Impact of Trade Remedy Actions
On U.S. Exports
Import Administration’s Office of Policy
September 28, 2012
For Presentation Purposes Only
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Why are Trade Remedies Necessary?
• Unfair foreign pricing, government subsidies, or
a sudden surge in imports may distort the free
flow of goods and adversely affect business in a
given country’s market.
• Trade remedy investigations are an accepted
course for dealing with unfair trade practices and
the appropriate use of measures to address these
practices plays an important role in maintaining
support for open markets and increased trade.
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Trade Remedies and U.S. Exporters
In the United States
•
U.S. trade remedy laws address unfair foreign trade practices,
thereby helping to level the playing field in the U.S. market, and
to build strong, vibrant companies capable of expanding exports.
•
U.S. trade remedy laws are fully compliant with U.S. World Trade
Organization (WTO) obligations.
•
Import Administration’s AD/CVD Operations administers and
implements application of U.S. trade remedy laws and
regulations.
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Trade Remedies and U.S. Exporters
In Foreign Markets
•
Foreign use of trade remedies has a direct impact on access by
U.S. exports to foreign markets.
•
Import Administration (IA) monitors foreign trade remedy use
for compliance with WTO rules.
•
IA advocates for U.S. exporters that are treated unfairly or
inconsistent with WTO rules in foreign trade remedy actions.
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By the Numbers
•
On an annualized basis, approximately $9.8 billion of U.S.
exports were subject to foreign trade remedy actions in 2011.
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In 2011, IA assisted more than 100 companies subject to foreign
trade remedy actions. These companies employ more than 1.6
million U.S. workers.
•
In 2011, 13 foreign trade remedy measures were terminated by
foreign authorities. The export markets affected by these
terminated measures are estimated to be worth approximately
$330 million.
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What is Dumping?
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Generally, dumping occurs when a producer sells a product in a
foreign market at a price that is below that producer’s sales price
in the country of origin (home market), or at a price that is lower
than the cost of production.
If an industry, either U.S. or foreign, believes that it is being
injured by unfair competition through dumping of a foreign
product imported into its domestic market, it may request the
imposition of an antidumping (AD) duty by filing a petition with
its trade remedy administering authority.
WTO rules allow application of AD measures when an authority
finds that a domestic industry is being materially injured as a
result of dumped imports. Dumping, injury, and causation must
all be established.
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What is a Subsidy?
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Foreign governments subsidize industries when they provide
financial assistance to benefit either or both of the:
– Manufacture of goods
– Exportation of goods
Subsidies can take many forms such as:
– Direct cash payments
– Credits against taxes
– Loans at terms that do not reflect market conditions
Subsidies may be addressed if they meet conditions set forth
under the WTO Agreement on Subsidies and Countervailing
Measures (“SCM Agreement”).
Subsidies can be addressed either multilaterally or under
domestic countervailing duty (CVD) rules.
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What is a Safeguard?
•
A “safeguard” action may be taken by a WTO member to protect a
specific domestic industry from an increase in imports of any
product which is causing, or which is threatening to cause,
serious injury to the industry.
•
Safeguards are not company or even country-specific. Rather,
with certain exceptions specified in the WTO Safeguards
Agreement, they apply to imports from all countries—hence the
expectation that safeguards are to be used only in rare
circumstances.
•
If an industry feels that a sudden increase of imports is causing or
threatening to cause serious injury, it may file a request with its
administering authority to have a global safeguard measure
temporarily put in place on those imports.
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Global Trade Remedy Activity
• On average, more than 100 new AD measures were
imposed by WTO members in each of the last 10
years.
• Over 80 CVD measures were imposed during the
last 10 years.
• Close to 40 global safeguard measures are currently
in effect.
Source: WTO Trade Statistics as of December 2011
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Most Frequent Users of AD/CVD Measures
Antidumping
1. India
2. European Union
3. United States
4. Argentina
5. Turkey
6. China
7. South Africa
8. Brazil
9. Canada
10. Mexico
Countervailing Duty
1. United States
2. European Union
3. Canada
4. Mexico
5. Brazil
Source: WTO Trade Statistics as of December 2011
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There are approximately 80 antidumping actions
affecting U.S. exports to the following countries:
Argentina
Australia
Brazil
Canada
China
Costa Rica
European Union
India
Indonesia
Korea
Malaysia
Mexico
Pakistan
Peru
South Africa
Turkey
Source: TRCS, as of August 7, 2012
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Foreign Countries with Global Safeguard Measures in Place
Brazil
Dominican Republic
Ecuador
Egypt
India
Indonesia
Philippines
Russia
Thailand
Turkey
Ukraine
Source: TRCS, as of August 7, 2012
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Industries Worldwide Most Commonly Subject to
Trade Remedies
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Base Metals (steel)
Chemicals
Plastics
Textiles
Machinery (incl. parts)
Wood Pulp/Paper
Source: WTO Trade Statistics, as of December 2011
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How Can U.S. Exporters Reduce Their
Vulnerability to a Foreign Trade Remedy Action?
