........................................20
Appendix A. Dispute Settlement in Trade Agreements..................22
WTO Uruguay Round Agreements.............................22
North American Free Trade Agreement..........................23
Chapter 20 Dispute Settlement.............................23
Settlement in Anti-dumping and Countervailing Duty Cases.......23
Appendix B. Antidumping and Countervailing Duty Cases for Food and
Agricultural Products Initiated Since January 1, 1980...........25

Trade Remedies and Agriculture
U.S. laws provide a variety of avenues for U.S. industries, including agricultural
producers, to seek relief when they believe they have been injured by the effects of
trade. Trade remedies, the primary means of such relief, are designed to counter the
economic effects on U.S. producers of imports sold in the United States at unfairly
low prices or of exports that benefit from a foreign government’s domestic or export
subsidies. They might also be sought to reduce the impacts of surges in fairly-traded
The use of trade remedies has grown along with increased U.S. involvement in
trade agreements. Trade relief is viewed as a cushion against the potentially negative
impacts of trade liberalization on import-sensitive products – a number of them
agricultural – thus helping to build broader political support for trade agreements.
U.S. trade remedy laws generally reflect and are subject to international trade
rules, notably those under the World Trade Organization (WTO) multilateral
agreements and the North American Free Trade Agreement (NAFTA).1 On the one
hand, other countries, utilizing various WTO and NAFTA rules and procedures, can
and do challenge the legality of some U.S. actions taken under its trade remedy laws.
On the other hand, when such U.S. laws are applied in conformity with the
international trade rules, WTO and NAFTA dispute settlement procedures can serve
to validate and strengthen any U.S. actions taken. In addition, U.S. producers,
working through U.S. trade officials, might also tap WTO and NAFTA to resolve
trade issues on a consultative or other lower-profile basis before they escalate into
more costly, contentious cases involving hearing panels, appeals, sanctions, and the
like. (Appendix A describes provisions and procedures on dispute settlement under
the WTO and NAFTA.)
Some prominent examples where segments of U.S. agriculture have formally
sought import relief in recent years include cattle imports from Canada and Mexico;
wheat imports from Canada; lamb meat imports primarily from Australia and New
Zealand; wheat gluten from Europe; and apple juice and honey from China, among
others. As U.S. producers of these items have found, the procedures for pursuing

1Cooper, William H., CRS Report RL30461, Trade Remedy Law Reform in the 107th
Congress. Trade remedies are discussed extensively in Overview and Compilation of
Trade Statutes, 1997 edition, June 25, 1997, Committee Print WMCP 105-4, 105 Congress,st
1 session, Committee on Ways and Means, U.S. House of Representatives; and in Summary
of Statutory Provisions Related to Import Relief, U.S. International Trade Commission
Publication 3125, August 1998.

trade remedies are somewhat complex, resource-intensive, and time consuming.
Winning a case is even more difficult.
Types of Trade Remedies and Trade Relief
Currently, federal law provides for four primary trade remedies. Three address
import concerns: safeguards (or escape clause), antidumping duties (AD), and
countervailing duties (CVD). The fourth, commonly called Section 301, is the
principal tool to challenge unfair foreign trade practices that affect U.S. commerce
generally, including exports to other countries.
Safeguards (Escape Clause)2
The Trade Act of 1974 provides for the imposition of temporary duties, quotas,
or other restrictions on imports that are traded fairly but which cause or threaten to
cause injury to a domestic industry. The U.S. International Trade Commission (ITC)
makes the determination of injury. This provision is intended to provide relief from
injurious competition when temporary protection will enable the domestic industry to
make adjustments to meet the competition from imports. Also, unlike antidumping
and countervailing duty cases (see below), safeguard cases encompass imports from
throughout the world, not specific countries.
Safeguard Procedures. Safeguard procedures can be invoked by petition
from affected parties (an association, industry group, or other organization),
Presidential request, request of House Ways and Means or Senate Finance
Committees, or the ITC's own initiative. Industry petitioners are encouraged to
submit, along with their petition, a plan to promote positive adjustment to the
competition from imports.
During the course of its investigation of the petition or request, the ITC must
take into account all relevant economic factors, including certain specific factors
enumerated in the statute and must consider the condition of the industry over the
relevant business cycle. If the ITC determines that imports have been a “substantial
cause” of “serious injury” or the threat thereof to the industry, it recommends
remedial measures which must include an increase in tariffs on the imported product,
a tariff-rate quota (TRQ), a quantitative restriction, adjustment measures, or a
combination of those measures.
The ITC submits its recommendations to the President, who decides whether or
not to impose the import restrictions. In making a decision about what action is
appropriate, the President must consider such factors as the industry’s adjustment
plan, the plan’s probable effectiveness to promote positive adjustment, other factors
related to the national economic interest, and the national security interest. The
President can impose safeguards for an initial period of up to 4 years and may extend
the action one or more years, but the total period or import relief may not exceed 8

2Legislative authority: Sections 201-204 of the Trade Act of 1974, as amended (19
U.S.C.2251-2254), and/or Sections 302-307 of the NAFTA Implementation Act of 1994.

years. The President must report to Congress the actions he plans to take. Should
the President decide to take actions other than those recommended by the ITC or to
take no action, Congress may direct him to implement the recommendations of the
ITC by enacting a joint resolution of disapproval of his proposed action.
Trade Obligations. Safeguards must be applied in conformity with the
Agreement on Safeguards agreed to during the Uruguay Round of multilateral trade
negotiations. This WTO agreement provides rules for the application of Article XIX
of the General Agreement on Tariffs and Trade (GATT, 1947).3 Rules negotiated in
the Agreement provide for greater transparency in procedures and limitations on the
duration of relief measures. Expanding on Article XIX, the Agreement provides that
a WTO member country may not exercise its right to take retaliatory action during
the first 3 years that a safeguard is in effect, provided that the safeguard measure
resulted from an absolute increase in imports and otherwise conforms to the
U.S. obligations under NAFTA also affect the use of safeguards vis-a-vis Canada
and Mexico. Chapter 8 of NAFTA provides, among other things, that escape clause
measures against NAFTA members generally last no more than three years. Section
311 of the NAFTA Implementation Act (P.L.103-182, 19 U.S.C. 3371) provides that
a relief action is not to apply to imports from Canada or Mexico unless they account
for a substantial share of total imports of a good.
Countervailing and Antidumping Duties4
Trade law provides also for the imposition of countervailing duties on goods
imported into the United States if the Department of Commerce (DOC) determines
that a countervailable subsidy is being provided by a foreign government and if the
ITC determines that the imports are causing or threatening to cause material injury
to a U.S. industry. The purpose of CVD law is to offset any unfair competitive
advantage that foreign manufacturers or exporters might have over U.S. producers
because of foreign countervailable subsidies. Countervailable subsidies could include
a wide range of practices such as export subsidies, import substitution subsidies, and
domestic subsidies provided to a specific industry or to inputs used by an industry.

3Article XIX, which was not changed by the Uruguay Round Agreement on Safeguards, reads:
“If, as a result of unforseen developments and of the effect of the obligations incurred by a
contracting party under this agreement, including tariff concessions, any product imported into
the territory of that contracting party in such increased quantities and under such conditions
as to cause or threaten serious injury to domestic producers in that territory of like or directly
competitive products, the contracting party shall be free, in respect of such product and to the
extent and for such time as may be necessary to prevent such injury, to suspend the obligation
in whole or in part or to withdraw or modify the concession.”
4Legislative authority: CVD, Subtitle A, Title VII of the Tariff Act of 1930, as amended (19
U.S.C. 1671); AD, Subtitle A, Title VII of the Tariff Act of 1930, as amended (19 U.S.C.
1673). Also, the Continued Dumping and Subsidy Offset Act of 2000 (the “Byrd
Amendment”) requires AD and CVD duties to be disbursed to injured domestic producers in
the cases. Attached are information on the amendment and a list of agricultural recipients in

