Letter To Ambassador Peter Allgeier, Acting United States Trade Representative

Letter

Several members of the Connecticut Congressional Delegation condemned today's announcement by the Office of the United States Trade Representative (USTR) of a new tariff that could force Connecticut-based Nestle Waters North America to lay off 100 workers. Nestle Waters is the largest American importer of Italian mineral water, which would be affected by the new tariff. Today's announcement ignores President Obama's directive that all pending regulations be halted until his Administration can conduct a full legal and policy review of each matter.

When Senators Chris Dodd (D-CT) and Joe Lieberman (ID-CT) and Representatives John Larson (CT-1), Joe Courtney (CT-2), and Jim Himes (CT-4) first learned that the USTR was moving toward imposing this retaliatory tariff earlier this week, they immediately sent a letter to Ambassador Peter Allgeier, the acting USTR, urging him to reconsider his decision.

"At a time when Connecticut is struggling with record high unemployment, the last thing our government should be doing is imposing tariffs that will cause higher prices and more layoffs," said Dodd. "I am disappointed that Ambassador Allgeier ignored our request to rethink this short-sighted decision, and hope that President Obama's USTR team will act quickly to review this matter."

"Levying new tariffs on goods destined for American consumers is the wrong action to take at a time when Americans are already suffering from lower wages and higher unemployment," said Lieberman. "In this case, the USTR action will directly impact jobs in Connecticut, and I urge the Acting USTR to reconsider."

Larson said, "this is just another example of new regulation the Bush Administration tried to enact in the dark of night. Unfortunately, they did it without a full consideration of the impact it will have on our economy and our middle class. Connecticut is already losing jobs to layoffs and our nation is facing the worst economic crisis since the Great Depression. Why would we do something that would bring about even more pain and hardship for working Americans? I hope the new Administration carefully reviews this policy and halts its implementation."

"This is the wrong tariff at the wrong time that will hurt Connecticut's importers. At this time of economic turbulence in our nation, I join my colleagues in urging USTR to reconsider this tariff that could jeopardize over 100 jobs in our state," said Courtney.

"Government action significantly affects local jobs," said Himes. "During these tough economic times, our policies must help keep and create jobs in Connecticut."

The full text of the letter to Ambassador Allgeier is below:

Dear Ambassador Allgeier:

We write today concerning troubling reports that the USTR is considering imposing a 100 percent ad-valorem tariff on Italian mineral and aerated waters tomorrow, in addition to numerous other European imports. If these reports are indeed true, we urge your office to reconsider this decision because of the direct harm it will cause to the Connecticut economy. According to some estimates, a 100 percent ad valorem duty would cause an 85 percent decline in Italian mineral water sales and halt the distribution of Italian mineral water to supermarkets and restaurants. Such a drop off in sales would force Nestle Waters North America, the largest U.S. importer of Italian mineral water which is based in Connecticut, to potentially layoff 100 of its Connecticut employees including forklift drivers, warehouse managers and supervisors, office administrators, and sales personnel. Such job losses would come at a time when Connecticut is experiencing record high unemployment, and has lost more than 1,000 jobs in the last month alone.

We believe that if, as reports suggest, you have decided to impose retaliatory tariffs on Italian mineral waters, that this decision deserves further consideration and immediate review by President Obama's USTR team before its implementation. This review would be consistent with a White House Directive to halt all pending regulations until the new Administration can conduct a full legal and policy review of all pending matters.

As you know, the fundamental purpose of the United States' retaliatory tariffs is to secure changes in WTO-inconsistent European Community measures. There is no indication that changing the product list at this time will cause the European Community to revise the disputed measures. Moreover there is every indication that this decision will lead to an escalating trade war between the United States and the European Union. Trade wars severely harm all parties during a severe economic downturn and are especially harmful now, a time when international cooperation is essential to solve the global economic crisis.

Given all the negative ramifications of increasing tariffs on Italian mineral and aerated waters, we believe that now would be the wrong time to take this action.

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