International Trade Law News

The U.S. Department of Commerce (DOC) announced today that, after reviewing the second six months of data from the monitoring program of apparel imports from Vietnam, there is insufficient evidence to warrant self-initiating an antidumping investigation. The import monitoring program began upon Vietnam’s entry into the World Trade Organization in January 2007.

Assistant Secretary for Import Administration David Spooner said that DOC's “investigation reveals that prices of Vietnamese apparel are in line with, and in most cases even exceed, other major suppliers, including Central America.”

During its review DOC examined import data for five different apparel product groups from Vietnam – trousers, shirts, underwear, swimwear and sweaters – during August 2007 through January 2008. The review determined that during this period, the U.S. did not import apparel from 208 of nearly 500 ten-digit Harmonized Tariff Schedule lines within the five groups from Vietnam. Many of the remaining ten-digit HTS lines had rising unit values, further indicating that dumping is not taking place.

DOC then compared trends in unit values and import levels to other suppliers of these products to the United States, including Bangladesh, CAFTA-DR (Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua), India, Indonesia, Pakistan, Thailand, Cambodia, Macau, Malaysia and the Philippines. Based on this comparison, Commerce concluded that there was insufficient evidence to self-initiate an antidumping investigation.

DOC indicated that it will continue to monitor trade in these categories during the next six months for the next review that will begin in September 2008.

The import data for these product groups can be found on the Vietnam Textile and Apparel Import Monitoring Program Web site at www.otexa.ita.doc.gov/vn.htm.

Labels: Antidumping, Vietnam

At the request of the Senate Appropriations and Finance Committees, the Government Accountability Office (GAO) was asked us to review the reasons why the duties are uncollected and what the U.S. government has done to address this problem. In addition, the Senate Committees asked GAO to identify options for improving the U.S. antidumping and countervailing duty system.

During its investigation GAO examined (1) the extent and nature of uncollected antidumping and countervailing duties, (2) the key factors contributing to risks for uncollected antidumping and countervailing duties and the steps taken to improve the collection of antidumping and countervailing duties, (3) interagency communications that affect the processing of antidumping and countervailing duties, and (4) potential options for improving antidumping and countervailing collections.

The GAO recently issued a report of its finding entitled "Antidumping and Countervailing Duties: Congress and Agencies Should Take Additional Steps to Reduce Substantial Shortfalls in Duty Collection". The report notes that U.S. Customs and Border Protection (CBP) has been unable to collect over $613 million in antidumping duties since 2001. These uncollected duties are concentrated among a few products, countries of origin, and importers. For example, GAO found that four products account for about 84% of the total amount of uncollected AD/CV duties. These four products, all from China, are crawfish tail meat ($354 million), garlic ($75 million), honey ($43 million), and mushrooms ($41 million).

The GAO also found U.S. importers purchasing products from China are associated with 90% of the total amount of uncollected duties and that a relatively small number of importers owe the majority of uncollected antidumping and countervailing duties. In fact, the GAO found that four companies accounted for more than one-third of the total amount of uncollected antidumping duties and 20 companies account for 63 percent of the total.

The report states that four key factors contribute to uncollected antidumping and countervailing duties, a few of which the U.S. government has partially addressed:

1. Because the U.S. antidumping and countervailing duty system involves the retrospective assessment of duties, the final amount of antidumping and countervailing duties an importer owes can significantly exceed the initial amount paid when the goods entered the country.

2. Companies that did not previously export products subject to antidumping and countervailing duties, i.e., "new shippers," pose two types of risks for collections. For example, new shippers can be assigned an antidumping and countervailing duty rate based on as few as one shipment, which can significantly underestimate the final duty rate. Also, importers purchasing from new shippers were able to provide a bond in lieu of a cash payment to cover the initial AD/CV duties assessed. Congress addressed this risk by temporarily requiring all importers to pay initial antidumping and countervailing duties in cash.

3. All importers must provide a general bond to secure the payment of all types of duties, but CBP's standard practice for setting the amount of this bond inadequately protects antidumping and countervailing duty revenue. CBP addressed this by revising its bonding formula for products subject to antidumping and countervailing duties, but the revision has been tested on only one product and faces domestic and international legal challenges.

4. CBP collects minimal information regarding importers and does not conduct background or financial checks, which creates challenges to locating importers and collecting antidumping and countervailing duties.

The report indicates that there are two sets of options for improving the collection of antidumping and countervailing duties, each of which involves potential advantages and disadvantages:

The first option involves revising U.S. law to eliminate the retrospective component of the U.S. antidumping and countervailing duty system by assessing final duties when the product arrives in the U.S. (i.e., a prospective system as in the European Union and Canada).

The second option involves making adjustments within the existing system. For example, Congress could revise the standards for new shipper reviews and CBP could examine the option of revising bonding requirements to protect additional antidumping and countervailing duty revenue.

A copy of the complete report can be found here: www.gao.gov/new.items/d08391.pdf.

Labels: Antidumping, Congress, Countervailing Duties

The U.S. Supreme Court yesterday granted petitions for certiorari to consider two related cases involving the interpretation of U.S. antidumping law during the Court's term beginning in October 2008. It is very rare for the U.S. Supreme Court to consider trade-related cases and it is even more rare for the Supreme Court to consider an appeal in an antidumping case. Both cases involve issues arising from the antidumping investigations on low-enriched uranium from France.