Trade law also authorizes antidumping duties on imported goods if the DOC
determines that an imported product is being sold at less than its fair value, and if the
ITC determines that a U.S. producer is thereby being injured. Dumping is a form of
price discrimination whereby goods are sold in one export market at prices lower than
the prices of comparable goods in the home market or in other export markets.
CVD and AD Procedures. Although CVD and AD laws are aimed at
different forms of unfair trade, they are similar procedurally and substantively. CVD
and AD investigations may be initiated by the DOC or by an interested party.
Interested parties may be a manufacturer or producer; a union or group or workers
representative of the affected industry; a trade or business association; a coalition of
firms, unions, or trade associations; or a coalition or trade association, representative
of processors or, in the case of processed agricultural products, processors and
growers. Petitions are filed simultaneously with the DOC and the ITC. If the DOC
decides the petition is legally sufficient to commence an investigation, one is initiated
with respect to imports of a particular product from a particular country.
The ITC makes a preliminary determination as to whether there is a “reasonable
indication” that imports in question are causing or threaten to cause material injury
to the industry. An affirmative decision allows the investigation to proceed; a
negative decision terminates the investigation.
The DOC then must make a preliminary determination whether dumping or
subsidies have taken place and, if so, make a preliminary calculation of what the
dumping or subsidy margin would be. Regardless of whether the DOC's preliminary
determination is positive or negative, the DOC continues the investigation and makes
a final determination of dumping or subsidies and a final calculation of duty margins.
The investigation is terminated if DOC makes a negative final determination. In the
event of an affirmative final determination, then the ITC continues its investigation
and renders a final determination of material injury or threat thereof. A negative ITC
determination terminates the investigation. If the two final determinations are
affirmative, then extra duties are placed on imports to be paid by the importer. The
determinations are subject to judicial review and also may be challenged in the WTO
dispute settlement mechanism.5
Both the DOC and the ITC must take into account a number of criteria in
making their respective determinations. In CVD cases, the DOC must consider
evidence of direct subsidies or upstream subsidies (subsidies provided to inputs the
benefits of which are passed on to the final producer); if found, the DOC must
determine what would be the net countervailable subsidy. In AD cases the DOC must
first determine the “normal value” of the import (based on the price in the exporting
country's home market, on the price of the export of the product to a third country
market, or on a “constructed” price, depending on the availability of data). The DOC
must compare the “normal value” with the actual price of the import in question to

5The Continued Dumping and Subsidy Offset Act of 2000 now requires the U.S. Customs
Service to redistribute duties collected under AD and CVD orders to affected domestic parties,
and agricultural petitioners have been receiving such monies. See “Byrd Amendment”
discussion on page 15.

determine whether dumping is taking place and, if so, what the dumping margin is.
In either procedure, the ITC must make two determinations: (1) Is the domestic
industry being materially injured or facing a threat of material injury? (2) Are the
imports in question a cause of the material injury? U.S. law establishes time frames
within which the respective agencies must make their determinations.
Trade Obligations. As in the case of safeguards, AD and CVD actions must
be applied in conformity with trade agreements entered into by the United States, in
particular, the Tokyo Round Subsidies Code, the Uruguay Round Agreement on
Subsidies and Countervailing Measures, and the NAFTA. The “peace clause” (see
below) in the Uruguay Round Agreement on Agriculture (URAA) has particular
relevance for the use of countervailing measures for agricultural products.
In the Tokyo Round of multilateral trade negotiations (1973-1979), a subsidies
code governing the use of subsidies and countervailing measures was negotiated and
signed by the United States. The code provided for improved procedures for
notification, consultation, and dispute settlement and application of remedial measures
or countermeasures through the dispute settlement process. Under the code,
countries could take traditional countervailing duty actions to offset subsidies upon
showing material injury to a domestic industry because of subsidized imports. The
code also sets out criteria for determining material injury.
During the Uruguay Round, an Agreement on Subsidies and Countervailing
measures was concluded that goes beyond the Tokyo Round Subsidies Code and
applies to all WTO member countries. (Only GATT member countries that had
signed on to the Tokyo Round subsidies code were bound by it.) This Agreement
provides, among other things, definitions of such terms as subsidies and serious
prejudice for the first time in a GATT agreement; prohibits export subsidies based on
the use of domestic instead of imported goods; requires most developing countries to
phase out export subsidies and import substitution subsidies; and applies the WTO
dispute settlement mechanism (which prevents subsidizing governments from blocking
the adoption of unfavorable panel reports) to countervailing and antidumping cases.
In NAFTA, Chapter 19 permits final determinations in CVD and AD cases
involving another member’s goods to be reviewed by binational panels rather than
domestic courts, if requested by a NAFTA partner.
The “Peace Clause” and CVD. Article 13 of the URAA, commonly
referred to as the peace clause, is an agreement among WTO countries to refrain from
challenging certain of each other’s agricultural subsidy programs in domestic
countervailing duty proceedings during a 9-year period, 1995 through 2003. (The
peace clause applies also to other WTO dispute settlement proceedings in situations
where countries might allege “adverse effects,” “serious prejudice,” or “non-violation
nullification and impairment of benefits” actions.)
Under Article 13, governments must refrain for the first 9 years that the URAA
is in effect from taking action under domestic countervailing duty proceedings so long
as the subsidies in question are so-called “green box” – that is, not considered to be
trade-distorting subsidies. Article 13 also deals with possible challenges to domestic
support measures that fall outside the “green box” (e.g., so-called “amber box” or

more likely trade-distorting subsidies) in circumstances in which the WTO country
providing the subsidy is meeting its subsidy reduction commitments agreed to in the
URAA. In such cases, countries are to exercise “due restraint” in initiating
investigations. Similarly, with export subsidies, member countries are to exercise due
restraint in initiating investigations.
Section 3016
Title III of the Trade Act of 1974, as amended, provides the authority and
procedures to enforce U.S. rights under international trade agreements and to respond
to certain unfair foreign trade practices. These provisions, which together are
commonly referred to as “Section 301,” provide that if the U.S. Trade Representative
(USTR) determines that a foreign act, policy, or practice violates or is inconsistent
with a trade agreement or is unjustifiable and burdens or restricts U.S. commerce,
then USTR must act to enforce U.S. rights under the trade agreement or to obtain the
elimination of the act, policy, or practice, subject to the specific direction, if any, of
the President.
Section 301 empowers the USTR to take several forms of action to deal with
unfair practices. USTR can: 1) suspend, withdraw, or prevent the application in the
foreign country involved of benefits from concessions made in a trade agreement; (2)
impose duties or other import restrictions on the goods and services of the foreign
country for such time as the USTR deems appropriate; (3) withdraw or suspend
preferential duty treatment under various trade preference schemes; or (4) enter into
binding agreements that commit the foreign country to eliminate or phase out the act,
policy or practice; eliminate any burden or restriction on U.S. commerce resulting
from those acts, policies, or practices; or provide the United States with
compensatory trade benefits that are satisfactory to the USTR. Under Section 301,
USTR can take all appropriate action, including retaliation, to obtain the removal of
any act, policy, or practice of a foreign government that violates an international
agreement or is unjustified, unreasonable, or discriminatory, and which burdens or
restricts U.S. commerce.
Section 301 Procedures. Any interested person may file a petition with the
USTR requesting that action be taken under Section 301. Investigations also may be
initiated by a petition filed with the USTR by an affected party or parties, or on
USTR's own motion. If USTR makes a determination to initiate an investigation, it
must at the same time request consultations with the foreign country concerned
regarding the issues. If consultations with the foreign country in question do not
resolve the issues and the investigation involves a trade agreement, then USTR is
obliged to resort to dispute settlement procedures provided for under that agreement.
Trade Obligations. Sections 301-309 are the U.S. domestic counterparts to
the WTO consultation and dispute settlement procedures set forth generally in
Articles XII and XIII of the GATT (1947), as elaborated on by agreements reached
during the Tokyo Round and in the Uruguay Round Understanding on Rules and

6Legislative authority: Sections 301-310 of the Trade Act of 1974, as amended (19 U.S.C.


