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Tuesday, March 23, 2010

Chinese Tire Imports: Section 421 Safeguards and the World Trade Organization (WTO)

Jeanne J. Grimmett
Legislative Attorney

On April 20, 2009, the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union filed a petition with the U.S. International Trade Commission (ITC) requesting that it initiate an investigation under Section 421 of the Trade Act of 1974, a trade remedy statute addressing import surges from China, to examine whether Chinese passenger vehicle and light truck tires were causing market disruption to U.S. tire producers. Market disruption will be found to occur under Section 421 whenever imports of a Chinese product that is "like or directly competitive with" a domestic product "are increasing rapidly ... so as to be a significant cause of material injury, or threat of material injury, to the domestic industry." The ITC initiated the investigation (TA-421-7) on April 24, 2009. 

As a result of its investigation, the ITC in June 2009 voted 4-2 that imports of the subject tires were causing domestic market disruption and recommended that the President impose an additional duty on these items for three years at an annually declining rate. The ITC also recommended expedited consideration of trade adjustment assistance applications filed by affected firms or workers. On September 11, 2009, President Obama proclaimed increased tariffs on Chinese tires for three years effective September 26, 2009, albeit at lower rates than those recommended by the ITC. The tariff increase is 35% ad valorem in the first year, 30% in the second year, and 25% in the third year. The President also directed the Secretaries of Labor and Commerce to expedite applications for trade adjustment assistance and to provide other available economic assistance to affected workers, firms, and communities. The President may review the tariffs in six months and, after receiving an ITC report on the probable effects of any change, may modify, reduce or terminate them. Although six petitions were filed under Section 421 in the past and the ITC found that market disruption existed in four out of six of its investigations, President Bush decided against providing import relief under the statute in these earlier cases. 

Section 421 was enacted as one element of 2000 legislation that permitted the President to grant most-favored-nation (MFN) tariff treatment to Chinese products upon China's accession to the World Trade Organization (WTO). Section 421 authorizes the President to impose safeguards— i.e., temporary measures such as import surcharges or quotas—on Chinese goods if domestic market disruption is found. The statute implements a China-specific safeguard mechanism contained in China's WTO Accession Protocol that may be utilized by WTO Members through December 2013. The Protocol provision is separate from Article XIX of the General Agreement on Tariffs and Trade (GATT) 1994 and the WTO Agreement on Safeguards, which allow WTO Members to respond to injurious import surges generally but on a stricter basis than under the Protocol. A major difference is that the Protocol provision permits a safeguard to be applied only to Chinese products while the Safeguards Agreement requires that a safeguard be applied to a product regardless of its source. 

China filed a WTO complaint against the United States on September 14, 2009, and requested a dispute panel on December 21, 2009, claiming that the Section 421 tariffs violate U.S. GATT obligations to accord Chinese tires MFN tariff treatment and not to exceed negotiated tariff rates, that the United States imposed tariffs under China's Accession Protocol without first attempting to justify them under general GATT and WTO safeguard provisions, and that Section 421 and its application in this case violate U.S. obligations under the Protocol. A dispute panel was established on January 19, 2010; panelists were appointed March 12, 2010. This will be the first WTO dispute panel to consider the obligations of an importing WTO Member under the China specific safeguard. 
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Date of Report: March 18, 2010
Number of Pages: 29
Order Number: R40844
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Federalism Issues in Surface Transportation Policy: Past and Present