The question presented in U.S. v. Eurodif S.A., et al. (Docket 07-1059) is:

Whether the court of appeals [for the Federal Circuit] erred in rejecting Commerce’s conclusion that foreign merchandise is “sold in the United States” within the meaning of 19 U.S.C. 1673 when a purchaser in the United States obtains foreign merchandise by providing monetary payments and raw materials to a foreign entity that performs a major manufacturing process in which substantial value is added to the raw materials, thereby creating a new and different article of merchandise that is delivered to the U.S. purchaser.

The question presented in USEC, Inc., et al. v. Eurodif S.A., et al. (Docket 07-1078) is:

Whether the Federal Circuit erred in failing to accord Chevron deference to that construction, when a contrary one will prevent the Commerce Department from applying the antidumping law to imports causing or threatening material injury to a domestic industry.

The Washington Post article containing background information on these cases can be found here.

Labels: Antidumping

Today the U.S. Department of Commerce issued a preliminary determination in the countervailing duty investigation on standard pipe from China finding that the Chinese government has been providing subsidies on standard pipe exported to the U.S. (this cases covers standard pipe with an outside diameter of 0.372 inches to 16 inches).

The Commerce Department found that Chinese pipe was subsidized by an average rate of 16.59 percent. Individual rates ranged from a high of 264.98 percent down to zero for one company. Most Chinese producers will be subject to a CVD duty of 16.59 percent. The Department of Commerce also applied critical circumstances, determining that this countervailing duty could be applied retroactively by 90 days.

This is only the second time the U.S. has imposed countervailing duties on Chinese exports and is the first U.S. countervailing duty case covering Chinese steel products. In the recent final determination in the countervailing duty investigation on coated free sheet paper from China, the Commerce Department decided for the first time that imports from China were countervailable.

The countervailing duty investigation was launched as a result of a petition filed by the Ad Hoc Coalition for Fair Pipe Imports From China and the United Steelworkers. The Ad Hoc Coalition includes Allied Tube & Conduit, IPSCO Tubulars, Inc., Northwest Pipe Company, Sharon Tube Company, Western Tube & Conduit Corporation, and Wheatland Tube Company. A preliminary determination in the companion antidumping investigation is due on January 3, 2008.

The Department of Commerce will make final determinations in both the countervailing duty and antidumping duty investigations in mid-March 2008.

Labels: Antidumping, China

The Automotive Trade Policy Council (ATPC), whose members include Chrysler, Ford and General Motors, recently endorsed H.R. 1127, the "American Manufacturing Competitiveness Act".

H.R. 1127, which was introduced in Congress by Representative Joe Knollenberg (R-MI), would allow U.S. manufacturers to participate in antidumping and countervailing duty cases.

Under current U.S. law, industrial users do not have standing in antidumping and countervailing duty cases even though a decision to place antidumping or countervailing duties on raw materials and other production inputs can impact their production costs. H.R. 1127 would give industrial users legal standing in trade remedy cases involving the products that they import. H.R. 1127 also requires the U.S. International Trade Commission to weigh the harm to industrial users in making material injury determinations in antidumping and countervailing duty determinations.

The Automotive Trade Policy Council joins the Consuming Industries Trade Action Coalition (CITAC) in supporting H.R. 1127. CITAC voice its support for H.R. 1127 in testimony before the House Ways and Means Trade Subcommittee on August 2, 2007.

Labels: Antidumping, Countervailing Duties, ITC

Electrolytic Manganese Dioxide

On August 22, 2007, Tronox LLC filed antidumping petitions with the U.S. International Trade Commission (ITC) and Department of Commerce on (DOC) Electrolytic Manganese Dioxide from Australia and China. Electrolytic Manganese Dioxide is commonly used in the manufacture of dry-cell alkaline batteries.

These antidumping petitions are a partial repeat of previous antidumping cases filed four years ago. Tronox LLC, which was formerly known as Kerr-McGee Chemical LLC, filed antidumping petitions on Electrolytic Manganese Dioxide from Australia, China, Greece, Ireland, Japan and South Africa in mid-2003. In the preliminary injury investigation, the ITC found no material injury existed by reason of imports of Electrolytic Manganese Dioxide from China. In March 2004, Kerr-McGee notified the ITC and DOC that it was withdrawing its antidumping petition on the remaining countries. As a result, the antidumping duty investigations were terminated.

Off-the-Road Tires From China

Separately, on August 20, 2007, the ITC determined that there is a reasonable indication that an industry in the U.S. is materially injured or threatened with material injury by reason of imports of certain off-the-road tires from China that are allegedly subsidized and sold in the United States at less than fair value. All six Commissioners voted in the affirmative.

As a result of the ITC's affirmative injury determinations, the U.S. Department of Commerce will continue to conduct its antidumping and countervailing investigations of imports of certain off-the-road tires from China.

The antidumping and countervailing petitions in this case were filed Titan International Inc. and the United Steelworkers union.

