International Trade Law News /title <!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-strict.dtd"> <html xmlns="http://www.w3.org/1999/xhtml" xml:lang="en" lang="en"> <meta name="verify-v1" content="6kFGcaEvnPNJ6heBYemQKQasNtyHRZrl1qGh38P0b6M=" /> <head> <title>International Trade Law News

December 03, 2009 

U.S. Customs Posts Materials From Next Week's Customs Symposium

U.S. Customs and Border Protection (CBP) has posted on its website some of the materials that we will be presented during n the breakout sessions at next week's 2009 Trade Symposium.

Among the materials now available for review include information on C-TPAT, antidumping and countervailing duty functionality in ACE, post entry summary corrections in ACE and customs rulings.

For those that cannot attend the sold-out program in person, CBP will be presenting a live webcast of many of the sessions from the Trade Symposium. To view the presentations and for more details on the webcast click here.

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July 28, 2009 

Several Important Trade-Related Issues Discussed at First U.S.-China Strategic and Economic Dialogue

Today marked the conclusion of the first U.S.-China Strategic and Economic Dialogue held in Washington, DC. At the conclusion of the meetings, the U.S. and China issued a Joint Fact Sheet summarizing the issues and action items agreed to during the two days of discussions.

The fact sheet contained several items of note on U.S. trade-regulatory issues.

Regarding foreign direct investment in the U.S., the fact sheet indicates that the U.S. "confirms that the Committee on Foreign Investment in the United States (CFIUS) process ensures the consistent and fair treatment of all foreign investment without prejudice to the place of origin."

On antidumping issues, the United States recognized "the continued progress China has made in its market reforms and will earnestly consider China's concerns, and will consult through the JCCT [US-China Joint Commission on Commerce and Trade] in a cooperative manner to work toward China's Market Economy Status in an expeditious manner." This has been an important issue for China, since for antidumping purposes China is treated as a non-market economy, a designation that typically leads to higher antidumping duty margins.

With respect to export controls, the U.S. and China agreed "to accelerate the implementation of "Guidelines for China-U.S. High Technology and Strategic Trade Development" and expeditiously formulate the Action Plan on Expansion of China-U.S. High Technology and Strategic Trade Cooperation in Priority Sectors.

The Guidelines referred to in the fact sheet were signed in December 2007 by former Under Secretary of Commerce Mario Mancuso and MOFCOM Vice Minister Wei Jiangguo. Under the Guidelines, the Commerce Department and MOFCOM agreed to jointly identify and carry out steps to enhance secure high technology and strategic trade. For example, the Commerce Department and MOFCOM will continue to review U.S. dual-use policy to identity and implement appropriate processes to streamline the licensing process for legitimate civilian trade. The Guidelines also recognized the critical role of end-use visits conducted by BIS in ensuring the protection of U.S. national security interests in the enhancement of high technology trade.

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July 26, 2009 

New Report Confirms Increased Use of Trade Remedy Cases and Spike in Safeguard Cases

Professor Chad P. Bown, publisher of the Global Antidumping Database, recently issued a report confirming that the number of trade remedy cases is increasing. The report, entitled "Protectionism Continues its Climb", states that the second quarter of 2009 saw a 12.1% increase in initiated antidumping, safeguard and countervailing duty cases.

Among other things, the report notes that India continued the trend of being the most active country seeking to initiate new import restrictions, having initiated 34% of all of the new trade remedy cases during the second quarter of 2009. The U.S. was the second most active country in the second quarter of 2009, initiating 17% of the total number of new cases.

Not surprisingly, the report confirms that China is the primary target of the new trade remedy cases. China was named in 82.6% of newly initiated trade remedy investigations by WTO members and targeted in 17 out of the 17 new cases in which trade remedies were imposed.

The report also confirms a "spike" in the number of new safeguards cases and predicts that this trend "will almost certainly continue to increase throughout the remainder of 2009 and into 2010."

The Global Antidumping Database is a project of Chad P. Bown, an Associate Professor in the Department of Economics and Business at Brandeis University and a Fellow in the Global Economy and Development Program at the Brookings Institution.

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June 30, 2009 

Antidumping Petition Filed Today on Woven Electric Blankets From China

An antidumping petition was filed today with the U.S. International Trade Commission and Department of Commerce against woven electric blankets from China.

The petitioner in this case is Jarden Consumer Solutions, a subsidiary of Jarden Corporation (NYSE: JAH) and the owner of Sunbeam Bedding and several other well known consumer brands, including Mr. Coffee.

The petition identifies the product allegedly sold at less than fair value as finished or unfinished woven electric blankets of all sizes including twin, full, queen and king sizes. The subject blankets consist of a shell of woven fabric, made of synthetic or natural fiber, or a blend of synthetic and natural fiber which contains heat-producing wire whose temperature is controlled by one or more thermostats or controllers. Imported woven electric blankets are classified under Harmonized Tariff Schedule of the United States (“HTSUS”) subheading 6301.10.0000 and are currently subject to an 11.4% duty rate.