Robert Jay Dilger
Senior Specialist in American National Government

American federalism, which shapes the roles, responsibilities, and interactions among and between the federal government, the states, and local governments, is continuously evolving, adapting to changes in American society and American political institutions. The nature of federalism relationships in surface transportation policy has also evolved over time, with the federal government's role becoming increasingly influential, especially since the Federal-Aid to Highway Act of 1956 which authorized the interstate highway system. In recent years, state and local government officials, through their public interest groups (especially the National Governors Association, National Conference of State Legislatures, National Association of Counties, National League of Cities, U.S. Conference of Mayors, and American Association of State Highway and Transportation Officials) have lobbied for increased federal assistance for surface transportation grants and increased flexibility in the use of those funds. They contend that they are better able to identify surface transportation needs in their states than federal officials and are capable of administering federal grant funds with relatively minimal federal oversight. They also argue that states have a long history of learning from one another. In their view, providing states flexibility in the use of federal funds results in better surface transportation policy because it enables states to experiment with innovative solutions to surface transportation problems and then share their experiences with other states. Others argue that the federal government has a responsibility to ensure that federal funds are used in the most efficient and effective manner possible to promote the national interest in expanding national economic growth and protecting the environment. In their view, providing states increased flexibility in the use of federal funds diminishes the federal government's ability to ensure that national needs are met. Still others have argued for a fundamental restructuring of federal and state government responsibilities in surface transportation policy, with some responsibilities devolved to states and others remaining with the federal government. 

Congressional attention to federalism issues in surface transportation policy tends to increase during reauthorizations of the federal highway and mass transit program. The current highway and mass transit program, the $286 billion, Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2005: A Legacy for Users (SAFETEA, P.L. 109-59), after being extended several times, is set to expire on December 31, 2010. Its reauthorization has generated considerable legislative activity during the 111th Congress. Issues addressed by Congress include SAFETEA's funding level and financing, especially proposals addressing the Highway Trust Fund's fiscal sustainability, state funding guarantees, and congressional earmarks. 

This report provides an historical perspective on contemporary federalism issues in surface transportation policy that are likely to be addressed by Congress during the 111th Congress, including possible devolution of programmatic responsibility to states and proposals to change state maintenance-of-effort requirements and state cost matching requirements. 
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Date of Report: March 22, 2010
Number of Pages: 36
Order Number: R40431
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Thursday, March 11, 2010

Federalism Issues in Surface Transportation Policy: Past and Present

Robert Jay Dilger
Senior Specialist in American National Government

American federalism, which shapes the roles, responsibilities, and interactions among and between the federal government, the states, and local governments, is continuously evolving, adapting to changes in American society and American political institutions. The nature of federalism relationships in surface transportation policy has also evolved over time, with the federal government's role becoming increasingly influential, especially since the Federal-Aid to Highway Act of 1956 which authorized the interstate highway system. In recent years, state and local government officials, through their public interest groups (especially the National Governors Association, National Conference of State Legislatures, National Association of Counties, National League of Cities, U.S. Conference of Mayors, and American Association of State Highway and Transportation Officials) have lobbied for increased federal assistance for surface transportation grants and increased flexibility in the use of those funds. They contend that they are better able to identify surface transportation needs in their states than federal officials and are capable of administering federal grant funds with relatively minimal federal oversight. They also argue that states have a long history of learning from one another. In their view, providing states flexibility in the use of federal funds results in better surface transportation policy because it enables states to experiment with innovative solutions to surface transportation problems and then share their experiences with other states. Others argue that the federal government has a responsibility to ensure that federal funds are used in the most efficient and effective manner possible to promote the national interest in expanding national economic growth and protecting the environment. In their view, providing states increased flexibility in the use of federal funds diminishes the federal government's ability to ensure that national needs are met. Still others have argued for a fundamental restructuring of federal and state government responsibilities in surface transportation policy, with some responsibilities devolved to states and others remaining with the federal government. 

Congressional attention to federalism issues in surface transportation policy tends to increase during reauthorizations of the federal highway and mass transit program. The current highway and mass transit program, the $286 billion, Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2005: A Legacy for Users (SAFETEA, P.L. 109-59), after being extended several times, is set to expire on March 28, 2010. Its reauthorization has generated considerable legislative activity during the 111th Congress. Issues addressed by Congress include SAFETEA's funding level and financing, especially proposals addressing the Highway Trust Fund's fiscal sustainability, state funding guarantees, and congressional earmarks. 

This report provides an historical perspective on contemporary federalism issues in surface transportation policy that are likely to be addressed by Congress during the 111th Congress, including possible devolution of programmatic responsibility to states and proposals to change state maintenance-of-effort requirements and state cost matching requirements.