Labels: Antidumping

Earlier this week Senators Max Baucus (D-MT) and Orrin Hatch (R-UT) introduced the Trade Enforcement Act of 2007, legislation intended to "significantly bolster the U.S. government’s trade enforcement abilities." While the full text of the legislation has not been released, the press release issued by the Senate Finance Committee states that Baucus-Hatch proposal would make the following changes to U.S. trade laws:

• Amends section 701(a)(1) of the Tariff Act of 1930 to clarify that the Commerce Department has the authority to apply countervailing duties to nonmarket economies like China.
• Limits President's authority in China safeguard investigations by providing that the President may decline to provide relief only in extraordinary cases and only if the President determines that the relief would seriously harm U.S. national security or would have an adverse impact on the U.S. economy.
• Overrides the Federal Circuit’s Bratsk Aluminum decision by providing that the ITC must make its material injury determination in antidumping and countervailing duty cases without regard to whether other imports will likely replace imports from the country under investigation.
  
• Requires the United States Trade Representative (USTR) to provide an annual report to
  Congress identifying the most significant market access barriers to U.S. companies abroad
  and to take enforcement action to resolve them.
  
• Creates a Senate-confirmed Chief Enforcement Officer to investigate and prosecute trade enforcement cases. It also establishes an interagency Trade Enforcement Working Group to advise USTR and authorizes $5 million for USTR’s enforcement responsibilities.
• Sets up a WTO Dispute Resolution Settlement Commission of retired judges and international trade law experts to review WTO dispute settlement reports to determine whether they added to the United States’ obligations under the WTO or deviated from the standard of review.

Labels: Antidumping, China, Congress, Trade Policy

The price of going to the dry cleaners may be going up soon since M&B Metal Products Company, Inc., of Leeds, Alabama, today filed an antidumping petition on steel wire garment hangers from China.

Labels: Antidumping, China

The Commerce Department's International Trade Administration (ITA) published a notice in today's Federal Register announcing that is seeking a second round of public comments on an aspect of its non-market economy (NME) methodology in antidumping proceedings.

Specifically, ITA is requesting comment on certain aspects of the methodology by which it selects an economically comparable market economy country to serve as a surrogate for the NME country (i.e., China) under investigation or review. Comments are due in 30 days.

Labels: Antidumping

The U.S. International Trade Commission (ITC) today made affirmative preliminary injury determinations in the antidumping and countervailing duty cases on circular welded carbon-quality steel pipe from China.

Vice Chairman Shara L. Aranoff and Commissioners Charlotte R. Lane and Irving A. Williamson voted in the affirmative. Chairman Daniel R. Pearson and Commissioner Deanna Tanner Okun made affirmative threat determinations. Commissioner Dean A. Pinkert did not participate in these investigations.

As a result of the ITC's affirmative determinations, the U.S. Department of Commerce will continue to conduct its antidumping and countervailing duty investigations, with its preliminary countervailing duty determination due on or about August 31, 2007, and its preliminary antidumping determination due on or about November 14, 2007.

Labels: Antidumping, China, Countervailing Duties

Another pair of countervailing and antidumping duty petitions have been filed against products from China. This time the target is laminated woven sacks, which are used in the packaging industry.

The petitions, which were filed with the Department of Commerce and the U.S. International Trade Commission (ITC), were filed on behalf of the Laminated Woven Sacks Committee, which consists of Bancroft Bag, Inc., Coating Excellence International, LLC, Hood Packaging Corporation, Mid-America Packaging, LLC and Polytex Fibers Corporation.

In the meantime, the Commerce Department yesterday announced its decision to initiate antidumping and countervailing duty investigations on imports of circular welded carbon quality steel pipe from China that were recently filed by several U.S. pipe companies. The ITC, which held its preliminary conference in this case yesterday, is scheduled to make its preliminary injury determination by July 23, 2007.

If the ITC determines that there is a reasonable indication that imports from China are materially injuring, or threatening material injury to, the domestic industry, the investigations will continue, and Commerce will be scheduled to make its preliminary countervailing duty determination in August 2007, and its preliminary antidumping duty determination in November 2007 (although these dates can be extended).

Labels: Antidumping, China, Countervailing Duties

Yesterday, Allied Tube & Conduit, Atlas Tube, California Steel and Tube, EXLTUBE, Hannibal Industries, Leavitt Tube, Maruichi American Corporation, Searing Industries, Southland Tube, Vest, Inc., Welded Tube and Western Tube filed antidumping duty petitions with the U.S. International Trade Commission (ITC) and U.S. Department of Commerce against light-walled rectangular pipe and tube (LWR) from Turkey, China, Korea and Mexico. The petitioners also filed a countervailing duty petition on imports of LWR from China.

In September 2003, the U.S. pipe industry filed antidumping petitions on LWR from Mexico and Turkey. The antidumping investigation was subsequently terminated in September 2004 because the ITC, in a 6-0 vote, determined that a U.S. industry was not materially injured or threatened with material injury.

Labels: Antidumping

The recent preliminary decision by the Commerce Department to permit the filing of countervailing duty petitions on products from China has resulted in the filing of the second anti-subsidy case on Chinese products this month.

Yesterday, Des Moines, Iowa-based Titan Tire Corporation, a subsidiary of Titan International, Inc., and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union jointly filed countervailing duty and antidumping duty petitions on Off-the-Road Tires from China.