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June 08, 2009 

U.S. Industry Files Three AD/CVD Cases on Chinese Steel Products in Past Two Weeks

The number of antidumping and countervailing duty petitions being filed in the U.S. on steel products from China is on the rise.

On June 5, 2009, WP Industries, Inc., ITC Manufacturing, Inc., J&L Wire Cloth, Inc. and Nashville Wire Products Mfg. Co., Inc. filed antidumping and countervailing duty petitions with the U.S. Department of Commerce and U.S. International Trade Commission against imports of wire decking from China.

The proposed scope of the investigations on wire decking includes welded-wire rack decking for industrial and other commercial storage racks or pallet rack systems produced from carbon or alloy steel wire.

Wire decking is classified under Harmonized Tariff Schedule of the United States (HTSUS) subheadings 9403.90.8040, 9403.20.0020, 7217. 10, 7217.20, 7326.20, 7326.90.

These antidumping and countervailing duty petitions follow similar petitions filed on May 27 and 28 against prestressed concrete steel wire strand and steel grating, respectively, from China.

More antidumping and countervailing duty cases against other types of imported steel products from countries in addition to China are expected to be filed in the coming months.

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May 11, 2009 

Global Antidumping Database Confirms Increased Number of Trade Remedy Cases

According to data compiled by the Global Antidumping Database, the first quarter of 2009 saw an 18.8% year increase in the number of antidumping, countervailing duty, global safeguard, and China-specific safeguards brought by WTO members compared to the same period in 2008. Not surprisingly, China's exporters were the dominant target of these investigations, accounting for more than 2/3 of the new cases.

The Global Antidumping Database is a project of Chad P. Bown, an Associate Professor in the Department of Economics and International Business School at Brandeis University and a Fellow in the Global Economy and Development Program at the Brookings Institution.

An analysis of the data prepared by Professor Bown shows that:

Compared to the same time period in 2008, the first quarter of 2009 also saw a 15.4% increase in the imposition of new import-restricting tariffs and quotas upon completion of earlier investigations initiated under these trade remedy laws, a trend that will almost certainly continue to increase throughout the remainder of 2009 and into 2010. While India imposed the most new import barriers under these laws during this time period, other G-20 members that did so include Argentina, Australia, Brazil, Canada, the EU and its member states, South Korea, Turkey and the United States. China's exporters are the dominant target for these newly imposed import restrictions facing new barriers in over 70% of the cases.
The complete and detailed data on antidumping investigations will be made available in early summer 2009 as version 5.0 of the Global Antidumping Database.

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April 08, 2009 

Antidumping and Countervailing Duty Petitions Filed on OCTG From China

In a widely expected move, today the U.S. steel industry filed antidumping and countervailing duty petitions against Oil Country Tubular Goods from China. No other countries were named in the petitions.

The petitioners are Maverick Tube Corporation, United States Steel Corporation, TMK IPSCO, V&M Star L.P., Wheatland Tube Corp., Evraz Rocky Mountain Steel, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC.

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April 07, 2009 

WSJ: The Vietnam Tariff? Plastic Bags Present a Test For Free Trade

Today's Wall Street Journal Asia contains an opinion piece on the recently filed U.S. antidumping and countervailing duty petitions file on polyethylene retail carry bags from Vietnam. The article discusses whether the U.S. Commerce Department will apply the U.S. countervailing law to Vietnam, which is treated as a non-market economy for antidumping purposes, and discusses the cost of such a decision to U.S. consumers.

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March 25, 2009 

Commerce Department Makes Antidumping Determination on Line Pipe From China

The U.S. Department of Commerce (DOC) yesterday announced its affirmative final determination in the antidumping duty investigation on imports of circular welded carbon quality steel line pipe from the People’s Republic of China. Welded line pipe is used for the transmission of gas or oil, generally in pipeline systems.

Mandatory respondent, Huludao Steel Pipe Industrial Co., Ltd., received a final dumping rate of 73.87 percent. Three Chinese exporters received a separate rate of 73.87 percent. All other Chinese producers/exporters of welded line pipe received the China-wide rate of 101.10 percent, including Chinese mandatory respondent, Shanghai Metals & Minerals Import & Export Corp., as this company withdrew from the investigation.

As a result of this final determination, Commerce will instruct U.S. Customs and Border Protection to collect a cash deposit or bond based on the final rates.

The U.S. International Trade Commission (ITC) is scheduled to issue its final injury determination on or about May 7. If the ITC makes an affirmative final injury determination that imports of welded line pipe from China materially injure, or threaten material injury to, the domestic industry, Commerce will issue an antidumping order.

The petitioners in this antidumping investigation are Maverick Tube Corporation, United States Steel Corporation, Tex-Tube Company, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC.

Expect to see a number of antidumping petitions to be filed in the U.S. in the coming months on additional steel products from China and other countries.