Procedures Governing the Settlement of Disputes. These sections contain the
authority in U.S. domestic law to take retaliatory action, including import restrictions
if deemed necessary, to enforce U.S. rights against violations of trade agreements by
foreign countries and unjustifiable, unreasonable, or discriminatory foreign trade
practices which burden or restrict U.S. commerce.
Former Agricultural Trade Remedies
Formerly, certain U.S. agricultural producers also might potentially benefit from
import relief under another measure commonly called “Section 22,” which refers to
a provision of permanent agricultural law (the Agricultural Adjustment Act
Amendment of 1935) allowing the President to impose import fees or import quotas
to prevent imports from non-WTO member countries from undermining the price
support and supply control objectives of domestic farm programs. Legislation
implementing NAFTA and the WTO URAA exempts NAFTA and WTO member
countries from Section 22 quotas and fees. Under both trade agreements, the United
States converted then-in-effect Section 22 restrictions (e.g., affecting cotton, peanuts,
dairy, and sugar) into tariff-rate quotas (TRQs).7
Another import relief mechanism was the Meat Import Act of 1979, which
required the President to impose quotas on beef, veal, mutton, and goat imports when
aggregate quantities of imports of such products were expected to exceed a
prescribed trigger level (although voluntary restraint agreements negotiated with
affected countries were used to avert such quotas). With the URAA, a TRQ replaced
the previous meat import restrictions.
Choice of Trade Remedy8
Agricultural industries have some latitude in determining which remedy for
import relief to pursue. Factors involved in the choice of remedy include the
causation and injury standards to be met, the procedures involved, and the manner by
which the remedy is treated in trade agreements.
The causation and injury standards applied in safeguard determinations are higher
than those applied in CVD or AD cases. Section 201 requires that imports be a
“substantial” cause of or threat of “serious injury.” “Substantial cause” is defined in
the statute as “a cause which is important and not less than any other cause.”
“Serious injury” is injury that is a significant, overall impairment to the position of the

7A TRQ combines two policy instruments historically used to restrict imports that compete
with a domestically-produced commodity or product: quotas and tariffs. In a TRQ, the quota
component works together with a specified tariff level to provide the desired degree of import
protection. Imports entering during a specific time period under the quota portion of a TRQ
are usually subject to a lower, or sometimes a zero, tariff rate. Imports above the quota’s
quantitative threshold face a much higher, and usually prohibitive, tariff.
8For a comparison of injury thresholds and procedures, see Trade Remedy Law Reform in the

107th Congress, CRS Report RL304612, June 6, 2001.

domestic industry. In contrast, CVD and AD statutes require the determination of
“material injury,” defined as injury which is “not inconsequential, immaterial or
unimportant.” CVD and AD statutes require that the injury occur “by reason of” the
subsidized or dumped imports, a less precise and lower causation standard than under
the safeguard statute.
In addition to stricter causation and injury standards, procedures for safeguard
relief entail decisions with respect to import relief that are made at a higher policy
level – the President and possibly Congress – than in AD and CVD procedures.9 The
President has wide discretion, including taking no action at all, in deciding what, if
any, safeguard relief to implement. Congress also may have a role in the process if
the President does not follow the recommendation of the ITC. In contrast, no such
discretion exists in CVD and AD cases. Relief as determined by the DOC is
implemented by a DOC antidumping or countervailing duty order without presidential
or congressional involvement.
The higher injury standards and more demanding procedures for safeguard relief
reflect the fact that the statute involves fairly traded imports from all sources. In
addition, the President, in deciding on the actions to be taken, must take into account
factors related to national economic and security interests. Foreign countries whose
trade will be affected by safeguard actions will seek to encourage the President to
refrain from imposing, or otherwise to moderate, the safeguards.
The stricter standards and procedures are probably a significant reason why U.S.
industries, including agriculture, have sought and received relief much more often
from AD and CVD procedures than from safeguards (see below). Also, recent
experience with WTO dispute settlement involving U.S. imposition of safeguard
actions, particularly in regard to wheat gluten and lamb imports (discussed below),
may discourage parties who claim import-related injury from using Section 201. In
both cases, the WTO questioned the methodology used by U.S. ITC in determining
injury caused by imports and overturned the remedy invoked by the President. U.S.
agricultural CVD and AD decisions have faced much less scrutiny in WTO dispute
Agricultural Cases
Safeguard Actions
A total of 73 ITC safeguard investigations have been conducted since passage
of the Trade Act of 1974. Twenty of them covered food and agriculture product
imports, six completed since 1995 (the list in table 1 is chronological, beginning with
the earliest). Of the 20 food and agriculture cases, seven have received some form
of relief.

9Trade Remedy Law Reform in the 107th Congress (CRS Report RL30461), p. 5.

Table 1. U.S. ITC Investigations of Food and Agricultural Imports
Completed Under Section 201 of the Trade Act of 1974
NumberSubjectFinal Disposition
TA-201-3Wrapper tobaccoNo relief
TA-201-4AsparagusNo relief
TA-201-10MushroomsAdjustment assistance
TA-201-12ShrimpAdjustment assistance
TA-201-14HoneyNo relief
TA-201-16SugarPrice support
TA-201-17MushroomsNo relief
TA-201-22Fresh cut flowersNo relief
TA-201-25Live cattle/certain meat products No relief
TA-201-41Certain fishNo relief
TA-201-42RosesNo relief
TA-201-43MushroomsTariff increase
TA-201-53Certain canned tunaNo relief
TA-201-59Apple juiceNo relief
TA-201-64Fresh winter tomatoesNo relief*
TA-201-65Broom corn brooms3-year relief
TA-201-66Fresh tomatoes/bell peppersNo relief
TA-201-67Wheat gluten3-year relief
TA-201-68Lamb meat3-year relief
TA-201-71Crabmeat from swimming crabsNo relief
Source: International Trade Commission. *Investigation terminated at petitioners’ request.
The most recent high-profile agricultural investigations have involved wheat
gluten and lamb meat imports. In both instances, the ITC found in favor of the
domestic industry, and the President imposed import restrictions. WTO dispute
settlement panels sided with foreign countries in their challenges of both the wheat
gluten and lamb meat restrictions. Although the restrictions have been removed as
a result of the adverse WTO rulings, adjustment assistance to the affected U.S.
producers has continued.
European Union Wheat Gluten. Wheat gluten is used by the baking
industry to raise the protein level of flour. The domestic industry contends that

European Union (EU) wheat gluten unfairly benefits from subsidies and trade barriers,
and that EU exports to the United States have caused serious economic injury to
domestic producers. An initial effort by the Wheat Gluten Industry Council to seek
relief through a Section 301 action in 1997 made no progress. However, the Council,
on January 15, 1998, petitioned the ITC under Section 201 for the imposition of
safeguard measures against the EU imports. After the ITC found that such imports
were a substantial cause of serious injury to the U.S. industry, the President, on May
30, 1998, proclaimed an annual import quota for wheat gluten, for a 3-year period
ending June 1, 2001, starting at about 126 million pounds in the first year and rising
to 142 million pounds in the third year.
The EU in mid-1999 challenged the wheat gluten safeguards, and a WTO dispute
panel in December 2000 concluded that the ITC had not ensured that injury caused
by other factors was attributed to imports. Once the WTO had ruled that the U.S.
safeguard was in violation of the Safeguard Agreement, the EU subsequently
retaliated by imposing a special duty on imports of U.S. corn gluten feed. On June
1, 2001, the Bush Administration announced that it would not extend the wheat
gluten quota. Following the lifting of the U.S. quota, the EU announced it would
discontinue the tariffs on corn gluten feed. The Administration said it instead would
provide the U.S. industry with $40 million over 2 years so that the industry could
continue its efforts to become more competitive. Two U.S. wheat gluten companies
– Midwest Grains, and Manildra, a subsidiary of an Australian firm – were expected
to benefit from the subsidies.10
Australia and New Zealand Lamb Meat. Acting on a Section 201 petition
filed by the American Sheep Industry Association (ASI) and others, the ITC on
February 9, 1999, found that increased lamb meat imports were a substantial cause
of the threat of serious injury to the U.S. lamb meat industry. Subsequently, President
Clinton announced, on July 7, 1999, an import relief package for the U.S. industry
that included both a 3-year, $100 million initiative to help the industry improve
productivity, and tariff-rate quotas on lamb meat imports from Australia and New
Zealand (which account for 99% of such imports).
Following complaints filed by the two countries, a WTO dispute panel ruled on
December 6, 2000, that the United States had violated the WTO’s safeguard
provision by improperly attributing, to the imports, the economic injury that was
caused by other factors. On May 1, 2001, a WTO appellate body turned aside a U.S.
appeal. The Bush Administration on August 31, 2001, then announced that it would
end the tariff-rate quota safeguard on November 15, 2001. As part of an agreement
with New Zealand and Australia, the United States is to provide the U.S. lamb
industry with up to $42.7 million in assistance (in addition to the $100 million)
through FY2003 to help the U.S. industry continue to adjust to import competition.11

10Source: Inside U.S. Trade, June 8, 2001; and a USTR press release dated June 1, 2001. For
more details on the case see CRS Report RL30610, Vital Wheat Gluten: U.S. Industry
Performance and Foreign Trade Implications of Section 201 Quotas.
11See also: USTR press release dated August 31, 2001.

Countervailing and Anti-Dumping Duties
More than 1,200 individual AD and CVD cases have been initiated since 1980,
of which 76 were for food and agricultural product imports (see Appendix B table).
Since 1994, more than 300 AD and CVD cases of all types were initiated; of these,12

30 were food and agricultural. However, numerous cases are related to each other.

Petitioners for import relief frequently are unsuccessful in AD and CVD cases.
However, a substantial number do gain relief. As of December 2001, approximately

260 AD and nearly 50 CVD orders were in effect for all types of products. Of these,

35 were food and agricultural cases (again, some of them are related to each other).