Labels: Antidumping, Countervailing Duties

By Matthew Apfel*

On June 12, 2007, the U.S. Senate Finance Committee held a hearing on “Trade Enforcement for a 21st Century Economy.” Specifically, the hearing focused on two issues: First, to what extent the Bush Administration is adequately enforcing U.S. trade agreements and second, the adequacy of enforcement of U.S. antidumping, safeguard and other trade remedy laws.

Panelists at the hearing included: Dan Glickman, current Chairman and CEO of the Motion Picture Association of America (former member of Congress and Secretary of Agriculture); Jennifer Hillman, Distinguished Fellow at Georgetown Law School's Institute of International Economic Law (former ITC Commissioner and USTR General Counsel); Robert Lighthizer, International Trade Partner, Skadden, Arps, Meagher & Flom (former Deputy USTR and chief of staff of the Senate Finance Committee); and Erik Autor, Vice President and International Trade Counsel of the National Retail Federation (formerly international trade counsel to the Senate Finance Committee).

The opening remarks of Chairman Senator Max Baucus (D-MT) made clear that, in his opinion, the Administration “can and must do more to enforce US trade agreements.” Baucus alleged that the Administration “spends far more time negotiating new deals than enforcing those already in place”. In support of this assertion he alleged that the Administration has only brought a third as many WTO cases in its first six years as the previous administration did in a similar six year time span.

Senator Baucus also called on the Administration to do more to enforce existing U.S. antidumping, safeguard and other domestic trade remedy laws. For example, Baucus pointed to President's denial of relief in section 421 China safeguard cases as the Presidents alleged “failure to abide by Congressional intent.”

Senator Grassley (R-IA), the ranking member on the Finance Committee took a more restrained approach in his opening statement. The Senator noted that in his own view, “the US has strong trade remedy laws on the books and he believes the Commerce Department and the International Trade Commission take seriously their obligation to enforce those laws.” Additionally, Grassley noted that U.S. trade laws reflect an important balance in that when domestic industries are given protection from overseas competition, consumers see higher prices as a result.

China quickly arose as a symbol of the harmful effects of an unmodified U.S. trade policy. In his testimony, Robert Lighthizer called on the U.S. Government to “get serious about China.” Specifically, he suggested that U.S. trade officials must “not allow foreign competitors (such as China) to use rules of the game that are stacked against our producers and workers."

By contrast, in his testimony Erik Autor voiced the National Retail Federation’s concerns that it would be disastrous for consumers if Congress creates “a trade remedies system that, under the guise of a quasi-judicial proceeding, becomes essentially an arbitrary, results-driven, and politically-influenced means to provide a few favored industries automatic relief from import competition.” Autor argued that, “such a system merely becomes an instrument of protectionism that undermines US competitiveness, hurts millions of American consumers, and is incompatible with where our country needs to be in the 21st century.”

Appearing In the middle of the ideological debate, both Glickman and Hillman argued that although U.S. trade remedy laws are adequate, for the most part, to “level the playing field,” their effectiveness is being undermined by the lack of vigor by which the Administration is utilizing these tools. For example, Glickman stated that although the USTR has been extremely helpful in working to promote fair trade; it needs more resources in order to enforce existing free trade agreements. In lieu of, “statutory changes", Glickman noted, "the USTR needs increased resources to have the clout they need to enforce American free trade agreements [specifically intellectual property rights under US FTAs].”

Similarly, in her testimony Hillman stated that “we have seen a significant decline in the number of trade cases initiated by the United States . . ." and that a "sound trade enforcement regime for the 21st century must make adjustments for the changes that have occurred to our trading system in the last decade while at the same time ensuring that we fully utilize the tools that we already have available to us.”

This hearing demonstrated that, In an increasingly protectionist America, China has become the scapegoat for the underlying failures of Congress and the current and previous administrations to adequately address the underlying causes of a dissatisfied constituency (some examples include: wage disparity, low paying employment domestically, diminishing pension benefits and the steady increase in the number of uninsured Americans).

Arguably, a middle ground must be reached. Should protectionism morph from draft legislation to increased trade barriers then the balance Senator Grassley called for will have been lost. In addition, such increased trade barriers will lead to an increased cost for millions of Americans with little benefit to U.S. manufacturing employment.

*Matthew Apfel is a third year law student at George Washington University. He can be reached at msapfel@law.gwu.edu.

Labels: Antidumping, Trade Policy

Six domestic producers of welded standard steel pipe and a trade union last week filed antidumping and countervailing duty petitions with the U.S. Department of Commerce and the U.S. International Trade Commission on imports of welded standard pipe from China. The petitioners in this case are Allied Tube & Conduit, IPSCO Tubulars Inc., Northwest Pipe Company, Sharon Tube Company, Western Tube & Conduit Corporation and Wheatland Tube Company, as well as the United Steelworkers Union.

The petitioners alleged that U.S. imports of circular standard and structural pipe from China have increased from 10,000 tons in 2002 to 690,000 tons in 2006, a 6,800% increase.

This is the second recent countervailing duty case brought against imports from China. In October 2006, a U.S. manufacturer of coated paper requested the Department of Commerce to reconsider its longstanding policy of not applying the countervailing duty laws to China. In March, the Commerce Department announced its preliminary decision to apply the U.S. countervailing duty laws for the first time on imports from a non-market economy.