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March 02, 2009 

Australia and New Zealand Will Treat Vietnam as Market Economy for Antidumping Purposes

Australia and New Zealand have decided to treat Vietnam as a market economy for antidumping purposes. The decision was made in connection with the recent signing of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA).

Australia and New Zealand are the two first countries to recognize Vietnam as a market economy since Vietnam joined the World Trade Organization in 2007.

The U.S. is unlikely to change its treatment of Vietnam as a non-market economy for several years since the U.S.-Vietnam WTO Agreement specifies that the U.S. can continue to treat Vietnam as a non-market economy for up to 12 years after accession, or until it is able to meet the economic criteria for a "market economy" designation.

U.S. antidumping law requires the Department of Commerce to calculate the "normal value" of goods produced from non-market economies using surrogate values from market economy countries in order to value the "factors of production" used to produce the subject merchandise. Use of the non-market economy methodology often leads to very high antidumping duty rates.

In addition to Vietnam, the U.S. treats China, Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan non-market economy for antidumping purposes.

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February 05, 2009 

Nucleonics Week Reports on U.S. Supreme Court's Antidumping Decision

A recent edition of Nucleonics Week [pdf], a leading source of news for the commercial nuclear power business, contains a detailed report on the Supreme Court's recent antidumping decision in United States v. Eurodif S.A., et al. , [pdf] cases involving the imports of low enriched uranium (LEU). In that case, the Supreme Court unanimously held on January 26, 2009 that LEU produced through "separative work unit" (SWU) enrichment contracts are goods and subject to U.S. antidumping duty laws.

In addition to analyzing and discussing the ramifications of the Court's decision, the Nucleonics Week article describes the varied reaction to the decision in the U.S. and abroad.

Importantly, the article notes that this case is far from over. The article quotes counsel for Areva, the current owner of Eurodif, as saying that:

"[The Eurodif] case that the Supreme Court took was only one of a group of related cases. The others were put on hold until the underlying goods-versus-services issue was resolved. Areva will continue to challenge a finding by the US International Trade Commission that the US domestic industry was injured by the imports from Areva . . . and Areva also will pursue cases in which it is questioning the specifics of Commerce’s findings in its review of the case. . . "
The article also indicates that the European Commission will closely examine this decision and that the European Court of Justice "ruled in 2006 that separative work is a service, not a good, mirroring the jurisprudence of US courts at the time" and that is likely "that the difference between US and EU jurisprudence on SWU imports would eventually cause “someone” in Europe to challenge the ECJ decision."

The Eurodif article starts in the center on page one of the publication and continues on to pages 11-13.

Editors Note: Nucleonics Week is published 51 times per year by Platts, a division of McGraw-Hill Companies. The linked article is copyrighted and is reprinted by permission.

Full disclosure: Doug Jacobson, the editor of International Trade Law News is quoted in the article.

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January 27, 2009 

First U.S. Trade Remedy Case Brought in 2009

In what is likely to be the first of many trade remedy cases brought by U.S. industry against imported products in 2009, countervailing duty petitions were filed yesterday with the U.S. Department of Commerce and the U.S. International Trade Commission by Korff Holdings, LLC, dba Quaker City Castings, against Nickel-resist piston inserts for commercial grade diesel pistons from Argentina and South Korea.

This is the first antidumping or countervailing petition filed since October 29, 2008. Given the downturn in the U.S. economy it is likely that several other U.S. industries facing competition from imports will turn to the trade remedy laws to seek relief. In the past, for example, the U.S. steel industry has brought antidumping and countervailing duty against various imported steel products, including hot-rolled and cold-rolled steel, during economic downturns.

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January 26, 2009 

U.S. Supreme Court Sides With Commerce Department in First Antidumping Decision Rendered by Court

The U.S. Supreme Court today released its opinion in the first ever antidumping case heard by the U.S. Supreme Court.

In United States v. Eurodif S.A., et al. (Docket No. 07-1059) and USEC, Inc., v. Eurodif S.A., Docket No. (Docket No. 07-1078), cases involving the imports of low enriched uranium (LEU) from France and other countries, the Supreme Court ruled 9-0 that LEU produced through "separative work unit" (SWU) enrichment contracts are goods and subject to U.S. antidumping duty laws.

In the unanimous opinion written by Justice Souter, the Court held:

Where a domestic buyer’s cash and an untracked, fungible commodity are exchanged with a foreign contractor for a substantially transformed version of the same commodity, the Commerce Department may reasonably treat the transaction as the sale of a good under §1673. We therefore reverse the judgment of the Federal Circuit and remand the cases for further proceedings consistent with this opinion.
While recognizing that "SWU contracts exemplify a class of transactions that the Federal Circuit recognized does 'not fall neatly’ either into the category of contracts for services or the category of contracts for the sale of goods,'" relying on the standard in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the Court held that the Commerce Department reasonably determined that the enrichment contracts were sales of goods subject to the antidumping law and the Court of International Trade and Court of Appeals for the Federal Circuit overreached by overturning the Commerce Department’s original decision.

