(Rewritten with comments on the change in the Metal Tariff Trade Law)

By David Lawder

WASHINGTON, May 12 (Reuters) – U.S. Trade Representative Katherine Tai on Wednesday called on Congress to modernize the Cold War-era law that former President Donald Trump used to impose tariffs on the ‘imported steel and aluminum, and promised to solve long-standing labor rights issues. in Mexico.

In testimony before the Senate Finance Committee, Tai said authorities under Section 232 of the Trade Act of 1962 were not necessarily well suited to the need to protect U.S. steelmakers from foreign competition and that this had “shaken” the US economy and heightened tensions with trading partners.

Section 232 authorizes tariffs on goods deemed important to the national security of the United States. Tai said the Trump administration and its predecessor, Robert Lighthizer, “have done their best, given the tools we have in the books.”

The current problems in the steel and aluminum industry are due in large part to subsidized excess production capacity in China, and new tools of trade law are needed to address these challenges.

“What I would suggest is that we need the 2021 tools to meet the 2021 challenges that we have, rather than rely on the 1962 tools and modernize them for the challenges we have now,” said Tai, adding that the finance committee could help level the playing field for new workers.

Tai did not discuss the specific status changes. The European Union threatens to double tariffs on Harley-Davidson motorcycles, American-made whiskey and powerboats to 50% on June 1 if a transatlantic steel and aluminum tariff dispute fails is not resolved by then.

Tai said she was having “constructive discussions” with the EU and Britain to address excess capacity in the steel and aluminum sectors, as well as to resolve a long-standing dispute over subsidies between Boeing and Airbus.

“These talks will take time, but I believe a resolution is possible and worth pursuing,” Tai said in prepared remarks.

Tai said she will use the new factory-specific labor law enforcement provisions of the US-Mexico-Canada trade agreement to address long-standing labor issues in Mexico.

Earlier Wednesday, the USTR called for the Mexican government to look into allegations that workers’ rights were denied in a union vote at a General Motors truck factory in Mexico under the implementing provisions of the USMCA’s “rapid response” labor law.

“This use of the rapid response mechanism demonstrates that we will act when workers at certain facilities are denied their rights under the laws necessary to fulfill Mexico’s labor obligations,” Tai said.

She said the USMCA, which replaced the North American Free Trade Agreement of 1994 last year, has “the most comprehensive and enforceable labor and environmental standards of all US trade agreements.” .

Tai defended his decision to enter World Trade Organization negotiations on a waiver of intellectual property rights for COVID-19 vaccines, saying it could turn pharmaceutical companies into “heroes.” (Reporting by David Lawder; editing by Philippa Fletcher and Marguerita Choy)

Our standards: Thomson Reuters Trust Principles.