U.S. State Department - 11.19.2004

U.S. Department of State

Senate Passes Bill Granting Armenia Permanent Normal Trade Relations


Bill also includes provisions on Laos, dumping law repeal, tariff suspensions

Washington -- The Senate has passed a bill that would make normal trade relations (NTR) -- otherwise known as most-favored nation status -- permanent for Armenia

The bill would also extend NTR to Laos and repeal a 1916 law that was ruled by the World Trade Organization (WTO) as a violation of U.S. obligations. 

President Bush is expected to sign the bill into law.

The 299-page bill, passed by the House of Representatives October 8, comprises hundreds of tariff suspensions on imports of goods not produced domestically and traded in small volumes.

A provision of the bill would grant permanent NTR for Armenia, which has had temporary NTR, approved year-to-year by the president.

"I hope that we will be able to consider similar treatment for Azerbaijan in the very near future," said Senator Chuck Grassley, Republican chairman of the Finance Committee.

During Senate debate on normal trade relations for Laos, Grassley spoke in favor and argued that it would help alleviate poverty and bring the country into the global marketplace. Laos is one of only four countries worldwide and the only least-developed country to which the United States has not granted NTR.

Senators from Wisconsin, home of about 33,000 Hmong refugees, argued against NTR because of what they called credible reports of Laotian army atrocities against the Hmong, a people inhabiting the mountainous regions of southern China and adjacent areas of Vietnam, Laos and Thailand.

The Bush administration had pressed for passage of the NTR provisions and for repeal of the 1916 antidumping law.

The WTO had ruled against the 1916 law, which was challenged by the European Union (EU) and Japan. Under the law -- never actually used from 1916 until the 1990s -- U.S. companies can sue foreign producers for triple damages for dumping goods on the U.S. market with the intent of injuring U.S. industry.

To date no plaintiff has ever collected damages under the 1916 law although a recent verdict against a Japanese newspaper press manufacturer remains under appeal.

The bill would repeal the 1916 law, but would not overturn any case already decided or pending under it. Whether Japan or the EU would accept such a non-retroactive change is not known.

Miscellaneous tariff bills typically pass each session of Congress routinely, but this one was held up over a succession of issues for three years. 

Some other provisions of the bill would:

-- Extend the Generalized System of Preferences (GSP) to allow duty-free treatment for hand-woven and hand-knotted carpets, a provision designed primarily to help Afghanistan and Pakistan;

-- Correct a mistake in the Trade Act of 2002 that inadvertently raised duties on certain Andean goods under the Andean Trade Preferences Act (ATPA);

-- Clarify the African Growth and Opportunity Act (AGOA), extending retroactively to October 2000 duty-free treatment for collars and cuffs;

-- Prohibit U.S. imports of archaeological, cultural and other rare items from Iraq to prevent illegal shipment of looted antiquities;

-- Amend U.S. regulatory law concerning cellar treatment for both domestic and imported natural wine in line with a 2001 international agreement to eliminate testing of wine for reasons other than health and safety.

Congressional sources have indicated they intended this provision to provide leverage in negotiations with the European Union to accept U.S. wine-making practices.

(Distributed by the Bureau of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)