Specfically, the Court stated:
First, we think the Department reasonably concluded that §1673 is not limited by its terms to cash only sales. Otherwise, any sale of a manufactured product could be exempted from the operation of §1673 by a contractual term stating part of the purchase price in terms ofa commodity. Second, in applying §1673, the Commerce Department is not bound by the “legal fiction [created by SWU contracts]that the very feed uranium delivered by a utility to an enricher is enriched and then returned as LEU to the utility.”
This case is one of a very small number of international trade law cases heard by the U.S. Supreme Court. While the Court previously ruled on other aspects of international trade laws, such as the classification of imported merchandise under the customs laws (e.g., United States v. Mead, 533 U.S. 218 (2001) and United States v. Haggar Apparel Co., 526 U.S. 380 (1999)) and whether the harbor maintenance tax imposed on exports violated the Constitution’s export clause (United States v. United States Shoe Corp., 523 U.S. 360 (1998)), never in the long history of the United States antidumping laws had the Supreme Court ruled on a legal issue involving the interpretation of antidumping laws.

This case was closely watched by practitioners and parties involved on both sides in antidumping cases since the decision will affect the scope of products and types of processing arrangements subject to future antidumping investigations and antidumping duties.

UPDATE: The press release issued today by USEC, the U.S. petitioner in the original antidumping case can be found here. The press release issued by the Committee to Support U.S. Trade Laws (CSUSTL), which filed an amicus brief supporting the government's position in the case, can be found here.

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November 20, 2008 

Don't Dump on Free Trade

As we reported, on November 4, 2008 the U.S. Supreme Court recently heard oral arguments in the consolidated cases of United States v. Eurodif S.A., et al. (Docket No. 07-1059) and USEC, Inc., v. Eurodif S.A., Docket No. (Docket No. 07-1078), the first antidumping cases granted certiorari by the Court.

As correctly noted by Ilya Shapiro, a senior fellow in constitutional studies at the Cato Institute, in the following article that appeared in the Legal Times on November 17, 2008, "what on the surface is a dry parsing of statutory definitions in the end implicates not just larger issues of international trade but also antitrust law, energy policy, national security, and the government's role in ordinary commercial activity." He also calls Eurodif "one of the term's most important cases."

Don't Dump on Free Trade

by Ilya Shapiro

The new Supreme Court term is so far more notable for cases denied review than those actually on the argument calendar, and it has otherwise been overshadowed by both the election and the financial crisis.

Even the most interesting-sounding cases—such as the "fleeting obscenity" case, Federal Communications Commission v. Fox Television Stations, which one could be excused for thinking has something to do with the First Amendment—somehow come down to technical questions of administrative law.

One seemingly "boring" case, however, involving anti-dumping regulations of all things, is the opposite: What on the surface is a dry parsing of statutory definitions in the end implicates not just larger issues of international trade but also antitrust law, energy policy, national security, and the government's role in ordinary commercial activity.

On Tuesday, Nov. 4, while most of the country understandably had its attention elsewhere, the Court heard argument in United States v. Eurodif. The case is an appeal from a ruling of the U.S. Court of Appeals for the Federal Circuit holding that contracts with foreign companies to enrich uranium are outside the scope of U.S. anti-dumping law (and their corresponding tariffs) because they're "service" as opposed to "sales" contracts.

The decision reversed the Commerce Department's determination to the contrary and prompted a petition for certiorari from United States Enrichment Corp., a government spinoff that dominates the domestic enrichment market and would be hurt by competition from abroad. Although the U.S. solicitor general also requested cert (in which circumstance review is not uncommon), Eurodif is the first time the Court has accepted an international trade case in six years (and only the eighth time in the last two decades).

Why, then, is this case of such importance that it warrants the Court's intervention? Not to put too fine a point on it, but in these uncertain times, Eurodif stands at the crossroads of our political debates over how to grow the economy while doing right by workers. If foreign service contracts are all of a sudden subject to regulatory premiums, not only will international trade be hit, but all companies that have lowered costs by outsourcing parts of their operations will face legal uncertainty—and consumers will pay higher prices.

Goods And Services?

"Dumping" is similar to the antitrust concept of "predatory pricing," whereby a company allegedly sells goods at less than their "fair value" to drive its competition out of the market and then obtain monopoly profits. (Both dumping and predatory pricing claims are controversial as a matter of economic theory, but that's a different article.) In the context of international trade, an exporter of goods who prices them at less than this so-called fair value "dumps" those goods on the importing country.

Under the U.S. anti-dumping law, 19 U.S.C. §1673, the Commerce Depart­ment may impose duties on "foreign merchandise [that] is being, or is likely to be, sold in the United States at less than its fair value" when such "dumping" causes or threatens to cause material injury to a domestic industry. In 2001, Commerce determined that low-enriched uranium (LEU, a critical component for nuclear power) from France was thus being dumped and imposed a duty on LEU imports.

