House Republicans are threatening to slash the budget of the government's main trade agency this week over its handling of a dispute with Japan.
Another spat could erupt in the House this week over state and local economic sanctions, which some congressmen want to protect from being overturned by the World Trade Organization.
Rep. Mac Collins, Georgia Republican, has proposed an amendment to a spending bill that would slash money for the Office of the U.S. Trade Representative by 25 percent, or $6 million, in the next fiscal year. The House is expected to take up the bill this week.
Rep. Sonny Callahan, the Alabama Republican who heads a House appropriations subcommittee, has suggested he may seek funding cuts of 5 percent, 10 percent or 25 percent for the agency.
Mr. Callahan and Mr. Collins, whose district is home to Columbus, Ga.-based insurer American Family Life Assurance Co., (AFLAC), hope their threats get the attention of the trade office, which they believe has not done enough to enforce insurance-related trade agreements with Japan.
"Our office has been meeting with them for the past two years about this and very little has happened," a Collins spokeswoman said. "We'd like to just see them do their job."
U.S. insurance companies complain that Japan is failing to honor 1994 and 1996 agreements that require it to open its primary insurance markets to foreign companies before allowing large Japanese insurers to enter the market for cancer insurance and other supplemental policies. U.S. companies have had trouble making inroads in Japan's insurance market except in the small market for supplemental policies.
The Japanese government insists it is complying with the highly technical agreements.
Jay Ziegler, spokesman for U.S. Trade Representative Charlene Barshefsky, defended his agency, saying American companies would not be able to compete in the …