Strategies to Influence U.S. Commercial Policy

STRATEGIES TO INFLUENCE U.S. COMMERCIAL POLICY JoAnn Fagot Aviel M, .ANY DEVELOPING COUNTRIES ARE ATTEMPTING tO increase nontraditional exports, particularly manufactured products, at a time when demands for import restrictions are increasing in the United States and in other industrial countries. Disputes are likely to increase, and a knowledge ofeffective negotiating strategies will be vital for officials from developing countries. In international forums such as the General Agreement on Tariffs and Trade (gatt) U.S. representatives press hard for liberalizing trade in agriculture, services, and high-technology industries —areas in which the United States enjoys a strong competitive position. At the same time, they have negotiated a more restrictive trade regime for textiles and apparel under the Multi-Fiber Agreement, and have imposed quotas on textiles, steel, and automobiles. Protectionist pressures are increasing in Congress, although present trade legislation already protects the American producer. Under present trade laws, any U.S. firm that feels threatened by foreign imports may file a petition alleging injury with the U.S. Department of Commerce. If the imports originate in a country that has signed the gatt Code on Subsidies, the U.S. International Trade Commission (itc) holds hearings. If claims of injury can be substantiated, quotas are applied. If the country has not signed the Code, however, the Department of Commerce must then investigate whether the country grants subsidies to its exports. If such subsidies are found, the department automatically applies countervailing duties. JoAnn Fagot Aviel is professor of international relations at San Francisco State University and is the author of Resource Shortages and World Politics. 205 206 SAIS REVIEW As trade disputes between developing countries and the United States multiply, officials from these developing countries must consider the most effective strategies to employ in the short run (in trade negotiations under existing rules) and in the long run (in attempting to change the rules in their favor). Of the short-term negotiating strategies, protest, threat and retaliation, the mobilization of allies, and the mastery of negotiating techniques and technical details are the most effective methods. Long-term strategies involve the mobilization of allies inside the United States, the mobilization of allies outside the United States, and a change in the country's internal structure and legislation. These strategies are not mutually exclusive and can be employed in different combinations. An analysis of the cases in which each of the aforementioned short-term and long-term strategies have been used is included in this paper in the hope that such scrutiny will elucidate problems as well as potential solutions. The first countervailing duty cases filed against Peru in 1982 are examples of one country's unsuccessful utilization of the protest strategy. Peruvian government, business, and labor officials protested when the United States informed Peru that a petition of complaint had been filed and that an investigation would determine the countervailing duties to be assessed. Labor and industry officials called on the U.S. embassy and wrote articles in Peruvian newspapers protesting the action. Government officials tried to impress upon U.S. officials that the outcome of this case could adversely affect Peru's relations with the United States. American officials maintained that their freedom of action was limited by U.S. law, which prevents the consideration of foreign policy implications. When the Commerce Department sent a team of business economists and accountants to Peru to determine whether such a subsidy existed, Peruvian officials were frustrated with the team's inability to discuss high policy. At the request of the U.S. embassy in Peru, more senior officials were sent down to talk with the Peruvians. The U.S. embassy attempted to inform the U.S. State Department of the Peruvian government's discontent, but this effort had little effect on the outcome.1 President Belaunde cancelled a planned trip to Washington when the Commerce Department refused to delay its announcement that countervailing duties would be assessed, which was scheduled to be made public the day he was to arrive in Washington. In a study by John Odell of twenty-five cases from 1960 to 1978 involving disputes between the United States and Latin American nations 1. Interview with Gordon Jones, Economic Officer...