The controversy is that American utility companies—the respondents in the case, along with the French enrichers—acquire most of their LEU not by buying it abroad, but by "separative work unit" orders. In these transactions, a utility delivers to the enricher a quantity of unenriched uranium (known as a "feed," which it has acquired elsewhere) and then pays for the conversion of feed into LEU. So what they effectively purchased from France here is enrichment services, not goods in the sense of "foreign merchandise"—or so the respondents successfully argued to the Federal Circuit.

A Dangerous Position

Numerous economic studies have shown that anti-dumping law is facially contrary to free trade. It protects domestic special interests from the rigors of global competition and results in higher prices for U.S. businesses and consumers.

In this case, any duties added to LEU would drive up the cost of one of the more reliable sources of energy—just as the nation wants more noncarbon-based energy for financial, environmental, and even geo-strategic reasons. The ultimate result of these duties may be to harm all U.S. citizens—individuals who face their own hardships in this economic downturn and shouldn't be forced to subsidize USEC through higher utility bills.

USEC argues that the Commerce Department should be allowed to impose anti-dumping duties on service transactions when those transactions result in the importation of a tangible product—even though they do not involve the sale of that product at less than fair value. The government adds that the purpose of anti-dumping law is to protect U.S. industries and their workers from "unfair" competition, even if a sale of goods hasn't occurred.

These attempts to extend anti-dumping law to service transactions have four principal dangers:

  • Judicially amending the law. A ruling in the government's favor subjects imports of services that result in tangible products to duties when the applicable statute unambiguously declines to cover services. A new Congress with a new president may choose to change the law, of course, and it might do so in response to this case, but that's a policy decision that shouldn't be imposed on the nation by the courts.

  • Retaliation. The government arbitrarily hurts our trading partners, who could in turn burden the export of U.S. services—a large and growing part of the economy.

  • Unpredictability. The government position creates uncertainty about which transaction Commerce considers when it determines whether dumping has occurred—the service order or the subsequent sale of merchandise. The government could then pick and choose among transactions on which to base complaints, perhaps focusing on outsourcing to India or China, as a way to maximize receipts from duties.

    If importers do not know whether Commerce will look at the service transaction or the downstream sale, they cannot know which price to set to avoid dumping tariffs. U.S. companies that produce goods through foreign contracts would suddenly be more vulnerable to dumping claims based on the price negotiated for the manufacturing alone.

  • Maintaining a monopoly at consumers' expense. Commerce is acting to protect a government monopoly to the detriment of the free market system and more open trade. Ever since USEC was privatized in 1998, it has been trying to use dumping laws to exclude European companies (including filing this case in 2000). Both the nuclear enrichment industry and the overall economy would be better served by open competition than by a monopolist's attempts to insulate itself from more efficient providers.

Hurting Consumers

Contrary to the claims of some protectionists, anti-dumping law does not bolster America's national security. Instead it increases procurement costs, diverting funds from other worthwhile programs and stifling innovation among domestic companies. Although the United States may have a security interest in maintaining domestic enrichment capability, any subsidies that USEC requires should come from the normal appropriation process and not through a hidden tax on all foreign LEU.

For that matter, it is unclear why such enrichment needs to be done by a government monopoly rather than by regulated private energy companies akin to defense contractors.

The government and USEC lob final volleys to the effect that without a decision in their favor, Russia—not a party to these proceedings, but home to enrichers that will be affected by this case—would ramp up LEU production, crowding out U.S. investment in enrichment capabilities (while keeping its stocks of weapons-grade uranium instead of converting them to nonmilitary uses). But it is Congress' job to rewrite statutes that might be harmful to national security, not the courts'—and here, the president already has statutory authority to regulate, for security reasons, the trade of any property in which a foreign country has an interest.

Fundamentally, we should not enforce laws that impose higher prices on American consumers. Nor should we take steps that undermine the competitiveness of American companies doing business abroad. But that is exactly what the government is doing when it demands that special duties be placed on imports that supposedly are priced "too low."

The Court seemed of two (or nine) minds during oral argument, but if it finds in the end that uranium enrichment is subject to tariff, the entire range of foreign service contracts will be exposed to anti-dumping abuse. Such a decision could raise costs throughout global supply chains, as the Obama Commerce Department uses anti-dumping laws to punish outsourcers.

That would be an unfortunate result. Eurodif may not have received much attention on Election Day, but given the threat to U.S. business and all our interest in promoting commerce during difficult economic times, it is one of the term's most important cases. Those who want true competition and benefits to consumers should hope that the government loses and, accordingly, that freer trade wins.

Editors Note: Thanks to Ilya Shapiro and the CATO Institute for permission to reprint this article.

