Thursday, March 10, 2011

[IWS] CRS: WORLD TRADE ORGANIZATION (WTO) DECISIONS & THEIR EFFECT IN U.S. LAW [4 February 2011]

IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor----------------------
Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________

 

Congressional Research Service (CRS)

 

World Trade Organization (WTO) Decisions and Their Effect in U.S. Law

Jeanne J. Grimmett, Legislative Attorney

February 4, 2011

http://www.opencrs.com/document/RS22154/2011-02-04/download/1005/

[full-text, 14 pages]

 

Summary

Congress has comprehensively dealt with the legal effect of World Trade Organization (WTO) agreements and dispute settlement results in the United States in the Uruguay Round Agreements Act (URAA), P.L. 103-465. The act provides that domestic law prevails over conflicting provisions of WTO agreements and prohibits private remedies based on alleged violations of these agreements. As a result, provisions of WTO agreements and WTO panel and Appellate Body reports adopted by the WTO Members that are in conflict with federal law do not have domestic legal effect unless and until Congress or the executive branch, as the case may be, takes action to modify or remove the conflicting statute, regulation, or regulatory action. Violative state laws may be withdrawn by the state or, in rare circumstances, invalidated through legal action by the federal government.

 

The URAA also contains requirements for agencies to follow where a change in a regulation or the issuance of a new agency determination in a trade remedy proceeding is needed to comply with a WTO decision and existing law may be sufficient to carry out the action.

 

While the URAA prohibits private rights of action based on Uruguay Round agreements, plaintiffs, in cases brought under other statutes, have argued that the agency actions they are challenging in court are inconsistent with a WTO agreement or a WTO decision and should conform with U.S. WTO obligations. Although courts have deemed WTO decisions to be persuasive, they have also held that they are not binding on the United States, U.S. agencies, or the judiciary, leaving the issue of whether and how the United States complies in a particular WTO proceeding to the executive branch.

 

Legislation introduced in recent Congresses generally reflected congressional concerns that the WTO Appellate Body had interpreted WTO agreements in an overly broad manner to the detriment of the United States and that the executive branch had in some cases too readily used existing statutory authorities to comply with these decisions, particularly where U.S. trade remedies were involved. Legislation particularly focused on WTO decisions finding the U.S. use of "zeroing" in antidumping proceedings to be in violation of the WTO Antidumping Agreement and an administrative modification instituted by the Department of Commerce in original antidumping investigations in response to one of the earliest of these decisions. Under the practice, the department calculates dumping margins by taking into account only sales below fair market value--generally the price in the exporting country--and assigns a zero value to sales at or above this price. While it is argued that zeroing improperly creates or inflates dumping margins, U.S. courts have consistently upheld the department's use of the practice as valid under U.S. antidumping law.

 

Contents

Uruguay Round Agreements Act (URAA) ...................................................................................1

Domestic Legal Effect of WTO Decisions Under the URAA.......................................................2

Federal Law..........................................................................................................................2

State Law.............................................................................................................................3

Preclusion of Private Remedies .............................................................................................4

Domestic Administrative Implementation of WTO Decisions Under the URAA..........................5

Domestic Regulations and Administrative Practices (URAA, § 123(g)) .................................5

Determinations in Trade Remedy Proceedings (URAA, § 129)..............................................5

Judicial Responses ......................................................................................................................7

Recent Legislation .................................................................................................................... 11

111th Congress Legislation .................................................................................................. 11

Contacts

Author Contact Information ...................................................................................................... 11



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Stuart Basefsky                   
Director, IWS News Bureau                
Institute for Workplace Studies 
Cornell/ILR School                        
16 E. 34th Street, 4th Floor             
New York, NY 10016                        
                                   
Telephone: (607) 255-2703                
Fax: (607) 255-9641                       
E-mail: smb6@cornell.edu                  
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