Labels: Antidumping, Countervailing Duties

The U.S. International Trade Commission (ITC) has published in Monday's Federal Register the notice of initiation of the antidumping investigation on steel nails from China and the UAE. The notice includes information on the conference date and other relevant deadlines in the preliminary injury investigation. The steel nails covered by this investigation are included in subheadings 7317.00.55, 7317.00.65 and 7317.00.75 of the Harmonized Tariff Schedule of the United States.

Labels: Antidumping

The U.S. International Trade Commission (ITC) today determined that revoking the existing antidumping duty orders on imports of oil country tubular goods (casing, tubing and drill pipe) from Argentina, Italy, Japan, Korea and Mexico would not be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. As a result of the ITC's negative determinations in the second sunset review on these products, the antidumping orders on these products will be revoked by the Commerce Department.

Labels: Antidumping

The U.S. Department of Commerce yesterday announced its affirmative preliminary determinations in the antidumping duty investigations on coated free sheet paper from China, Indonesia, and Korea. The preliminary dumping margins ranged from 23.19% to 99.65% for the Chinese respondents, 10.85% on the Indonesian respondents and zero to 30.86% for the Korean respondents.

The antidumping petition that led to the initiation of this investigation was filed by NewPage Corporation of Dayton, Ohio. NewPage also filed countervailing duty petitions on imports of coated free sheet paper from China, Indonesia and Korea. The preliminary affirmative countervailing duty determinations were published in the Federal Register on April 9, 2007.

Coated free sheet paper is used by the commercial printing industry to produce high-quality books, gift wrap and advertising materials.

The fact sheet issued by Commerce in this case can be found at the following link: ia.ita.doc.gov/download/factsheets/factsheet-cfsp-ad-prelim-053007.pdf.

Labels: Antidumping, Countervailing Duties

An Antidumping petition was filed today with the U.S. International Trade Commission and the U.S. Department of Commerce against Steel Nails from the People's Republic of China and the United Arab Emirates. The petition was filed by Mid Continent Nail Corporation, Davis Wire Corporation, Gerdau Ameristeel Corporation (Atlas Steel & Wire Division), Maze Nails (Division of W.H. Maze Company) and Treasure Coast Fasteners, Inc.

This case appears to be the first U.S. antidumping petition brought against products from the United Arab Emirates.

Labels: Antidumping

This week the U.S. Department of Commerce (DOC) issued the final results of it proceeding to implement the WTO's decision that calculating antidumping margins by not providing offsets for non-dumped comparisons (known as "zeroing") was inconsistent with by U.S. obligations under the WTO agreements.

In order to comply with the WTO's decision, DOC recalculated the dumping margins in twelve different antidumping investigations involving steel and pasta products originating in various member states of the E.U. (Although the E.U. challenged fifteen U.S. antidumping investigations, DOC revoked the antidumping duty order associated with three of those investigations.)

The new calculations led to a decrease in the dumping margins for nearly all of the European respondents. In several cases the new dumping margins on certain companies was zero and DOC will revoke the antidumping orders on those companies. DOC will also revoke the antidumping orders on two products since the new margin for the single respondent was zero.

Labels: Antidumping

The Commerce Department published in Monday's Federal Register the preliminary countervailing duty determinations on coated free sheet paper from China, South Korea and Indonesia. While the decision to impose countervailing duties on China received a great deal of press, overlooked in the reporting is the fact that three of the four Korean respondents received a de minimis CVD rate and the "all others rate" for Korea was only 1.76%. This is significant, since imports of coated free sheet paper from South Korea exceeded those from China and Indonesia combined. According to information issued by the Commerce Department, in 2006 the U.S. imported $362 million worth of coated free sheet paper from South Korea. Imports of coated free sheet paper from China and Indonesia in 2006 were valued at $224 million and $40 million, respectively. The lone Indonesian respondent received a preliminary CVD rate of 21.24%.

The preliminary determination applied a 20.35% CVD to Gold East Paper (Jiangsu) Co., Ltd and a 10.90% CVD rate to Shandong Chenming Paper Holdings Ltd. These CVD rates were comprised of a number of Chinese Government programs that were deemed to provide countervailable subsidies. The largest subsidy program found for each company was a government program that provided loans at a discount to the forestry and paper industry in China (3.15% for Shandong Chenming and 14.02% percent for Gold East). Other programs that were deemed to provide countervailable benefits included a grant program, income tax savings and credits programs and VAT and duty exemptions. Commerce found one program not be be countervailable and several other programs that were not used by the respondents.

Compared to the typical antidumping rates applied to Chinese respondents resulting from the application of the non-market economy methodology, these CVD rates are relatively low. It will be interesting to see the antidumping rates found on the Chinese respondents once those results are released later this year. In 2006, the Government Accountability Office issued a report finding that the Commerce Department's application of the nonmarket methodology to China has produced antidumping duties on Chinese products that are substantially higher than those applied to the same products from market economy countries.