Some were initiated as far back as the late 1970s (see table 2). Such orders, issued
when investigations find in favor of the domestic industry seeking relief, entail higher13
duties on imports of these products from targeted countries.
Apple Juice. A recent example of a successful U.S. petition was a recent
apple industry case. Apple industry groups from Michigan, California, Pennsylvania,
and Washington, in 1999 petitioned for relief from what, they argued, were unfairly-
priced imports of non-frozen concentrated apple juice from China that were causing
them economic injury. An anti-dumping investigation was instituted on June 7, 1999,
and, ultimately, DOC and ITC determinations upheld the U.S. industry’s assertions.
DOC imposed anti-dumping duties of up to 52%, effective June 5, 2000.
Honey. Importers can be subject to provisional duties if, in the course of an
investigation, a preliminary determination is made that dumping is occurring. For
example, in the cases filed September 29, 2000, against honey imports from Argentina
and China (see table 2), DOC made a preliminary determination (on May 7, 2001) that
dumping was occurring. DOC imposed provisional duties on imports from the two
countries ranging as high as 184% ad valorem (varying rates apply, depending upon
the specific importing entity). The determination means that importers were required
to post bonds or make cash deposits in the appropriate amounts to cover the duties
until the end of the process – when either final orders, with countervailing and/or anti-
dumping duties, are issued, or else the cases are terminated by DOC or ITC.
U.S. honey producers subsequently prevailed when the DOC issued a final ruling
that dumping and/or countervailable subsidies were occurring; and the ITC
determined that the U.S. industry is being, or threatened with being, materially
injured. On December 10, 2001, DOC issued a final AD order imposing import duties
on Argentine and Chinese honey ranging from about 26% to 184% ad valorem
(depending upon the importing entity), as well as a final CVD order for import duties
of nearly 6% on Argentine honey.

12 For example, four separate but related cases were initiated against preserved mushrooms;
they all were filed on January 6, 1998, but against four different countries. In another
example, live cattle were the subject of three separate cases initiated on November 12, 1998.
However, all three cases were related: AD and CVD investigation against Canadian cattle, and
an AD investigation against Mexican cattle. Source: ITC.
13As noted, agricultural and other petitioners are receiving distributions from duties collected
under AD and CVD orders; see “Byrd Amendment” on page 15.

Cattle. An example of an unsuccessful petition was a challenge against live
cattle imports from Mexico and Canada under both the AD and CVD laws. In
November 1998, Ranchers-Cattlemen Action Legal Foundation (R-CALF) filed a
complaint that such imports were being sold in the United States at less than fair
value. The ITC first voted to terminate the case against Mexico but did find
reasonable indication that U.S. cattlemen were threatened or injured economically by
low-cost Canadian cattle imports. DOC next concluded that Canadian cattle feeders
were dumping cattle, at margins ranging from 3.86% to 15.69%. However, on
November 9, 1999, the ITC ruled finally that despite such margins, the imports were
not materially injuring or threatening to injure U.S. producers – therefore, no anti-
dumping order (with duties) was issued.
Table 2. Anti-Dumping (AD) and Countervailing Duty (CVD) Orders in
Effect for Food and Agricultural Products as of December 2001
Product NameCountries AffectedDate ofType
Apple Juice ConcentrateChina06/05/00AD
Crawfish Tail MeatChina09/15/97AD
Garlic, FreshChina11/16/94AD
Honey Argentina 12/10/01 AD
HoneyArgentina, China12/10/01CVD
Mushrooms, PreservedChile12/02/98AD
Mushrooms, PreservedChina, India, Indonesia02/19/99AD
Orange Juice, Frzn. Conc.Brazil05/05/87AD
PastaItaly, Turkey07/24/96AD
PastaItaly, Turkey07/24/96CVD
Pineapple, CannedThailand07/18/95AD
Pistachios, Raw In-shellIran07/17/86AD
Pistachios, Roasted In-shellIran10/07/86CVD
Pistachios, Raw In-ShellIran03/11/86CVD
Salmon, FreshChile07/30/98AD
Salmon, Fresh & ChilledNorway04/12/91AD
Salmon, Fresh & ChilledNorway04/12/91CVD
SugarBelgium, France, Germany06/13/79AD
SugarEuropean Union07/31/78CVD
Tomatoes, Fresh*Mexico11/01/96AD
Urea, SolidBelarus, Estonia, Lithuania,07/14/87AD
Romania, Russia, Tajikistan,
Turkmenistan, Uzbekistan
Sources: U.S. International Trade Comm.; International Trade Admin. *Suspended.

Section 301
As noted, Section 301 primarily has addressed complaints not about imports, but
rather that U.S. exports have been impaired by unreasonable foreign policies or
actions. More than a dozen 301 cases involving food and agricultural products (a
number of them related to each other) were initiated between 1994 and 2001. These
have involved the EU and bananas, dairy products, meat, and wheat gluten (the latter
eventually was pursued under safeguard authority; see above); Korea and meat
products; Australia and leather; Japan and certain agricultural products; Canada and
dairy products and wheat; and Mexico and high fructose corn syrup (HFCS). Details
on some of the more prominent cases follow.
European Union Banana Regime. In 1993, the EU established a banana
import regime that favored imports from EU countries' former colonies, especially in
the Caribbean, and that restricted access to bananas produced in Latin America. At
the request of U.S. banana interests operating in Latin America, section 301
investigations were undertaken into whether the EU policies and practices were
discriminatory. Following a series of bilateral and multilateral consultations, USTR
took the issue into the WTO dispute settlement process, where, in 1997, the WTO
found that the EU banana import regime was inconsistent with EU trade obligations.
By 1999, the EU (with a $5 billion banana market) had not implemented the WTO
reforms, so the United States imposed WTO-approved retaliation (in the form of

100% tariffs) on nearly $200 million of EU exports to the United States.

In April 2001, the United States and the EU reached an agreement that resolved
the banana dispute. In response to the EU's agreement to increase market access for
U.S. banana distributors, the United States lifted its retaliatory duties on July 1, 2001.
The agreement provides for a transition to a tariff-only system of imports in 2006.
In the period until 2006, the EU is establishing quotas and a licensing system based
on historical trade shares that should increase the prospects for Latin American
banana imports in the EU market, especially bananas marketed by U.S. firms like
Chiquita Brands International. Under the agreement, banana imports from developing
countries that are former EU member country colonies (the so-called ACP countries
in Africa, the Caribbean, and Pacific) will continue to enjoy preferential entry. Trade
ministers in the Fourth Ministerial Conference of the WTO held in Doha, Qatar, from
November 9-11, 2001, agreed to grant the EU waivers from its non-discrimination
obligations in order to enable it to give preferential tariff concessions to the ACP
countries and to augment the quota for Latin American bananas. As a result, full14
implementation of the agreement can now proceed.
European Union Meat Hormone Directive. Section 301 actions were
instituted to challenge an EU ban, which took effect in 1989, on imports of meat
derived from animals treated with growth hormones. The United States contended
that the ban lacks a scientific justification and therefore is inconsistent with the
Uruguay Round Sanitary and Phytosanitary (SPS) Agreement. WTO panels
eventually agreed with the U.S. argument, left open the option for the EU to conduct

14Inside U.S. Trade, July 27, 2001. Also see: U.S.-EU Banana Dispute, in the CRS
Electronic Briefing Book on Trade.

a risk assessment of hormone-treated meat; and gave the EU until May 13, 1999, to
bring its hormone measure into compliance with SPS rules. The EU, citing studies
that, it contends, raise human health questions about the use of such hormones, did
not meet the deadline and said it intended to maintain the ban. Effective July 29,
1999, the United States imposed 100% retaliatory tariffs on $116 million worth of
imports from the EU (the level approved by the WTO). The tariffs are a punitive
measure that will not reopen the European market to most U.S. meat products, at
least in the near term. Both sides still express a desire to reach an amicable settlement,
but none was at hand as of early 2002.15
Mexico High Fructose Corn Syrup. A Section 301 investigation was
initiated in early 1998 after the U.S. Corn Refiners Association alleged that the
Mexican government had denied fair and equitable marketing opportunities for U.S.
high fructose corn syrup (HFCS), by fostering collusion between the Mexican sugar
and soft drink industries. NAFTA and WTO dispute proceedings already were
underway to address the U.S. contention that Mexico had failed to abide by its own
laws when it imposed, in January 1998, anti-dumping duties ranging from $55 to
$175 per ton on U.S. HFCS imports. NAFTA and WTO panels both have since sided
with the United States, essentially agreeing that Mexico had not proven that the
imports injure or threaten to injure a domestic industry. That could lead to retaliation
in the form of 100% tariffs on some as-yet undetermined value of Mexican imports.
However, the HFCS dispute is closely tied to ongoing negotiations on market
access to the U.S. market for Mexican sugar. Starting October 1, 2000, Mexico
under NAFTA became eligible to ship much more sugar duty free to the U.S. market
than the 25,000 metric tons allowed to enter in earlier years. U.S. and Mexican
negotiators continue to disagree, however, over just how much sugar Mexico actually
can export to the United States. An agreement was reached in December 2001
between Mexico and the United States to attempt to find a negotiated settlement in
the dispute, while leaving the HFCS duties in place. However, the sweetener issue
became more contentious when Mexico imposed, on January 1, 2002, a new tax of
up to 20% on soft drinks containing HFCS. This tax, too, could be challenged under
NAFTA or WTO provisions.16
Canada Wheat. USTR initiated, on October 23, 2000, a Section 301
investigation after the North Dakota Wheat Commission filed a petition alleging that
the Canadian government and the Canadian Wheat Board were engaging in
anti-competitive practices in third-country markets, i.e., offering to undersell U.S.
wheat with lower prices in some markets, and charging higher prices in others to
make up the difference. Earlier this year, USTR asked the ITC to investigate these
practices and the ITC published its report on December 18, 2001.17 The ITC’s

