Hills Plays Down Importance of Priority Trade List Due to be Published May 28

The Bush Administration cautioned Friday that the lists it will publish May 28 setting priorities for attacking other countries’ foreign trade rules are designed only to launch negotiations and will not necessarily result in U.S. retaliation.

U.S. Trade Representative Carla A. Hills issued the admonition amid intensifying rhetoric in Congress demanding that the United States “target” Japan and other countries for such action--as well as growing complaints from U.S. trading partners that Washington is acting illegally.

The compilation of such lists, mandated by the Omnibus Trade Act that Congress passed last year, is being widely described as a step that mandates retaliation against other countries for maintaining unfair trade practices.

Final Weeks of Deliberation

Actually, however, placing a country on such a “priority” list is designed only to start negotiations aimed at persuading that country to open its markets further. The law gives the other country up to two years to meet U.S. demands. Even after that time--presuming the negotiations are unsuccessful--retaliation is not certain.

Hills told reporters that any notion that retaliation is mandatory under the new procedures is “a misunderstanding.” She asserted that the Administration’s long-term trade policy “still is to open markets and expand trade. I would like to reiterate that,” she said.

Hills’ office is beginning its final two weeks of deliberations in preparation for publishing the lists. Ultimately, the decision on whether to include a country will be made by the President with the advice of the Cabinet.

The approach of the May 28 deadline has sent trade officials from other countries flocking to the U.S. Trade Representative’s office to plead their cases. for being kept off the list of “priority” countries. Japan and South Korea, in particular, have sent teams of senior officials. And other countries, ranging from Thailand to Indonesia, have offered proposals to resolve outstanding trade disputes. Indonesia even offered to protect some U.S. patents.

At the same time, however, the European Community has said that it will not take part in negotiations that stem from the May 28 listings, contending that the U.S. action violates world trade rules and that Washington should take its complaints to international organizations.

Hills said Friday that she thinks the new get-tough requirements have been useful in providing the Administration with added leverage but added that she wishes the deadlines allowed more time because some promising negotiations have been cut short.

Procedures Are Complex

“We’d have been able to negotiate more movement if we had time,” she said. “It is very difficult to negotiate with very tight time frames.”

The procedures required by the new Trade Act are complex. On May 28, the Administration must send Congress its list of countries believed to be maintaining unfair trade practices along with a list of specific practices that it hopes to eliminate.

Hills’ office must launch formal negotiations with these countries after 21 days. If U.S. demands are not satisfied in two years, Washington can retaliate with tariffs or import quotas.

The trade law also calls for similar procedures involving foreigners’ refusal to respect U.S. patents, trademarks or royalties and for barriers that other governments impose to U.S. exports of telecommunications equipment.