Trade Bill Amendment Approved to Reduce Penalties Against Israel

An amendment to the Omnibus Trade Bill that reduces the possibility of Israel being penalized by existing trade regulations was approved by a House-Senate conference committee last week.

The amendment, introduced by Sen. Daniel Moynihan (D-N.Y.), makes it less likely that Israel will incorrectly be hit with tariff penalties aimed at foreign countries that dump products on the U.S. market or take advantage of their own export or manufacturing subsidies to challenge industries in the United States.

The Moynihan amendment is also designed to fill holes in the 1985 Free Trade Area (FTA) agreement between the United States and Israel. The provisions in the amendment are similar to those contained in the pending U.S.-Canadian FTA agreement.

The Omnibus Trade Bill is expected to be approved by Congress within a few weeks, but President Reagan has threatened to veto it as too restrictive of free trade.

Currently, when U.S. companies allege that foreign imports cause injury to their industries, such as by being sold in the United States below their fair market value or by benefiting too much from manufacturing or export subsidies, the International Trade Commission must review the complaints. Those reviews can lead the imposition of anti-dumping duties or countervailing duties against them.

Under the amendment, Israel would receive a “separate injury test” when its U.S. imports account for a small portion of foreign goods alleged to be inhibiting the sale of U.S. products. In considering injury, imports from all countries are lumped together by the Commerce Department.

“Due to a technical trade-law provision, in a number of instances, Israeli imports have been found to injure U.S. industries when the level of Israeli imports has been very small,” Moynihan explained.