Assistance Available to U.S. Agricultural Producers Under U.S. Trade Law

NSIAD-98-49R: Published: Oct 20, 1997. Publicly Released: Oct 20, 1997.

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Pursuant to a congressional request, GAO provided information on: (1) the tariff reductions negotiated and provisions for creation of a private dispute settlement mechanism for Florida fruit and vegetable products under the North American Free Trade Agreement (NAFTA); (2) safeguard provisions available to U.S. producers; (3) U.S. antidumping and countervailing duty remedies available to combat other countries' unfair trade practices; and (4) assistance available to workers and communities under two NAFTA-related programs: the NAFTA Transitional Adjustment Assistance (NAFTA-TAA) program and the U.S. Community Adjustment and Investment Program under the North American Development Bank.

GAO noted that: (1) U.S. trade law provides extended tariff phaseout periods for U.S. producers of certain winter fruits and vegetables, and two means of assistance for these producers who are injured by imports, depending on the product, the volume of the imports, whether the imports are the result of an unfair trade practice, and other factors; (2) the two types of assistance are NAFTA's temporary relief from imports by government imposition of "safeguards," and redress from "dumped" or improperly subsidized products through increased duties on imports; (3) NAFTA's tariff reduction schedules build in an extended tariff phaseout period for some products (such as fresh tomatoes) that are deemed especially import sensitive; (4) these extended tariff phaseout periods provide additional time to allow farmers to adjust to international competition; (5) U.S. producers of agricultural products injured by imports may petition the government for relief in the form of safeguards; (6) safeguards may be applied globally, consistent with provisions of the General Agreement on Tariffs and Trade (GATT), or within NAFTA under either general or special agricultural safeguards; (7) in a safeguard action, the International Trade Commission (ITC) determines whether a U.S. industry has been seriously injured by increased imports and, if so, may recommend that the President temporarily increase duties or impose quotas on those products; (8) under NAFTA, a more limited bilateral safeguard may be applied under certain circumstances; (9) a NAFTA country imposing a bilateral safeguard on another NAFTA country must compensate that country sufficient to redress the injury and help the industry adust to competition; (10) a U.S. industry can obtain relief from the effects of imports if the government finds that the imports are being sold below fair market value ("dumped") or benefit from improper subsidies and materially injure the U.S. industry; (11) NAFTA created two programs to help workers or communities that might be adversely affected; (12) NAFTA-TAA provides employment and other services to workers who lost their jobs due to an increase in imports from Mexico or Canada, or a shift in production to either country; (13) NAFTA-TAA does not require that NAFTA has caused the job losses; and (14) another program, the U.S. Community Adjustment and Investment Program under the North American Development Bank, helps communities with job losses associated with NAFTA by providing loans and loan guarantees to businesses seeking to locate or expand existing operations in those areas.

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