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November 17, 2008 

Supreme Court Hears Oral Argument in Antidumping Cases

As we reported, the U.S. Supreme Court recently heard oral arguments in the first ever antidumping cases granted certiorari. The consolidated cases, United States v. Eurodif S.A., et al. (Docket No. 07-1059) and USEC, Inc., v. Eurodif S.A., Docket No. (Docket No. 07-1078), involve appeals arising from an antidumping petition filed in December 2000 on imports of low enriched uranium from various countries, including France.

While I was not able to attend the oral argument on November 4th, the transcript from the oral argument can be found here on the Supreme Court's website and a good recap of the oral argument can be found here on the SCOTUS blog.

As expected, the Justices focused their questions to counsel on whether the uranium that was enriched outside of the United States under separative work contracts results in merchandise being sold in the United States. The Justices posed a number of hypotheticals in an effort to establish the line between the sale of a good and the sale of a service. The justices also explored the extent of deference the Court should give to the Commerce Department under the test established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

The SCOTUS blog noted that "because the bench was not particularly active, it is difficult to predict the outcome of the case with any certainty. However, given the Court’s focus during the petitioners’ arguments on how the test would apply more broadly, compared with their skepticism that a contrary interpretation would elevate formality over substance, it seems like that the U.S. and USEC will prevail."

I agree that this is a very close case since there are excellent arguments on both sides. However, I think that the Supreme Court will ultimately side with the U.S. Court of International Trade and the Court of Appeals for the Federal Circuit and find that the contracts for the enrichment of uranium entered into by U.S. buyers were contracts for services, rather than for the sale of goods, and therefore not subject to the U.S. antidumping laws.

The Supreme Court should issue its opinion in this case in the spring of 2009.

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November 16, 2008 

WTO Reports 39% Increase in Antidumping Investigations

The World Trade Organisation (WTO) recently announced a 39% increase in the number of antidumping investigations initiated by WTO members during the first six months of 2008 as compared to the same period in 2007.

During January to June 2008, 16 WTO Members initiated a total of 85 new investigations, compared with 61 initiations reported by 16 Members for the same period in 2007.

Turkey reported the most initiations –13 – while the U.S. reported 12, India 11, and Argentina and the European Union 10 each.

As usual, China was most frequent subject of the new investigations, with nearly one half (37) of all of the new initiations reported for January-June 2008 directed at its exports. This was a 76%increase over the 21 new investigations opened against Chinese exports during January to June 2007.

The products most frequently subject to antidumping investigations during the first half of 2008 were: base metals (21 cases), textiles (20) and chemicals (10).

Given the current state of the world economy, the number of antidumping investigations is expected to increase even further in 2009.

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November 02, 2008 

U.S. Supreme to Hear First Ever Antidumping Cases

On Tuesday, November 4th, the U.S. Supreme Court will hear oral arguments in the first ever antidumping cases granted certiorari by the Supreme Court.

The consolidated cases, United States v. Eurodif S.A., et al. (Docket No. 07-1059) and USEC, Inc., v. Eurodif S.A., Docket No. (Docket No. 07-1078), involve appeals arising from an antidumping petition filed in December 2000 on imports of low enriched uranium from various countries, including France. The U.S. Court of International Trade and the Court of Appeals for the Federal Circuit, overturning a decision made by the Commerce Department, held that the contracts for the enrichment of uranium entered into by U.S. buyers and Eurodif S.A, an enricher in France, were contracts for services, rather than for the sale of goods. As a result, the courts held that the low enriched uranium (LEU) processed under the contracts was not subject to the antidumping law.

The central issues in this case are whether the low enriched uranium produced through "separative work unit" (SWU) enrichment contracts are goods or services and subject to the antidumping duty laws and the extent of deference the courts are to give to the Commerce Department under the test established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) in making such determinations. In other words, the Supreme Court is being asked to decide if the Commerce Department reasonably determined that the enrichment contracts were sales of goods subject to the antidumping law and if the Court of International Trade and Court of Appeals for the Federal Circuit overreached by overturning the Commerce Department’s decision.

These cases are significant in many respects. Not only do they involve issues addressing an important interpretation of U.S. antidumping law, they will have an impact on international trade, energy and national security policy, all of which were prominent issues in the current presidential election campaign. It is therefore fitting that the oral argument in these cases will be held on Election Day.

From an antidumping law perspective these cases are significant since they mark the first time the Supreme Court has heard a case involving the interpretation of United States antidumping laws. The Supreme Court rarely considers international trade law cases. While the Supreme Court has previously ruled on other aspects of international trade laws, such as the classification of imported merchandise under the customs laws (e.g., United States v. Mead, 533 U.S. 218 (2001) and United States v. Haggar Apparel Co., 526 U.S. 380 (1999)) and whether the harbor maintenance tax imposed on exports violated the Constitution’s export clause (United States v. United States Shoe Corp., 523 U.S. 360 (1998)), never in the long history of the United States antidumping laws has the Supreme Court ruled on a legal issue involving the interpretation of antidumping laws. The Supreme Court has traditionally deferred to the decisions made by judges of the United States Court of International Trade and the United States Court of Appeals for the Federal Circuit.

