U.S. NAFTA negotiators are expected to push a proposal backed by Florida-based producers that would allow seasonal growers to qualify as the domestic industry in trade remedy cases despite not representing 51 percent of the U.S. industry.
According to several sources, the proposal would allow the International Trade Commission to determine that seasonal growers constitute the “domestic industry” under specific circumstances, thus allowing regional groups representing less than 50 percent of nationwide seasonal growers to bring cases. Current trade remedy law requires that petitioners represent at least 50 percent of the domestic industry.
USTR's negotiating objectives, released in July, included instructions to negotiators to pursue “a separate domestic industry provision for perishable and seasonal products” in antidumping and countervailing duty proceedings.
Proponents of the provision point to the NAFTA objectives as proof that the administration is supportive of the proposal. Others, however, said they doubted whether the proposal would command serious consideration during NAFTA renegotiation talks, which are underway this week in Washington, DC.
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One source likened the proposal to one put forward by the U.S. at the World Trade Organization in 2006, which would have allowed seasonal growers for specific products to qualify as the domestic industry if the products were sold raw, and if their marketing seasons did not last longer than eight weeks after the products were harvested. Additionally, the WTO proposal said, “a major proportion of all sales of the like product during the marketing season” must be “made by producers that sell all or almost all of their production of the like product during that marketing season.”
I'm new to this issue, so forgive me if I've missed something obvious, but I have a couple questions here. First, would Canada and Mexico really agree to a stricter set of anti-dumping obligations as between the three NAFTA parties? In effect, the U.S. could treat Canada and Mexico less favorably than it treats other trading partners. That's the opposite of what FTAs are supposed to do.
Second, even if such a procedure under domestic law were authorized under NAFTA, wouldn't it still violate WTO obligations? I can understand the logic of pursuing such a change at the WTO (not that I agree with the policy), but making such a change pursuant to NAFTA seems odd, and leads to a potential conflict between NAFTA and the WTO.
Of course, if Canada and Mexico agree to such a provision in the NAFTA, you would think they would not bring a WTO complaint against the domestic measures that result. But just for fun, let's say they were annoyed at something else the U.S. did, and brought a WTO complaint. Maybe the proponents of making this policy change through the NAFTA renegotiation are thinking that the NAFTA provision would take precedence over the WTO obligation? This prospect would make a number of international law professors I know very excited. If this is the case, it will be interesting to see whether the proponents are relying on an implicit assumption that the later in time and more specific treaty overrides the earlier, more general one, or whether they plan to include an explicit statement that the NAFTA provision takes precedence over the WTO obligations. Regardless of which approach they take, it would be interesting to see how a WTO panel dealt with the issue.