It will also be interesting to see if the Chinese Government will permit the Commerce Department to conduct a verification. In CVD cases the Commerce Department not only conducts a verification at the respondent's offices in the foreign country, but also conducts a verification at the government ministries that oversee and implement the subsidy programs. If the Chinese Government does not cooperate or otherwise permit the U.S. Government to conduct a verification, U.S. law authorizes the Commerce Department to apply the "facts available" to the final determination which is often based on adverse information supplied by the petitioners.

Labels: Antidumping, Countervailing Duties

On March 30th, GEO Specialty Chemicals, Inc. filed an antidumping petition on Glycine from India, Japan and South Korea. This is only the second antidumping case filed in 2007. Glycine from China has been subject to an antidumping order since 1995.

Labels: Antidumping

The AP has reported that U.S. Customs and Border Protection (CBP) plans to conduct an audit of Byrd Amendment funds paid to U.S. shrimpers and seafood processing houses following reports of overpayments resulting from the antidumping case on frozen and canned warmwater shrimp from China and Vietnam.

The article reports that at two businesses received more than $3 million in overpayments. In one case, a shrimp boat owner received a $2.1 million check from CBP, due to a misplaced decimal point. The proper amount of the payment should have been $210,000.

In September 2005, the Government Accountability Office issued a report critical of Byrd Amendment payments made by CBP. The report entitled "Issues and Effects of Implementing the Continued Dumping and Subsidy Offset Act" discussed the numerous problems faced by CBP in implementing Byrd Amendment payments.

The Byrd Amendment was repealed by Congress in February 2006 after it was found to be in violation of the World Trade Organization's Antidumping and Subsidies Agreements. However, the bill did not provide for immediate repeal, but provided that disbursements from the U.S. government to U.S. companies will continue on good subject to antidumping and countervailing duties that are entered before October 1, 2007.

Labels: Antidumping, Customs

In a major development in U.S. antidumping law and practice, on December 27, 2006, the U.S. Department of Commerce (DOC) published a notice in the Federal Register announcing that it will no longer use the "zeroing" methodology in antidumping investigations, including the antidumping investigations that are currently underway.

DOC made this change as as a result of a decision made by a World Trade Organization (WTO) dispute settlement panel in the case entitled "United States - Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing'') (WT/DS294). In that case, the WCO panel found, among other things, that the DOC's denial of offsets when using the average-to-average comparison methodology in certain antidumping investigations challenged by the European Union was inconsistent with Article 2.4.2 of the Antidumping Agreement.

The Cato Institutes's Center for Trade Policy Studies has called zeroing "probably the most distortive of a multitude of methodological tricks the DOC undertakes in the name of fighting unfair trade." In research conducted by the Cato Institute, they found that "zeroing was the most significant cause of dumping margins" and "affected the outcomes in 17 of the 18 cases analyzed." They found that on average "eliminating the practice of zeroing caused the margins to decrease by 88.65 percent" in the 18 cases that were reviewed.

It is important to note that this decision only applies to new and ongoing antidumping investigations and will not apply (at least for the time being) to antidumping administrative reviews conducted by DOC.

Labels: Antidumping

The United States International Trade Commission (ITC) today issued affirmative preliminary injury determinations in the antidumping and countervailing duty investigations on coated free sheet paper from China, Indonesia and Korea.

Vice Chairman Shara L. Aranoff and Commissioners Stephen Koplan, Deanna Tanner Okun, and Charlotte R. Lane voted in the affirmative. Chairman Daniel R. Pearson voted in the negative. Commissioner Jennifer A. Hillman did not participate in these investigations.

As a result of the ITC's affirmative determinations, the Commerce Department will continue to conduct its investigations of imports of coated free sheet paper from China, Indonesia, and Korea, with its preliminary countervailing duty determinations due on or about January 24, 2007, and its preliminary antidumping determinations due on or about April 9, 2007.

As previously reported, this case is unique since the petitioner is requesting the U.S. to impose countervailing duties on China, a country designated as a non-market economy (NME). This is the first countervailing duty investigation involving the PRC since 1991, when the Commerce Department initiated investigations on lugnuts and ceiling fans, which were subsequently terminated.

The Commerce Department recently published a notice seeking public comments on the applicability of the countervailing duty law to imports from the People's Republic of China.

Labels: Antidumping, Countervailing Duties

NewPage Corporation of Dayton, Ohio recently petitions with the U.S. International Trade Commission (ITC) and U.S. Department of Commerce seeking the imposition of antidumping and countervailing duties on U.S. imports of coated free sheet paper from China, Indonesia, and South Korea. Coated free sheet paper is used by the commercial printing industry to produce high-quality books, gift wrap and advertising materials. The ITC's notice of initiation of this case, as published in the Federal Register on November 6, 2006, can be found here.

What makes this case unique is that the petitioner is requesting the U.S. to impose countervailing duties on China, a country designated as a non-market economy (NME). The petition states that the Government of China subsidizes the Chinese paper industry through a "host of government programs and special incentives both at the national and local levels." The petition also alleges that Chinese producers of coated free sheet paper benefit from China's exchange rate regime that substantially undervalues the between the Chinese Yuan (RMB) and the U.S. dollar.