This case is also being closely watched by practitioners and parties involved on both sides in antidumping cases since the Supreme Court’s decision will affect the scope of products and types of processing arrangements subject to future antidumping investigations and antidumping duties.

This case is also important from an administrative law perspective, as this is the case since the Supreme Court’s 2004 term that it will review a case under the Chevron test. The Court’s opinion in these cases may provide further guidance and elaboration on the degree of deference that the courts owe to administrative agencies whose decisions they are reviewing.

The Supreme Court’s decision in these cases also has several domestic energy and national security policy implications. For example, if the Supreme Court’s chooses to rule in favor of the United States and USEC and impose antidumping duties on the low enriched uranium imports from France at issue in this case, the utility companies will end up paying more for the fuel needed to power their nuclear power costs and will likely pass along those costs to the businesses and consumers that purchase electricity produced by nuclear power plants. By contrast, if the Commerce Department’s decision is upheld by the Supreme Court the United States and USEC are concerned that Russia may choose to increase its output of LEU used to produce electricity, which would decrease the market price and threaten the viability of the domestic enrichment industry and decrease the United States’ ability to acquire nuclear materials critical to conducting military operations.

Finally, the Supreme Court’s decision in these cases will have an impact outside of the borders of the United States as well. If the Supreme Court reverses the Federal Circuit’s ruling and lets stand the Commerce Department’s decision to apply the antidumping law to manufacturing service contracts, the European Union could file a complaint with the World Trade Organization’s Dispute Settlement Body alleging that the decision is contrary to various WTO agreements. In addition, the possibility also exists that other countries could use the Commerce Department’s reasoning to bring antidumping cases against United States products.

The briefs in these case can be found at the following links:

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September 11, 2008 

ITC Makes Final Affirmative Injury Determination on Wire Garment Hangers From China

The price of wire hangers from China is going to be remain high. By a vote of 6-0, the U.S. International Trade Commission (ITC) today made a final affirmative injury determination in the antidumping case on steel wire garment hangers from China.

As a result of the ITC's affirmative determination, the Department of Commerce will issue an antidumping duty order on imports of this product from China requiring the payment of cash deposits for antidumping duties ranging from 15.44% to 186.98%.

The petitioner in this investigation was Alabama-based M&B Metal Products Company, Inc. The scope of this antidumping investigation covers a wide range of steel wire garment hangers that are used by the dry cleaning, industrial laundry, textile, and uniform rental industries. These hangers are are classifiable under HTS number 7326.20.0020.

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September 10, 2008 

Antidumping Review Leads to Increased Profits for U.S. Importer/Manufacturer

Here's an example of how antidumping duties on imported raw materials can impact a U.S. importer's bottom line:

In a press release issued today by Arch Chemicals, Inc., a Connecticut-based chemicals company, the company announced that the reduction in antidumping duties in the second antidumping administrative review on chlorinated isocyanurates from China will result in an $11 million pre-tax benefit to the company.

In the final results of the second administrative review published in today's Federal Register, the Commerce Department reduced the antidumping duty rate on chlorinated isocyanurates from one of Arch's suppliers from 76% to less than 1%.

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July 20, 2008 

Trade Enforcement Act of 2008 Introduced in Congress

Late last week House Ways and Means Committee Chairman Charles B. Rangel (D-NY) and Ways and Means Trade Subcommittee Chairman Sander L. Levin (D-MI) introduced H.R. 6530, the Trade Enforcement Act of 2008. The bill contains a number of provisions that would modify existing laws on counterfeiting and piracy, import safety, market access for U.S. goods and services and trade remedies.

For example, the bill would codify the application of countervailing duty (CVD) law to non-market economies, such as China, and would require a stronger congressional oversight over a number of proposed changes to the methodology used by the U.S. in antidumping and CVD cases.

The full text of the bill can be found here.

Given the short time remaining in the current session of Congress, prospects for passage of this legislation remain low this year.

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July 13, 2008 

WTO Reports Decline in Number of Antidumping Investigations

The World Trade Organization (WTO) has recently reports that the number of new new antidumping investigations declined by 7% during the second half of 2007 and the number of new antidumping orders (also referred to as "measures") also fell by 12% during the same period.

During July-December 2007, 14 WTO Members reported initiating a total of 101 new antidumping investigations, compared with 109 initiations in the corresponding period of 2006. A total of 13 Members reported applying 58 new final anti-dumping measures during the second half of 2007, compared with 66 new measures reported by 15 WTO Members during the same period in 2006.

Not surprisingly, China remained the most frequent subject of the new investigations, with 40 initiations directed at its exports during July-December 2007, virtually unchanged from the 39 new investigations on exports from China that were reported for the corresponding period of 2006. South Korea and Thailand were the second most frequent subjects, with eight new initiations each directed at their exports during the second half of 2007, compared with six and three, respectively, during the second half of 2006.