15See CRS Report RS20142, The European Union's Ban on Hormone-Treated Meat.
16“Mexico Says Resolving Sweetener Dispute a Priority; High-Level Talks With U.S.
Needed,” International Trade Reporter, January 24, 2002. For current status, see CRS Issue
Brief IB95117, Sugar Policy Issues.
17U.S. ITC, Wheat Trading Practices: Competitive Conditions between U.S. and Canadian
Wheat, USITC Publication 3465, December 2001.

analysis does not support the charge that the Canadian Wheat Board is systematically
underpricing exports in U.S. or third country markets.
However, on February 15, 2002, USTR released an “affirmative finding” that the
Government of Canada grants the Canadian Wheat Board special monopoly status
that gives it a competitive advantage that harm U.S. producers. USTR said it would
“aggressively pursue” several avenues to address the finding: (1) examine whether to
take a dispute settlement case to the WTO; (2) work with the North Dakota Wheat
Commission and the U.S. industry to examine whether to file U.S. CVD and AD
petitions with Commerce and the ITC; (3) with industry, identify specific impediments
to U.S. wheat exports to Canada, and to negotiate with Canada to ensure fair two-
way trade; and (4) complement the first three actions with “the Administration’s
ongoing commitment to vigorously pursue comprehensive and meaningful reform of
state trading enterprises in the WTO agriculture negotiations.”
USTR said it would not impose a tariff-rate quota at this time, contending that it
would violate NAFTA and WTO commitments, could attract Canadian retaliation
against U.S. agriculture, and would not achieve a “durable solution” to the market
distortions caused by the Canadian Wheat Board monopoly.18
Recent Policy Developments
A variety of measures have been passed or proposed in recent years aimed at
improving U.S. producers’ ability to obtain relief from what they view as unfair
import pricing and/or barriers to their own exports. In some cases, these measures
have been offered primarily in response to concerns raised by U.S. agriculture. Often,
they have been fueled by the trade problems experienced by other U.S. industries, but
nonetheless are or would be applicable across the economy, including agriculture.
Some argue that agriculture deserves special treatment under U.S. trade policy
in general and trade remedy legislation in particular due to its unique characteristics.
Characteristics often cited as in support of special agricultural treatment include the
highly perishable and cyclical nature of agricultural products and the importance of
a financially healthy farm sector in ensuring adequate food at reasonable prices.
However, a counter-argument could be made that modern U.S. agriculture has
become far more integrated into, and similar to, much of the rest of the U.S.
economy, making special treatment unnecessary. Besides, it could be argued, the
sector already is supported – far more than other industries – through an array of
extensive and costly price and income supports, export programs, and other
government spending that helps to cushion and insulate farmers from trade problems.
This section surveys a number of legislative and trade policy developments with
potential implications for agricultural producers.

18United States to Purse Action Against Monopolistic Canadian Wheat Board,USTR press
release, February 15, 2002.

Byrd Amendment
Senator Byrd successfully sponsored an amendment to the FY2001 agricultural
appropriation (P.L. 106-387; section 1003) that requires that anti-dumping and
countervailing duties be redistributed to the domestic industries found to be injured
by the imports and subject to the AD and CVD orders. The provision, entitled the
Continued Dumping and Subsidy Offset Act of 2000, applies to all industries and not
just agriculture. It requires the U.S. Customs Service to deposit the duties into a
special account rather than into the general treasury, as previously. Customs then
must distribute the funds to eligible firms, farmers, or other producers that were
petitioners in the original AD or CVD cases to offset certain expenses they incurred
as a result of the dumped or subsidized imports.
Customs published on August 3, 2001, a list of AD and CVD orders, and the
names of affected domestic producers potentially eligible under the “Byrd
Amendment” for a redistribution of FY2001 duty collections. Customs on January

30, 2002, released details on the first disbursements under the Byrd Amendment,

which totaled approximately $200 million. Much of the $200 million went to U.S.
manufacturers of ball bearings and other steel products.
About $22 million of the $200 million was for agricultural AD and CVD cases
(generally, those in table 2 on page 11). Most of the agricultural disbursements were
for petitioners in the Italian pasta cases (see table 2), notably to Hershey Foods at
approximately $8 million and to American Italian Pasta at more than $7 million.
Customs reported that another nearly $2 billion was being held (as of October 1,
2001) in clearing accounts awaiting final liquidation (some but not necessarily all of
it ultimately will be paid to AD/CVD petitioners); about $121 million was for
agriculture-related cases.
The Byrd amendment has been controversial, initially because of criticism that
it was inserted into the legislation during conference without committee consideration
in either chamber, and more recently because of budgetary and international trade
concerns. In late 2000 and early 2001, the EU, Japan, and 10 other countries lodged
complaints with the WTO charging that the amendment violates WTO obligations
(see below, “Concluding Observations”).
“Carousel” Retaliation
Section 407 of the Trade and Development Act of 2000, (P.L. 106-200) directs
the USTR periodically to revise the list of products subject to trade retaliation;
revision is not required if the USTR determines that implementation of WTO
obligations is imminent, or the USTR and the petitioner agree that revision is
unnecessary. Impetus for the provision grew largely from the difficulties the United
States had in forcing the EU to change its banana import regime and its beef hormone
ban (see page 13), even though WTO panels had ruled for the United States and
permitted it to impose retaliatory duties against various imports from the EU.
Proponents of the carousel provision contend that rotating the list of products subject

to retaliation would bring more pressure to bear on the offending party by exposing
a broader swath of its economy to economic pain.19
The USTR began implementing the provision in late May 2000, but product lists
have not been changed. The EC has challenged the carousel provision in the WTO
as violating the Dispute Settlement Understanding; the proceeding is still in
consultations. The United States also reportedly is reluctant to employ “carousel”
because of other sensitive U.S.-EU trade matters, particularly in light of a WTO panel
decision that a U.S. tax benefit provided to U.S. foreign sales corporations violates
trade rules, which could potentially subject the United States to as much as $4 billion
in retaliatory tariffs. The amount of retaliation is currently in WTO arbitration.
Other Proposals to Change Current Trade Remedy Laws
Several bills have been introduced in the 107th Congress that would make
potentially significant changes in existing trade remedy statutes. For example, H.R.
518, S. 979, and H.R. 1988 contain various provisions aimed at easing the
requirements for determining that imports have caused, or threatened to cause,
material injury to a U.S. industry, including but not limited to agriculture. Proposed
provisions would, among other things, specify that imports could be one of the causes
of injury; they no longer would have to be the primary cause for gaining import relief.
Other examples include S. 1869 and H.R. 3571, both of which would provide for
expedited antidumping investigations when imports increase materially from new
suppliers after an antidumping order has been issued.
S. 979 and H.R. 1988, which are companion bills, also contain language related
directly to agriculture. In determining whether injury has occurred, the ITC
effectively would be required, if it determines that a product is a perishable
agricultural product with a short shelf life, to measure the economic effects during the
course of the product’s defined production period or season (i.e., not over a longer
period, when the effects of an import might be diluted statistically). Several
provisions also specify several factors that should or should not be weighed in
determining economic injury.
Agriculture in Trade Promotion Authority Legislation
The Administration and congressional supporters are seeking to renew authority
for the President to negotiate trade agreements with expedited procedures for
legislation to implement those agreements. This authority is commonly called "trade
promotion authority" (TPA) or "fast-track authority." As in the past, many (although
not all) agricultural groups are among the export-oriented interests that support such
authority. It is expected that a final TPA law will include language that recognizes
the industry's "special status" and/or makes other special concessions to it.

