Q: What is Section 301?  Congress enacted Section 301 as part of the Trade Act of 1974, and it is the principal law authorizing the U.S. government to address unfair trade practices.  Section 301 directs the President to identify countries that are engaging in unfair trade practices, and to take trade actions against those countries, including sanctions if necessary, to remedy the problem.  The administration can initiate a Section 301 case itself, and it can accept outside petitions.  Any interested person can file a Section 301 petition requesting that the administration investigate claims about unfair trade practices and take steps to remedy these practices. 

Q: What kinds of unfair trade practices does Section 301 address?  The administration can take action under Section 301 if a country is: 1) denying the U.S. its rights under a trade agreement; or 2) engaging in unjustifiable, unreasonable or discriminatory acts, policies, or practices that burden or restrict U.S. commerce.  An act can be found unreasonable even if it does not violate the specific rules of a trade agreement, as long as it is “unfair and inequitable.” In 1988, Congress amended the law to specify that persistent violations of internationally recognized workers’ rights – including freedom of association, the right to organize and bargain collectively, prohibitions on forced and child labor, and standards for minimum wages, hours and occupational safety and health – constitute an “unreasonable” practice that is actionable under Section 301. 

Q: Has Section 301 ever been used to investigate workers’ rights violations?  No.  The administration has never self-initiated a case on workers’ rights under Section 301, and no outside petitions have been filed on workers’ rights grounds.  While trade unions have made frequent use of other workers’ rights provisions in U.S. trade law – including in the Generalized System of Preferences and the Overseas Private Investment Corporation statute – the AFL-CIO’s China petition will be the first Section 301 petition ever filed on violations of workers’ rights.

Q: How do Section 301 petitions work?  After the petition is filed, the U.S. Trade Representative (USTR) has 45 days to decide whether to initiate an investigation.  In the case of a petition alleging an “unreasonable” practice (instead of a trade agreement violation), USTR can refuse to investigate only if it finds that: 1) the country is not engaged in unreasonable practices; 2) these unreasonable practices do not burden U.S. commerce; or 3) action by USTR to address these practices would not be “appropriate.”  If USTR does initiate an investigation, it has one year to complete it and to decide what action, if any, to take against the country in question.

Q: What action does Section 301 authorize to remedy unfair trade practices?  Section 301 authorizes USTR to suspend benefits under a trade agreement, impose duties or other restrictions on imports, enter into a binding agreement with the country to end its unfair trade practices, and take all other “appropriate and feasible” action to eliminate the unfair trade practices at issue.

Q: Does Section 301 work?  Yes.  Through aggressive use of Section 301 and the threat of trade sanctions, the U.S. has been able to reach market access agreements with China, Korea, Taiwan, and Japan for supercomputers, satellites, citrus, and other sectors.  In testimony before the Senate Finance Committee in 1996, U.S. Trade Representative Charlene Barshefsky explained the importance of Section 301 in moving China to reach new market-opening agreements with the U.S. on textiles and apparel and intellectual property.  She stated, “Would China conclude any meaningful agreement with us without the threat of sanctions?  No.”