US revives law on trade sanctions

The return of Super 301 comes at a time when Washington is embroiled in trade disputes with the EU and Japan

WASHINGTON -- The United States has revived a controversial trade weapon known as "Super 301", which allows Washington to impose unilateral sanctions against other countries for unfair trade practices, but insists that it is not aimed at a specific country.

The move comes at a time when Washington is embroiled in trade disputes with both the European Union over trade rules for bananas and hormone-treated beef and with Japan over steel imports, and it appears keen on preventing its trade deficit from mushrooming.

Announcing the move on Tuesday, US Trade Representative Charlene Barshefsky said that President Bill Clinton had issued an executive order renewing the Super 301 measure of US trade law, thus authorising her office to impose sanctions for trade practices affecting US exports.

She said the Super 301 measure, which had expired in 1997, allows the US Trade Representative to identify unfair trade practices and focus US resources on eliminating those practices.

Meanwhile, US Treasury Secretary Robert Rubin, speaking before Congress, reiterated US commitment to free trade and open markets and its opposition to protectionism, but at the same time warned that Washington would act against unfair trade.

He told the Senate Finance committee: "Japan and Europe are far less open than the US. Trade should be not only open but fair, and this administration is committed to enforcing our trade laws fully to deal with unlawful practices."

The US has accused Japan of pricing its steel at unfairly low levels, while it says the EU puts Latin American banana producers at a disadvantage by giving preferential access to African, Caribbean and Pacific producers. Commenting on the US move, Japanese Premier Keizo Obuchi said: "If the US takes action unilaterally, I would be seriously concerned about it. It stands to reason that international trade is subject to international rules. We will watch it carefully."

Meanwhile, Japanese International Trade and Industry Minister Kaoru Yosano said that the revival of Super 301 was "a political act aimed at domestic politics", which had been taken in response to rising anti-Japan sentiment in Congress.

Joining in the condemnation, Mr Nigel Gardner, spokesman for EU Trade Commissioner Leon Brittan, said: "It looks as if the United States is bowing to domestic protectionist pressures, which we consider to be very regrettable."

But Deputy US Trade Representative Richard Fisher, who was wrapping up a visit to Japan yesterday, said that the US would do all it could to prevent this simmering trade spat from becoming the sort of serious trade battle that soured US-Japan ties in 1995.

"I think it is very important to understand that the Super 301 provision is not targeted at any specific country, including Japan." -- AFP, Reuters

Microsoft's $100-billion dollar man