Since 1984 it has been the policy and practice of the Commerce Department not to impose countervailing duties on NMEs, such as Vietnam and China, because government intervention in a NME is so pervasive that one cannot make meaningful comparisons between market-determined prices and those that have been distorted by government intervention. This decision was sustained by the the U.S. Court of Appeals for the Federal Circuit in Georgetown Steel Corp. v. United States, 801 F.2d 1308 (Fed. Cir. 1986).

The petitioners in this case, however, claim that "there is no statutory bar to applying countervailing duties to imports from China or any other NME country." They also state that "the Federal Circuit’s decision in Georgetown Steel . . . is no impediment to the [Commerce] Department’s conducting a CVD investigation on imports from an NME country" since Georgetown Steel involved a countervailing duty law that has since been repealed (section 303 of the Tariff Act of 1930)." The petitioners also note that the countervailing duty statute does not specifically provide that countervailing duties should not be applied to NME countries. They also noted that the Chinese economy is entirely different than the economies investigated in Georgetown Steel (Poland, East Germany, Soviet Union and Czechoslovakia) and thus "there is little reason to expect any special difficulties to arise in the identification and valuation of subsidies in an investigation involving China that would not arise in a market economy CVD investigation."

The petitioners face an uphill battle, which was recently confirmed in a report issued by the Government Accountability Office (GAO). The GAO report, entitled, "U.S.-China Trade: Challenges and Choices to Apply Countervailing Duties to China" notes that while the Commerce Department could reverse its previous decision not to impose countervailing duties on NME countries, that "absent a clear grant of authority from Congress, such a reversal could be challenged in court" and that "the results of such a challenge would be uncertain." The GAO also indicated that the Commerce Department would "face substantial practical challenges in identifying Chinese subsidies and determining appropriate CVD levels."

This case promises to be an interesting one . . . stay tuned.

Labels: Antidumping, Countervailing Duties

By a 6-0 vote, the commissioners of the U.S. International Trade Commission (ITC) voted on Friday that there is a reasonable indication that a U.S. industry is materially injured or threatened with material injury by reason of imports of lemon juice from Argentina and Mexico that are allegedly sold in the United States at less than fair value. As a result of the ITC's affirmative determinations, the U.S. Department of Commerce will continue to conduct its antidumping investigations of imports of lemon juice from Argentina and Mexico, with its preliminary determinations due on or about February 28, 2007.

This antidumping investigation was requested by Sunkist Growers, Inc. (Sunkist). Sunkist's has claimed that the "U.S. has simply been flooded with unfairly priced juice in recent years, disrupting the market and making it very difficult to earn a reasonable return." Sunkist's has also indicated that while antidumping duties imposed on imports would increase the the bulk price for lemon juice in the U.S., "the limited volume of lemon juice used in making beverages" is unlikely to "higher prices at the checkout counter."

Labels: Antidumping

Sunkist Growers, Inc. recently filed an antidumping petition on Lemon Juice from Argentina and Mexico. This case is only the third antidumping case filed by U.S. industry in 2006.

The Cato Institute's Center for Free Trade Policy Studies recently published a policy bulletin entitled "All Quiet on the Antidumping Front? Take a Closer Look" analyzing the reasons for the decrease numbers of antidumping cases in the U.S. and around the world. The bulletin notes the following reasons for the decline in the number of antidumping cases filed in the U.S.:

1. The U.S. economy has been growing steadily since the recession of 2001. In a healthy economic environment, it is more difficult to make the case that a domestic industry is materially injured—one of the technical requirements of winning antidumping protection.
2. The U.S. steel industry, which has accounted for the preponderance of antidumping activity in the past, is arguably healthier than it has ever been.
3. The appeal of the U.S. market to foreign steel producers has decreased as demand in developing countries has created large alternative markets for steel.
4. As globalization has progressed, foreign direct investment has flourished and supply chains have gone international.
   

Labels: Antidumping

The U.S. International Trade Commission (ITC) today announced its determinations in two sunset reviews:

Bearings

The ITC determined that revoking the existing orders on tapered roller bearings from China and ball bearings from France, Germany, Italy, Japan, and the United Kingdom would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time, but that revoking the existing orders on spherical plain bearings from France and ball bearings from Singapore would not. As a result, the existing antidumping orders on imports of tapered roller bearings from China and ball bearings from France, Germany, Italy, Japan and the United Kingdom will remain in place. The existing antidumping orders on imports of spherical plain bearings from France and ball bearings from Singapore will be revoked.

Welded Stainless Steel Pipe

The ITC also found that revoking the existing antidumping duty orders on certain welded stainless steel pipe from Korea and Taiwan would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. As a result, the existing antidumping orders on imports of certain welded stainless steel pipe from Korea and Taiwan will remain in place.

In other antidumping news, a Standard & Poor's reports that "the rapid expansion of China's steel capacity and output along with comparatively higher selling prices overseas are encouraging China's steelmakers to increase exports, especially to the U.S." Of course, "any attempt by China to swamp the US market with surplus steel would be met with demands for protectionist measures and the filing of antidumping suits."