The products that were most frequently subject to the reported new antidumping investigations during the second half of 2007 were in the machinery and equipment sector (23 initiations), followed by chemicals (18 initiations), textiles (11), and base metals (10).

The number of antidumping investigations is likely to increase in 2008 as a result of the slowing world economy.

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May 28, 2008 

Two Persons Arrested in Chicago Relating to Chinese Honey Imports

Two executives of the U.S. operations of Alfred L. Wolff, a German-based food ingredients company, were arrested in Chicago on Friday for allegedly conspiring to import honey from China that was falsely identified to avoid U.S. antidumping duties and containing an antibiotic not approved by the FDA.

According to
the U.S. Attorney for the Northern District of Illinois, a confidential informant who worked for the company told U.S. Immigration and Customs Enforcement (ICE) agents that it was common knowledge among company executives, including one of the defendants, that shipments of imported honey frequently were contaminated with antibiotics that were banned by the FDA. Documents seized pursuant to a search warrant executed at the company's Chicago offices in March allegedly included test results showing that company officials were advised that one shipment of honey was adulterated with an antibiotic, but nonetheless sold it to a company in Texas.

According to the complaint affidavit, the shipping documents accompanying the imported honey indicated that it was produced in, and exported from, Russia, which, unlike honey from China, is not subject to antidumping duties. Laboratory tests allegedly showed that several of the containers held honey produced in China.

One defendant was arrested at O’Hare International Airport just before she was to board a flight to Germany Friday night. The second defendant was arrested at the airport after dropping off the first defendant for the flight to Germany.

If convicted, the conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine.

According to a story on this arrest that appeared on the FoodNavigator.com site, Alfred L. Wolff's managing director denied the allegations and said: "These accusations are wrong and shall be rebutted and we will defend ourselves against these allegations with all legal means."

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May 06, 2008 

Commerce Department Finds Insufficient Evidence to Self-Initiate Antidumping Case on Apparel Imports From Vietnam

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.

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April 23, 2008 

GAO Recommends That Congress and Agencies Take Action to Improve Collection of Antidumping and Countervailing Duties

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.

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April 22, 2008 

U.S. Supreme Court to Consider Antidumping Appeals

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.

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November 06, 2007 

Commerce Department Makes Preliminary Countervailing Duty Determination on Standard Pipe from China

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.

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September 03, 2007 

Support Grows for American Manufacturing Competitiveness Act

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.

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Antidumping Petitions Filed on Electrolytic Manganese Dioxide From China & Australia/ITC Votes to Continue AD & CVD Cases on Off-Road Tires from China

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.

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August 03, 2007 

Trade Enforcement Act of 2007 Introduced in Congress

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.

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July 31, 2007 

Antidumping Case Filed on Steel Wire Garment Hangers From China

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.

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July 25, 2007 

Commerce Department Seeking Comments on Surrogate Country Selection in Proceedings Involving Non-Market Economy Countries

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.

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July 23, 2007 

ITC Makes Preliminary Affirmative Injury Findings on Circular Welded Carbon-Quality Steel Pipe From China

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.

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June 29, 2007 

Antidumping and Countervailing Duty Petitions Filed Against Laminated Bags From China; Commerce Initiates Investigations on Circular Pipe From China

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).

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June 28, 2007 

Antidumping and Countervailing Duty Petitions Filed on Light-Walled Rectangular Pipe

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.

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June 19, 2007 

Antidumping and Countervailing Duty Petitions Filed on Off Road Tires From China

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.

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June 13, 2007 

Senate Holds Hearing on Trade Enforcement in the 21st Century

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.

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June 11, 2007 

Antidumping and Countervailing Duty Cases Filed on Standard Pipe From China

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.

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June 03, 2007 

ITC Initiates Antidumping Case on Steel Nails from China and UAE

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.

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May 31, 2007 

Sunset Review Leads to Revocation of Antidumping Orders on OCTG From Argentina, Italy, Japan, Korea and Mexico

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.

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Commerce Department Announces Preliminary Dumping Margins on Coated Free Sheet Paper

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.

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May 29, 2007 

Antidumping Petition Filed Against Steel Nails from China and the UAE

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.

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April 13, 2007 

Commerce Department Implements WTO's Zeroing Decision

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.

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April 08, 2007 

Commerce Department Publishes Countervailing Duty Determinations on Coated Groundwood Paper from China, Korea and Malaysia

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.

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April 01, 2007 

Antidumping Petition Filed on Glycine from India, Japan and South Korea

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.

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January 03, 2007 

CBP to Conduct Byrd Amendment Audits

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.

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January 02, 2007 

U.S. Department of Commerce to Eliminate "Zeroing" Methodology in Antidumping Investigations

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.

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December 19, 2006 

ITC Votes to Continue Antidumping and Countervailing Duty Cases on Coated Free Sheet Paper

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.

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