19 The Administration already had the authority to rotate product lists, but had not taken such
action. See: CRS Report RS20751 (pdf), Trade Retaliation: the "Carousel" Approach, and
“The Foreign Sales Corporation (FSC) Export Tax Benefit and the ETI Replacement
Provisions” in the CRS Trade Electronic Briefing Book.

On December 6, 2001, the House narrowly passed, largely along party lines, a
TPA bill (H.R. 3005) that would authorize the President to negotiate trade
agreements reached by June 30, 2005 (with a 2-year extension possible). The Senate
Finance Committee cleared its version of H.R. 3005 on December 18, 2001; full
Senate consideration is expected shortly.
In part to shore up support for TPA among agricultural groups and also to
address their specific trade concerns, proponents of H.R. 3005 have included
extensive provisions regarding negotiating objectives and consultation requirements
for agriculture. H.R. 3005 includes, among numerous agricultural negotiating
objectives: eliminating practices that adversely affect trade in perishable or cyclical
products and addressing their trade problems; and ensuring that import relief
mechanisms for such products are as accessible and useful to U.S. growers as they are
to producers in other countries.20
Also to garner more support from agricultural members, the bill's House
sponsors added language expanding the consultation requirements that U.S. officials
must follow before undertaking tariff reduction negotiations on agricultural products
considered "import-sensitive" (defined in the House version as those subject to the
minimum 2.5% annual reduction required under the URAA). The USTR would have
to identify such products – likely more than 200 specific items ranging from cheese
and many other dairy products to various fresh fruits and vegetables, sugar and other
sweeteners, beef and lamb, oilseeds, wine, tobaccos, cotton, wool, and chocolate –
and consult with Congress on how domestic producers would be affected by tariff
cuts, among other requirements. The Senate version contains somewhat different
language but with the same intent.
Some analysts note that while H.R. 3005 and the Senate bill give the President
the authority he has sought to proceed with negotiations, provisions in those bills will
make it difficult for the President to achieve stated negotiating objectives for
agriculture. In particular, analysts say both bills' requirement to consult in advance
with Congress before negotiating cuts in tariffs on import-sensitive products, make
negotiating tariff reductions more difficult and prevent negotiation of trade-offs
between sectors. The Administration, however, has expressed the view that while the
fast track bills pose additional hurdles for lowering tariffs on import-sensitive
products, in the long-run they provide a "better basis" for negotiations.
Trade Adjustment Assistance for Farmers
Several proposals have been offered to extend trade adjustment assistance
(TAA) to farmers. TAA programs are available for workers (through the Department
of Labor) and for firms (through the Department of Commerce). They provide funds
for training and other adjustment measures to those who can demonstrate an adverse
impact from imports. Many economists prefer this option over trade restrictive

20Examples of other objectives include reducing or eliminating import tariffs, export subsidies,
and trade distorting domestic support; maintaining bona fide food assistance programs, and
preserving U.S. market development and export credit programs. For more information see
CRS Report 97-817, Agriculture and Fast Track or Trade Promotion Authority.

remedies because it directs assistance to those most affected and does so without
distorting prices. But TAA programs as currently designed and administered have
been criticized by labor advocacy groups as ineffective in responding to workers'
needs in a globalizing economy.21 They also may be of limited value for agriculture.
Current legislative authority for TAA for workers and firms expired at the endth22
of FY2001, and the 107 Congress has been considering legislation to extend it.
Proposals to include farmers have been offered, and are included in the major vehicles
now under consideration. Senator Conrad introduced, on June 26, 2001, the Trade
Adjustment Assistance for Farmers Act (S. 1100), which would add a new chapter
to Title II of the Trade Act of 1974 (the TAA authorizing law, at 19 U.S.C. 2251 et
seq.) creating such a program for FY2002-FY2006. The bill’s language was
incorporated into a broader bill to extend and amend the TAA programs, the Trade
Adjustment Assistance for Workers, Farmers, Communities, and Firms Act of 2001
(S. 1209), introduced July 19, 2001, by Senator Bingaman, which was substantially
amended and approved by the Senate Finance Committee on December 4, 2001.
Under S. 1209, a group of agricultural producers could petition the Secretary of
Agriculture to be certified as eligible for TAA. The Secretary would have 60 days to
determine that the national average price for the affected commodity or class of goods
from that commodity (for the most recent marketing year) was less than 80% of the
average price for the prior 5 years, and imports of like items “contributed23
importantly” to the price decline.
Once such a determination was made, each member of the eligible group could
apply to the Secretary for a cash payment equal to: one-half of the difference between
the most recent year’s national average price and 80% of the preceding 5 marketing
years, times his or her production for the year. An individual’s benefits would be
limited to $10,000 per year, and all claims could be decreased proportionately, if
necessary, to maintain the total national cost of the program at a proposed authorized
funding cap of $90 million annually. Several bills with similar farmer language have
been introduced into the House, including H.R. 3359 and H.R. 3670.
Current TAA eligibility for workers is based on loss of a job. The language in
S. 1209 ties payments to the price effects of an imported commodity. Tying subsidies
to price and production already is a key feature of a number of existing and proposed
farm support programs administered by USDA.24

21Trade Remedy Law Reform in the 107th Congress.
22 Although the authorization for the program has expired, it continues to operate normally
with the funds appropriated for FY2002 in P.L. 107-116. For background see, in the CRS
Trade Electronic Briefing Book, Trade Adjustment Assistance for Workers and Trade
Adjustment Assistance for Firms.
23A separate provision would require the Secretary to report on potential producer eligibility
for TAA for any agricultural commodity involved in an USITC safeguard investigation.
24For background see CRS Report RS20848, Farm Commodity Programs: A Short Primer,
and CRS Report RL31195, The 2002 Farm Bill: Overview and Status.

The Labor report on TAA for agricultural producers observed that the existing
programs for workers emphasize retraining those who have lost their jobs so that they
can find other occupations. “Any modifications to these DOL programs such as to
provide financial assistance to workers to remain in their current occupations runs
counter to the emphasis of these important readjustment programs.” The Commerce
TAA program for firms “provides opportunities for agriculture commodity producers
who have been injured by lost sales and reduced the number of their employees due
to increased imports to receive limited technical assistance, on a cost shared basis,
that will help them regain their economic competitiveness.” However, the program
has funding limitations and “no authority to provide any direct financial assistance in
the form of loans, loan guarantees, or income supplements, to trade injured firms.”
USDA officials noted in the report that low commodity prices and reduced farm
income are not due primarily to increased imports. “Thus, TAA-type programs with
their linkage to increased imports would not help address low prices faced by
agricultural commodity producers.” The Labor report concluded:
Should the [Senate Finance and House Ways and Means] Committees consider
legislation designed to assist agricultural commodity producers and workers
adversely affected by low prices as a result of imports who desire to remain in
their current occupations, we recommend that it be enacted separately and apart25
from the current trade adjustment assistance for workers or firms programs.
Concluding Observations
As agricultural trade grows, U.S. producers are exposed not only to new sales
opportunities overseas, but also to stronger price competition at home as food and
farm imports from other countries increase. Often, certain groups of commodity
producers perceive such imports as a threat to their livelihoods, and seek relief from
the government, either under existing statutes as described above, or through new
legislative proposals, some of which have attracted congressional interest.
Generally, trade remedy legislation receives the most support from industries –
whether agricultural or non-agricultural (e.g., steel, textiles, etc.) – that appear to be
the most sensitive to foreign competition. However, opposition to such legislation
often is found among other domestic interests, notably U.S. businesses that rely on
imports, and consumers who face potentially higher prices due to import restrictions.
Other possible costs of trade remedies are the extent, if any, to which they might

25U.S. Department of Labor, Report on Trade Adjustment Assistance for Agricultural
Commodity Producers, submitted October 26, 2000, to the Senate Finance and House Ways
and Means Committees. The report noted that from FY1994 through FY2000, of 2,616
certifications of petitions filed with DOL for worker assistance, only 21 were in agriculture.
The Commerce TAA program for firms between FY1994 and the first half of FY2000
certified 29 incorporated agricultural firms covering fresh flowers, pears, pineapples, carrots,
maple syrup, oysters, crabs, salmon and other fish. Of the 29 firms, 21 actually submitted
adjustment proposals, for which more than $750,000 in TAA funds had been allocated to 20
of them.