Labels: Antidumping

On July 25, 2006, Mexico's Unit of International Trade Practices (UPCI) announced in the Diario Oficial that it had reached an negative determination in the anticircumvention investigation on iron and steel valves from China. Mexico initiated the investigation in July 2005 after Mexico's Valve Manufacturing Association alleged that the antidumping order on valves from China were being circumvented by companies in the U.S. that were unassembled valves from China, assembling them in the U.S. and shipping the finished valves to Mexico with NAFTA certificates of origin. The UPCI failed to find sufficient evidence of the allegations. Iron and steel valves from China are currently subject to antidumping duties of 126.96%.

Labels: Antidumping

The U.S. International Trade Commission today announced the following determinations in the sunset reviews on pipe and tube and stainless steel wire rod from various countries:

• Affirmative determination on the countervailing duty order on circular welded pipe and tube from Turkey;
  
• Affirmative determination on the antidumping duty orders on circular welded pipe and tube from Brazil, India, Korea, Mexico, Taiwan, Thailand and Turkey.
• Affirmative determination on the antidumping duty order on light-walled rectangular pipe and tube from Taiwan.
• Negative determination on the antidumping duty order on light-walled rectangular pipe and tube from Argentina.
• Affirmative determination on the antidumping duty order on stainless steel wire rod from India.
• Negative determination on antidumping duty orders on stainless steel wire rod from Brazil and France.
  

Labels: Antidumping, Countervailing Duties

On June 23, 2006, three U.S. producers of certain polyester staple fiber filed an antidumping duty petition allegeing that imports of certain polyester staple fiber from the People's Republic of China are injuring the domestic industry. The petition, filed by Dak Americas LLC, Nan Ya Plastics Corporation America and Wellman, Inc., covers polyester staple fibers with a diameter of three denier and greater, which is generally used as stuffing in sleeping bags, mattresses, bedding and furniture. The petition alleges antidumping margins of 88% to 109% and claims there are more than 100 producers of polyester staple fiber in China. This is only the second antidumping petition filed in the U.S. in 2006.

The U.S. currently imposes antidumping duties on polyester staple fiber from Korea and Taiwan. One of the petitioners, Nan Ya Plastics Corporation America, is a subsidiary of a Taiwanese producer of these products.

Labels: Antidumping

Vietnam's Thanh Nien Daily has reported that the U.S. shrimp industry has agreed to exclude 19 Vietnamese shrimp exporters from the first administrative review of the antidumping order on frozen warmwater shrimp from Vietnan if the exporters agree to pay 2% of their U.S. export revenues to the Southern Shrimp Alliance.

Labels: Antidumping

China's Xinhua news agency reports that China's Ministry of Commerce has imposed antidumping duties ranging from 5% to 61% on imports of Spandex from Japan, Singapore, the U.S., South Korea and Taiwan.

Labels: Antidumping

The World Trade Organization's (WTO) Secretariat has issued a report confirming a worldwide decrese in antidumping investigations and antidumping orders. During July 1, 2005 through December 31, 2005, 16 WTO members initiated 82 new antidumping investigations, compared with 106 initiations in the corresponding period of 2004. Fifteen WTO members applied 76 new final antidumping measures during the July-December 2005 period, compared with 93 new measures during July-December 2004.

Labels: Antidumping

On Monday, May 1st, the European Union will expand the coverage of retailiatory sanctions imposed on U.S. products as a result of the failure by the U.S. to bring the Continued Dumping and Subsidy Offset Act (commonly known as the "Byrd Amendment") in compliance with its obligations under WTO agreements. While the Byrd Amendment was repealed by Congress, duties imposed on goods imported into U.S. through September 2007 will still be distributed to the domestic industry. The EU claims that that the Byrd Amendment should be repealed in full and no further antidumping or countervailing duties should be paid directly to U.S. industry. The total value of the new sanctions will be US$9.1 million, bringing the total amount imposed by the EU against U.S. products to $36.9 million.

According to Regulation (EC) No 632/2006, the following is a list of the HTS subheadings and description of the eight additional products will be subject to the additional 15% duty:

1. 6301 40 10 -- Blankets and travelling rugs of synthetic fibres, knitted or crocheted (excl. electric, table covers, bedspreads and articles of bedding and similar furnishing of heading 9404)
2. 6301 30 10 -- Blankets and travelling rugs of cotton, knitted or crocheted (excl. electric, table covers, bedspreads and articles of bedding and similar furnishing of heading 9404)
3. 6301 30 90 -- Blankets and travelling rugs of cotton (excl. knitted or crocheted, electric, table covers, bedspreads and articles of bedding and similar furnishing of heading 9404)
4. 6301 40 90 -- Blankets and travelling rugs of synthetic fibres (excl. knitted or crocheted, electric, table covers, bedspreads and articles of bedding and similar furnishing of heading 9404)
5. 4818 50 00 -- Articles of apparel and clothing accessories, of paper pulp, paper, cellulose wadding or webs of cellulose fibres (excl. footware and parts thereof, incl. insoles, heel pieces and similar removable products, gaiters and similar products, headgear and part
6. 9009 11 00 -- Electrostatic photocopying apparatus, operating by reproducing the original image directly onto the copy [direct process]
7. 9009 12 00 -- Electrostatic photocopying apparatus, operating by reproducing the original image via an intermediate onto the copy [indirect process]
8. 8467 21 99 -- Drills of all kinds for working in the hand, with self-contained electric motor operating with an external source of power (excl. electropneumatic drills)

Labels: Antidumping