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Threat of trade war grows thanks to Zadroga 9/11 compensation law

We're still waiting for this story to be reported by all those publications that campaigned so vigorously last year for passage of H.R. 847, the James Zadroga 9/11 Health and Compensation Act. From The Economic Times of India, "Govt to move WTO if Visa talks with US fail next month":

NEW DELHI: With the recent visit of US commerce secretary Gary Locke failing to address India's concern on professional visa fee increase and imposition of additional duties on government imports, the country will try for one last time to settle the issue bilaterally next month.

Commerce secretary Rahul Khullar will meet US undersecretary of commerce Francisco Sanchez in March to settle the issue, failing which India would approach the World Trade Organsation, or WTO, a senior official has said.

"We have already successfully demonstrated to the EU that we don't hesitate going to the WTO if we are wronged. It will not be any different with the US," a commerce department official told ET.

At issue is the final funding mechanism for the $4.2 billion Zadroga 9/11 bill: a 2 percent excise fee on foreign manufacturers/companies located in countries where the U.S. does not have an international procurement agreement, and an extension of fees until 2015 on H-1B and L-1 visas.

Both provisions hit India's software and other high-tech companies especially hard.

Only one media outlet we find has reported at any length on the U.S. reaction to India's unhappiness with the legislation, which reopens and expand the 9/11 compensation fund. That's the India-based CNBC-18, which interviewed Commerce Secretary Locke on the issue during Locke's visit to India earlier this month. The resulting story, "US visa fee hike temporary; not aimed at India: Gary Locke," is confusing, as if the Secretary and reporter were talking past one another.

Q: When you talk about more jobs for people of India, I remember when President Obama was here and one of the key messages that he took home in the manner the entire announcement was made about how India is also creating jobs for the United States. But I am going to come back to the issue of the visa fee hike. It has sent out a signal and you talk to people around here and they say that this is a irritant, it has been made to sort of apron that the United States is no longer willing to welcome Indian software professionals and there are continuously barriers that are being imposed in the entry and clearly services for India as an employment generator is also very important. How would you respond to some of this perception and criticism that people make of this matter?

A: I think that you need to look at the legislation and it was a temporary measure. It's a measure to raise money so that we could actually address some of the problems that we have on the US-Mexican and the US-Canada border. So it is not really aimed at the people of India but really viewed as a mechanism by which we could enhance the security of the US border.

And it is not targeted at just Indians or Indian technology companies. It is aimed at all companies that have more than 50% of their workers that are on H1 visas. Again it's a temporary measure. But we understand the sensitivity of this and we know that a lot of people are looking at other ways by which they can raise the same amount of money to address these issues of border security.

Q: When you call it a temporary measure can you elaborate on this?

A: It's only in place for a few years. And so it's not a permanent measure and it only covers companies of a certain size, with a certain percentage of workers that have these visas.

As we've noted earlier, supporters of the expanded compensation want to extend the bill's provisions beyond five years.

The India-U.S. conflict is not the only confusion and uncertainty to grow out of the legislation, passed with more demagoguery than deliberation.

Also, from Newsday (subscription):

[Federal] officials have yet to decide whether to include some conditions, which as cancer, where there is not yet hard evidence of a link to WTC toxins. Also undecided is whether people who got a payment from the 2001 Victim Compensation Fund but who now are much sicker should be eligible for additional cash. By taking the earlier payout, they waived their rights to any further settlements from lawsuits.

Personal injury lawyers are busy trying to expand the basis on which to make claims from the re-opened fund, as this press release makes clear.

See also earlier POL posts.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.