sustain economically inefficient U.S. producers, heighten international trade tensions,
and/or increase government outlays.
Trade remedy laws already have come under scrutiny and challenge by the
United States’ major trading partners, and by the WTO itself. Noting that the United
States has continued to make use of AD and CVD measures, the WTO recently
stated: “Initiations of investigations may have a chilling effect on trade, with
preliminary duties applied in most cases.” Turning to the Continued Dumping and
Subsidy Offset Act (the Byrd Amendment), the WTO quoted President Clinton as
saying it would “provide select U.S. industries with a subsidy above and beyond the
protection level needed to counteract foreign subsidies, while providing no
comparable subsidy to other U.S. industries or to U.S. consumers, who are forced to
pay higher prices on industrial inputs or consumer goods as a result of the anti-
dumping and countervailing duties.”26
However, the WTO also has pointed out that the United States is not alone in
its use of various import protections for agriculture and other products. Regarding
“special” agricultural safeguards in particular, the WTO reported that 38 of its
member countries currently have reserved the right to use a combined total of 6,072
of them, which it defines as “contingency restrictions on imports taken temporarily to
deal with special circumstances such as a sudden surge in imports.” These are
permitted generally under the UR Safeguards Agreement.27
With the United States in mind, the European Union and Japan, for example,
have called for a review of the antidumping practices of WTO countries in the new
round of multilateral trade negotiations, which are now getting under way. The
United States had opposed such a review. However, U.S. negotiators subsequently
agreed to language – in the November 2001 Doha declaration that began a new round
of multilateral trade negotiations – that calls for “simplification and clarification” of
countries’ laws on antidumping and safeguard laws. USTR Zoellick recently told the
Senate Finance Committee that the language is intended to encourage developing
countries to bring their own trade relief measures up to U.S. standards (and to replace
language that potentially would have been more unfavorable to the United States).
However, several committee members sharply criticized the USTR for exposing the28
U.S. trade relief laws to potential weakening in the multilateral negotiations.
Meanwhile, the U.S. position continues to be for further reductions in
agricultural trade barriers. Some foreign governments might suggest that this position
is inconsistent with the U.S. opposition to examining anti-dumping practices. Still,
U.S. producers are likely to resist changes in U.S. law, and possibly to push for
stronger protections, so long as they perceive foreign competitors engaging in unfair
subsidization of their own agricultural producers.

26September 17, 2001, WTO press release on the WTO Secretariat’s sixth trade policy review
of the United States. This document also noted prominently that the United States “maintains
one of the world’s most open trade and investment regimes.”
27WTO. WTO Agriculture Negotiations: The Issues, and Where We Are Now, January 2002.
28See for example “Trade Laws, USTR Zoellick and Finance,” in the February 7, 2002,
Washington Trade Daily.

Appendix A. Dispute Settlement in Trade
WTO Uruguay Round Agreements
Understanding on Rules and Procedures Governing the Settlement
of Disputes. The Uruguay Round Agreements include a Dispute Settlement
Understanding that sets out rules and timetables for resolving disputes. Disputes arise
when one country adopts a trade policy measure or takes some action that one or
more WTO members considers a violation of a WTO agreement or to be a failure to
live up to obligations. A third group of countries can declare their interest in the case
and enjoy some rights as well. Settling disputes is the responsibility of the Dispute
Settlement Body (DSB).
The first stage in dispute settlement is consultation between the governments
concerned. (Consultation is always a possibility even in later stages of dispute
settlement.) Consultation can take up to 60 days. If consultations fail, the
complaining country can ask for the appointment of a panel (up to 45 days). The
other country can block the creation of a panel once, but when the DSB meets a
second time, the panel can no longer be blocked. The panel reports to the parties
within 6 months and makes a final report to all WTO members within 3 weeks. The
DSB adopts the report within 60 days.
If there is no appeal, the process should take about 1 year. Either side, however,
can appeal the panel's ruling on points of law. Appeals are heard by three members
of a permanent seven-member Appellate Body. Appeals should not last more than 60
days, with a maximum of 90 days. The DSB has to accept or reject (by consensus)
the appeals report within 30 days. With appeal, the process should take about 1 year
and 3 months.
The losing country must follow the recommendations of the panel or appeals
report and state its intention to do so within 30 days of the report's adoption.
Countries can be given a reasonable period of time to comply. If a country fails to act
within this period, it has to enter into negotiations to determine mutually acceptable
compensation. If after 20 days, no satisfactory compensation is agreed, the
complaining country may ask the DSB for permission to impose trade sanctions which
the DSB should grant within 30 days or the expiration of the "reasonable period of

29 Sources: Uruguay Round Trade Agreements, Text of Agreements Implementing Bill,
Statement of Administrative Action, and Required Supporting Statements, House Document

103-316, 103d Congress, 2 session, U.S. Government Printing Office, September 27, 1994;

North American Free Trade Agreement, Texts of Agreement Implementing Bill, Statement
of Administrative Action, and Required Supporting Statements, House Document 103-159,st
103d Congress, 1 session, U.S. Government Printing Office, November 4, 1993; United
States-Canada Free Trade Agreement, House Document 100-216, 100th Congress, 2d
session, U.S. Government Printing Office, July 26, 1988.

North American Free Trade Agreement
Chapter 20 Dispute Settlement. Disputes arise when one NAFTA country
complains that another NAFTA country has taken, or is proposing to take, action
inconsistent with the Agreement or that nullifies or impairs benefits that the
complaining country thinks would accrue under the Agreement. Complaints arising
under both NAFTA and the WTO may be settled in either forum at the discretion of
the complaining party (with some exceptions).
Consultation which can take from 15 to 45 days is the first stage of dispute
settlement. If disputing parties cannot resolve the complaint, normally within 30 days,
after consultations have begun, a country may refer the issue to the NAFTA
Commission for resolution. The Commission must convene within 10 days to
consider the issue. If the Commission is unable to resolve the dispute within 30 days,
any country that participated in the dispute may convene an arbitral panel.
Panel members normally are selected from rosters maintained by each NAFTA
country. Roster members must be experts in law, international trade, or matters
covered by NAFTA or in dispute resolution. (Selection procedures are intended to
ensure that NAFTA members can select experts in particular subject matters of a
dispute to serve on panels.) A five-member panel is chosen by "reverse selection."
A chairman is chosen by agreement or by lot. Then each "side" in the dispute selects
two panelists from among citizens of the other "side." Experts or scientific review
boards may be used where disputes require their advice, as for example, in matters
concerning sanitary and phytosanitary or other scientific or technical matters. Panels
must make their initial report, including findings and recommendations for resolution
of the dispute, within 90 days of the selection of the last panelist. Disputing parties
have 14 days to provide written comments on the panel's report. The panel has 30
days then to make its final report to the disputing parties.
When the disputing parties receive the final report, they must attempt to resolve
the dispute according to the panel's recommendations. If no agreement is reached,
the parties must agree on trade compensation for the complaining party. If a panel
has found that a measure is inconsistent with NAFTA and no settlement has been
reached within 30 days or an agreed period, the complaining party may suspend the
application to the other party of NAFTA benefits. Suspension of benefits may remain
in effect until the parties have resolved the dispute.
Settlement in Anti-dumping and Countervailing Duty Cases. Each
NAFTA country retains its national antidumping (AD) and countervailing duty (CVD)
laws and can amend them. In the case of amendments, NAFTA parties should notify
and consult with the affected party in advance and also specify application to the
goods of the other party where this is intended.
NAFTA governments may invoke a procedure whereby independent panels of
experts (preferably judges or attorneys) review antidumping and countervailing duty
determinations by the relevant administrative agencies in the NAFTA countries when
those determinations concern products of a NAFTA country. Governments have
agreed to seek review when interested persons wish to challenge an agency AD/CVD
determination and who otherwise would have standing to challenge such a

determination in court. The panels apply exclusively the national law and standards
of judicial review of the of the country whose AD or CVD determinations are under
Panels are chosen from rosters maintained by each country in a manner similar
to Chapter 20 dispute settlement procedures.
NAFTA Governments may appeal a panel decision to a three-member
extraordinary challenge committee (ECC) whose members are selected from rosters
of judges maintained by NAFTA countries. If the ECC finds serious ethical violation,
or serious legal or procedural error, and if it finds that such actions threaten the
integrity of the binational panel process, then the ECC could vacate or remand the
panel decision.