Date of Report: March 4, 2010
Number of Pages: 36
Order Number: R40431
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Wednesday, March 10, 2010

Public Transit Program Issues in Surface Transportation Reauthorization

William J. Mallett
Specialist in Transportation Policy

As enacted in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA), P.L. 109-59, federal public transit programs were authorized through September 2009. Congress has so far failed to enact a long term reauthorization; consequently, federal transit programs are operating under the authority of continuing resolutions. The longterm reauthorization of transit programs, along with other major surface transportation programs, may take place in a constrained funding environment due to the inadequacy of receipts into the Mass Transit Account of the Highway Trust Fund (HTF), the source of approximately 80% of transit program monies. In the past three surface transportation authorizations, by contrast, federal transit programs received substantial funding increases. In nominal terms, SAFETEA authorized a 46% increase in transit spending over the Transportation Equity Act for the 21st Century (TEA- 21), and more than double the amount authorized in the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). 

The two major transit funding programs are the Urbanized Area Formula Grants Program and the Capital Investment Program, which includes the "New Starts" program, the Rail Modernization program, and the Bus and Bus Facility Capital program. Of the nearly $53 billion authorized by SAFETEA for transit programs from FY2004 through FY2009, the Urbanized Area Formula Program accounts for 42% of the total ($22.2 billion), and the Capital Investment Program accounts for 43% ($22.7 billion). The remaining 15% ($7.7 billion) authorized by SAFETEA funds several other programs, such as the Rural Formula Program, state and metropolitan planning, research, and FTA operations. 

With looming fiscal difficulties but growing demand on the transportation system, there may be significant debate about the overall funding level, the structure of the current transit program, its priorities, and the resulting distribution of federal support geographically and by transit mode. Three among many possible alternatives for restructuring federal public transit programs are outlined in this report: (1) focusing more resources on major capital expenses for rehabilitation and expansion of transit services; (2) supporting and rehabilitating existing services rather than major capital expansion; and (3) the elimination of capital improvement programs altogether to be replaced by a simple "block grant" that could be distributed based on transit ridership or population. Debate is likely to be particularly intense over the size and structure of the New Starts program that provides federal funding for expanding transit capacity and accounts for about 18% of total transit program funding. 

This report begins with a brief background on the characteristics of the transit sector and ridership trends. This is followed by a description of the current structure of the federal transit program. The next sections focus on potential reauthorization issues: the overall funding and structure of the transit program; the size and shape of the New Starts program including funding level, types of transit modes funded, project evaluation criteria, the share of local matching funds, and distribution of New Starts funding; issues with the Fixed Guideway Modernization program; distribution of federal funds to rural and small cities; and federal support for paratransit. 



Date of Report: February 23, 2010
Number of Pages: 23
Order Number: RL34171
Price: $29.95

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Monday, March 1, 2010

Repairing and Reconstructing Disaster-Damaged Roads and Bridges: The Role of Federal-Aid Highway Assistance

Robert S. Kirk
Specialist in Transportation Policy

The major highways and bridges damaged during the June 2008 Midwest flooding and the 2005 Gulf of Mexico hurricanes, as well as the I-35W bridge, which collapsed in Minneapolis on August 1, 2007, are part of the federal-aid highway system and are therefore eligible for assistance from the Department of Transportation (DOT) through the Emergency Relief Program (ER) of the Federal Highway Administration (FHWA). For disaster damaged roads that are not federal-aid highways, states may request reimbursement for emergency road repairs and debris removal from the Federal Emergency Management Agency (FEMA). FEMA may also allow for limited funding under its Public Assistance Program for such things as snow removal and related operating costs during extreme snowfalls, which are not eligible for ER funds. 

This report describes FHWA assistance for the repair and reconstruction of disaster-damaged highways and bridges or catastrophic failures (such as a bridge collapse). It begins with a brief discussion of the legislative origins of federal assistance and describes the ER program in its current form. The report then discusses eligibility issues and program operation. The report briefly describes the major findings of a recent Government Accountability Office (GAO) report on ER.


Date of Report: February 22, 2010
Number of Pages: 11
Order Number: RS22268
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.