Thursday, April 26, 2007
Tweet[IWS] CRS: U.S. TRADE REMEDY LAWS & NON-MARKET ECONOMIES: A LEGAL OVERVIEW [23 April 2007]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Order Code RL33976
United States' Trade Remedy Laws and Non-market Economies: A Legal Overview
April 23, 2007
Todd B. Tatelman, Legislative Attorney, American Law Division
http://www.opencrs.com/rpts/RL33976_20070423.pdf
[full-text, 18 pages]
Summary
In the United States, there are two major forms of domestic trade remedy laws:
antidumping law (AD), which combats the sale of goods at less than their fair market
value, and countervailing duty law (CVD), which assess duties on imported goods
to offset the amount of government or other public entity subsidization. Both of
these remedies are available when the imported goods come from competitor
countries that have free market policies. Since 1984, however, only AD law has been
applied to those imported goods that come from non-market or other "transitional"
economies. With the continued economic growth of some non-market and
"transitional" economies, such as China and Vietnam, pressure has increased on the
U.S. government to more aggressively utilize domestic trade remedy laws such as
AD and CVD against unfair imports from these countries.
AD law has been amended several times since its initial inception in 1921. Each
modern amendment has allowed for a new methodology for dealing with imports
from non-market economies. With Congress's continued statutory guidance, the
Department of Commerce (DOC) has developed and implemented several different
methodologies for applying AD law, even when the fair market value in the
originating country is not readily ascertainable.
CVD law, however, has not been used against non-market economies since the
DOC concluded in 1984 that it could not determine subsidization in such situations.
This decision by the DOC was upheld as reasonable by the Court of Appeals for the
Federal Circuit in Georgetown Steel Corporation v. United States. Since that time,
with the noted exception of a 1991 petition against China, the DOC has refused to
review CVD petitions against non-market economies. In November 2006, however,
the DOC accepted a petition seeking a countervailing duty against imported "coated
free-sheet paper" from China to offset alleged government subsidization. In April
2007, the DOC published a preliminary determination levying duties against the
Chinese imports, as well as a memorandum distinguishing the Chinese economy
from those economies that were at issue in the Georgetown Steel case.
While such an action appears to be consistent with U.S. law, a review of U.S.
international obligations under the World Trade Organization's (WTO's) Agreement
on Subsidies and Countervailing Measures, as well as China's accession agreement
to the WTO is also required. Both agreements appear to accept and sanction the use
of surrogate country data in the application of domestic AD or CVD law. As a result,
while a challenge to its actions at the WTO is always a possibility, the United States
appears to have acted in a manner consistent with its obligations.
Several pieces of legislation have been introduced in the 110th Congress to
specifically address the application of CVD laws to non-market economies. These
include, but are not limited to, H.R. 708, H.R. 910, H.R. 1127, H.R. 1229, S. 364,
and S. 974. This report will be updated as events warrant.
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Antidumping Law (AD) and Non-market Economies . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Application of AD Law to Non-market Economies: Various Approaches . . . .. . . . 2
Countervailing Duty Law (CVD) and Non-market Economies . . . . . . . . . . 4
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Application of CVD Law to Non-market Economies . . . . . . . . . . . . . . 5
Court of International Trade's Decision . . . . . . . . . . . . . . . . . . . . . . . . 7
Federal Circuit's Georgetown Steel Decision . . . . . . . . . . . . . . . . . . . . 8
Post Georgetown Steel Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Recent Application of CVD Law to "Coated Free-Sheet Paper" Imports from China . . .. . . 10
World Trade Organization Issues and Consistency . . . . . . . . . . . . . . . . . . . 13
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Order Code RL33976
United States' Trade Remedy Laws and Non-market Economies: A Legal Overview
April 23, 2007
Todd B. Tatelman, Legislative Attorney, American Law Division
http://www.opencrs.com/rpts/RL33976_20070423.pdf
[full-text, 18 pages]
Summary
In the United States, there are two major forms of domestic trade remedy laws:
antidumping law (AD), which combats the sale of goods at less than their fair market
value, and countervailing duty law (CVD), which assess duties on imported goods
to offset the amount of government or other public entity subsidization. Both of
these remedies are available when the imported goods come from competitor
countries that have free market policies. Since 1984, however, only AD law has been
applied to those imported goods that come from non-market or other "transitional"
economies. With the continued economic growth of some non-market and
"transitional" economies, such as China and Vietnam, pressure has increased on the
U.S. government to more aggressively utilize domestic trade remedy laws such as
AD and CVD against unfair imports from these countries.
AD law has been amended several times since its initial inception in 1921. Each
modern amendment has allowed for a new methodology for dealing with imports
from non-market economies. With Congress's continued statutory guidance, the
Department of Commerce (DOC) has developed and implemented several different
methodologies for applying AD law, even when the fair market value in the
originating country is not readily ascertainable.
CVD law, however, has not been used against non-market economies since the
DOC concluded in 1984 that it could not determine subsidization in such situations.
This decision by the DOC was upheld as reasonable by the Court of Appeals for the
Federal Circuit in Georgetown Steel Corporation v. United States. Since that time,
with the noted exception of a 1991 petition against China, the DOC has refused to
review CVD petitions against non-market economies. In November 2006, however,
the DOC accepted a petition seeking a countervailing duty against imported "coated
free-sheet paper" from China to offset alleged government subsidization. In April
2007, the DOC published a preliminary determination levying duties against the
Chinese imports, as well as a memorandum distinguishing the Chinese economy
from those economies that were at issue in the Georgetown Steel case.
While such an action appears to be consistent with U.S. law, a review of U.S.
international obligations under the World Trade Organization's (WTO's) Agreement
on Subsidies and Countervailing Measures, as well as China's accession agreement
to the WTO is also required. Both agreements appear to accept and sanction the use
of surrogate country data in the application of domestic AD or CVD law. As a result,
while a challenge to its actions at the WTO is always a possibility, the United States
appears to have acted in a manner consistent with its obligations.
Several pieces of legislation have been introduced in the 110th Congress to
specifically address the application of CVD laws to non-market economies. These
include, but are not limited to, H.R. 708, H.R. 910, H.R. 1127, H.R. 1229, S. 364,
and S. 974. This report will be updated as events warrant.
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Antidumping Law (AD) and Non-market Economies . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Application of AD Law to Non-market Economies: Various Approaches . . . .. . . . 2
Countervailing Duty Law (CVD) and Non-market Economies . . . . . . . . . . 4
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Application of CVD Law to Non-market Economies . . . . . . . . . . . . . . 5
Court of International Trade's Decision . . . . . . . . . . . . . . . . . . . . . . . . 7
Federal Circuit's Georgetown Steel Decision . . . . . . . . . . . . . . . . . . . . 8
Post Georgetown Steel Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Recent Application of CVD Law to "Coated Free-Sheet Paper" Imports from China . . .. . . 10
World Trade Organization Issues and Consistency . . . . . . . . . . . . . . . . . . . 13
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 4:38 PM