Appendix B. Antidumping and Countervailing Duty Cases for Food and
Agricultural Products Initiated Since January 1, 1980
Date FiledProductCountryCase NumberPetitioner(s)
05/31/01Quick Frozen Red RaspberriesChileA-337-806IQF Red Raspberry Fair Trade Committee
05/31/01Quick Frozen Red RaspberriesChileC-337-807IQF Red Raspberry Fair Trade Committee
03/30/01Spring Table GrapesChileA-337-805Desert Grape Growers League of California
03/30/01Spring Table GrapesMexicoA-201-829Desert Grape Growers League of California

03/28/01Greenhouse TomatoesCanadaA-122-837Carolina Hydroponic Growers Inc., Eurofresh,

HydroAge, Sunblest Management LLC,
Sunblest Farms LLC, Village Farms
03/12/01MusselsCanadaA-122-836Great Eastern Mussel Farms

03/06/01PaprikaIndiaA-533-822Rezolex, Ltd.

09/29/00HoneyArgentinaA-357-812American Honey Producers Assn., Sioux
Honey Assn.
09/29/00HoneyChinaA-570-863American Honey Producers Assn., Sioux
iki/CRS-RL3129609/29/00HoneyArgentinaC-357-813 Honey Assn.American Honey Producers Assn., Sioux
g/w Honey Assn.
s.or06/07/99Nonfrozen Apple Juice ConcentrateChinaA-570-855Tree Top, Knouse Foods Cooperative, Inc.,
leak Green Valley Packers, Mason County Fruit
://wiki11/12/98Live CattleCanadaA-122-833 Packers, Coloma Frozen FoodsRanchers-Cattlemen Action Legal Foundation
http11/12/98Live CattleCanadaC-122-834Ranchers-Cattlemen Action Legal Foundation
11/12/98Live CattleMexicoA-201-824Ranchers-Cattlemen Action Legal Foundation
02/06/98Butter Cookies in TinsDenmarkA-409-801Hearthside Baking Company Inc, D/B/A
Maurice Lenell Cooky Co.
02/06/98Butter Cookies in TinsDenmarkC-409-802Hearthside Baking Company Inc, D/B/A
Maurice Lenell Cooky Co.

01/06/98Preserved MushroomsChileA-337-804L.K. Bowman, Modern Mushroom Farms,

Monterey Mushrooms, et al.

01/06/98Preserved MushroomsChina PRCA-570-851L.K. Bowman, Modern Mushroom Farms,

Monterey Mushrooms, et al.

01/06/98Preserved MushroomsIndiaA-533-813L.K. Bowman, Modern Mushroom Farms,

Monterey Mushrooms, et al.

01/06/98Preserved MushroomsIndonesiaA-560-802L.K. Bowman, Modern Mushroom Farms,

Monterey Mushrooms, et al.
03/29/96Fresh TomatoesMexicoA-201-820Florida Tomatoes Growers Exchange, Florida
Fruit & Veg. Assn., et al.

Appendix B. Antidumping and Countervailing Duty Cases for Food and
Agricultural Products Initiated Since January 1, 1980
Date FiledProductCountryCase NumberPetitioner(s)
05/12/95Certain PastaItalyA-475-818Borden Foods, Hersey Foods, Gooch Foods
05/12/95Certain PastaTurkeyA-489-805Borden Foods, Hersey Foods, Gooch Foods
05/12/95Certain PastaItalyC-475-819Borden Foods, Hersey Foods, Gooch Foods
05/12/95Certain PastaTurkeyC-489-806Borden Foods, Hersey Foods, Gooch Foods

10/03/94HoneyChina PRCA-570-838American Beekeeping Federation, Inc.;

American Honey Producers Assn.

06/08/94Canned PineappleThailandA-549-813Maui Pineapple Company, LTD.

02/13/94Fresh Cut RosesColombiaA-301-801Floral Trade Council
02/13/94Fresh Cut RosesEcuadorA-331-801Floral Trade Council
01/31/94Fresh GarlicChina PRCA-570-831Fresh Garlic Producers Association
03/19/91Tart Cherry Juice & ConcentrateGermanyA-428-809Cherry Marketing Institute
03/19/91Tart Cherry Juice &ConcentrateYugoslaviaA-479-803Cherry Marketing Institute
iki/CRS-RL3129601/05/8905/21/86Fresh Chilled and Frozen PorkCertain Fresh Cut FlowersCanadaCanadaC-122-807A-122-604Various (22 Total)Floral Trade Council
g/w05/21/86Certain Fresh Cut FlowersMexicoA-201-601Floral Trade Council
s.or05/21/86Certain Fresh Cut FlowersCosta RicaA-223-602Floral Trade Council
leak05/21/86Certain Fresh Cut FlowersColombiaA-301-601Floral Trade Council
://wiki05/21/8605/21/86Certain Fresh Cut FlowersCertain Fresh Cut FlowersColombiaEcuadorA-301-602A-331-602Floral Trade Council Floral Trade Council
http05/21/86Certain Fresh Cut FlowersChileA-337-602Floral Trade Council
05/21/86Certain Fresh Cut FlowersKenyaA-779-601Floral Trade Council
05/21/86Certain Fresh Cut FlowersCanadaC-122-603Floral Trade Council
05/21/86Certain Fresh Cut FlowersCosta RicaC-223-601Floral Trade Council
05/21/86Certain Fresh Cut FlowersColombiaC-301-601Floral Trade Council
05/21/86Certain Fresh Cut FlowersColombiaC-301-601Floral Trade Council
05/21/86Certain Fresh Cut FlowersEcuadorC-331-601Floral Trade Council
05/21/86Certain Fresh Cut FlowersPeruC-333-601Floral Trade Council
05/21/86Certain Fresh Cut FlowersChileC-337-601Floral Trade Council
05/21/86Certain Fresh Cut FlowersNetherlandsC-421-601Floral Trade Council
05/21/86Certain Fresh Cut FlowersIsraelC-508-603Floral Trade Council
05/21/86Certain Fresh Cut FlowersKenyaC-779-602Floral Trade Council
05/09/86Frozen Concentrated Orange JuiceBrazilA-351-605Florida Citrus Mutual
09/26/85In-Shell PistachiosIranA-507-502California Pistachio Commission, Blackwell
Land Co., California Orchards

09/26/85In-Shell PistachiosIranC-507-501California Pistachio Commission, Blackwell

Appendix B. Antidumping and Countervailing Duty Cases for Food and
Agricultural Products Initiated Since January 1, 1980
Date FiledProductCountryCase NumberPetitioner(s)
Land Co., California Orchards
09/24/85RiceThailandC-549-503Rice Millers Association
09/18/85Table WineFranceA-427-504American Grape Growers Alliance for Fair
Trade, CA. Assn. of Grape Growers
09/18/85Table WineW. Germany A-428-501American Grape Growers Alliance for Fair
Trade, CA. Assn. of Grape Growers
09/18/85Table WineItalyA-475-501American Grape Growers Alliance for Fair
Trade, CA. Assn. of Grape Growers
09/18/85Table Wine FranceC-427-505American Grape Growers Alliance for Fair
Trade, CA. Assn. of Grape Growers
09/18/85Table WineW. Germany C-428-502American Grape Growers Alliance for Fair
Trade, CA. Assn. of Grape Growers
iki/CRS-RL3129609/18/85Table WineItalyC-475-502American Grape Growers Alliance for Fair Trade, CA. Assn. of Grape Growers
g/w07/18/85Red RaspberriesCanadaC-122-504Washington Red Raspberry Commission,
s.or Red Raspberry Commission of Oregon
leak03/26/85Lamb MeatNew ZealandC-614-503American Lamb Company
://wiki11/02/8407/03/84Live SwineRed RaspberriesCanadaCanadaC-122-404A-122-401National Pork Producers CouncilWashington Red Raspberry Commission,
http Oregon Caneberry Commission, American
Frozen Food Institute
04/19/84Lamb MeatNew ZealandA-614-401American Lamb Company
01/27/84Table WineIndiaA-427-401Amer. Grape Growers Alliance for Fair Trade
01/27/84Table WineFranceC-427-402Amer. Grape Growers Alliance for Fair Trade
01/27/84Table WineItalyC-475-402Amer. Grape Growers Alliance for Fair Trade
01/27/84Table WineItalyC-475-403Amer. Grape Growers Alliance for Fair Trade

09/30/83Fresh Cut FlowersColombiaA-301-004California Floral Trade Council and Roses Inc.

09/30/83Fresh Cut FlowersMexicoC-201-016California Floral Trade Council and Roses Inc.

03/14/83Pork Rind PelletsMexicoC-201-014Evans Food Products
11/03/82Fresh AsparagusMexicoC-201-011NA
04/28/81Lamb MeatAustraliaA-602-003NA
04/28/81Lamb MeatNew ZealandA-614-001NA
Sources: U.S. International Trade Commission; International Trade Administration. Case numbers beginning with “A” are antidumping,
and those with “C” are countervailing duty filings. NA: not readily available.