Antidumping
• Closely monitor prices charged in foreign markets in comparison
to prices charged domestically.
• Closely monitor increased shipments to foreign markets by
relevant industry participants as this may result in injurious
import surges.
• Maintain awareness of changing export-market conditions, e.g.,
market share held by foreign and domestic producers, joint
ventures, new entrants, reduced barriers to entry, and shifts in
supply or demand for goods; all of which can affect the dumping
and injury situations.
• Gain an understanding of competitors and circumstances in
which they have sought relief via trade remedies in other
markets.
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How Can U.S. Exporters Reduce Their
Vulnerability to a Foreign Trade Remedy Action?
Countervailing Duty
• Be mindful that if a company accepts federal, state or local
incentives, its exports could be subject to countervailing duties if
the incentives are found to meet the criteria for a countervailable
subsidy.
•
This is true for a wide range of incentives such as tax rebates and
exemptions, grants, certain preferential loans and loan
guarantees, and government-provided goods or services, such as
low cost electricity.
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How Can U.S. Exporters Reduce Their
Vulnerability to a Foreign Trade Remedy Action?
Safeguards
• The global, and not company or country-specific,
application of a safeguard makes it difficult for an
individual exporter to defend against.
• The best option is to monitor export markets closely and to
avoid rapid import surges into those markets that are
particularly distressed or depressed.
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What Import Administration Resources Exist to Help
U.S. Exporting Companies?
• IA monitors foreign countries’ use of AD, CVD, and
safeguard actions, as well as foreign government
subsidies.
• IA also helps U.S. companies to understand U.S. unfair
trade laws, and the process of and requirements for filing
a petition requesting initiation of an AD or CVD
investigation of imports into the United States.
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Import Administration’s Resources for
U.S. Exporters
IA’s Office of Policy:
• Trade Remedy Compliance Staff (TRCS) is the U.S. Government’s
watchdog charged with monitoring foreign trade remedy
practices. TRCS proactively addresses trade remedy actions (AD
and safeguards) taken by foreign governments in order to support
U.S. industry efforts to compete on a level playing field in the
international marketplace.
• Subsidies Enforcement Office (SEO) similarly monitors CVD
actions and foreign subsidies. The SEO is further charged with
monitoring foreign CVD cases, and works diligently to defend U.S.
interests in cases launched against U.S. exports.
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Import Administration’s Resources for
U.S. Exporters
IA’s Office of Policy (con’t):
• Petition Counseling and Analysis Unit (PCAU) helps U.S.
companies understand U.S. unfair trade laws and the process of
filing a petition requesting the initiation of an AD and/or CVD
investigation.
• PCAU provides guidance in the type of information required to
pursue an action against a foreign industry suspected of unfair
trade practices and helps potential petitioners ensure that their
petition is in compliance with statutory standards.
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IA Works Closely with Other ITA Bureaus and
Interagency to Accomplish Our Compliance Mission
U.S. Foreign
Commercial
Service
U.S.
International
Trade
Commission
U.S.
Department of
State
Market Access &
Compliance
Manufacturing &
Services
Import
Administration
U.S. Department
of Agriculture
United States Trade
Representative
U.S. Treasury
Department
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Case Study—
U.S. Chicken Industry and Trade Remedies
South Africa—AD determination by investigating authority taken
to the South African courts for disposition
Ukraine– AD petition withdrawn by petitioner
China– AD and CVD duties now the subject of a U.S. challenge
before the WTO Dispute Settlement Body
Mexico—AD investigation completed with duties suspended
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Case Study—
U.S. Chicken Industry and Trade Remedies
Aspects of Interest:
• Interagency collaboration—IA, USTR, FAS, State, ITC
• Multiple respondents and industry association
• Presence of case issues with multi-national application
• Detection of both substantive and procedural concerns, keeping
in mind U.S. practices
• Direct USG participation in the proceedings (e.g., hearing
statements, written submissions)
• Interventions in fora outside of investigating authorities (e.g.,
WTO committees)
• Evaluation of final outcome, and possible further action (e.g.,
TPSC decision to challenge at the WTO)
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Steps to Take When A Company Facing a Foreign
Trade Remedy Action Seeks Help
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Contact IA immediately upon becoming aware of a foreign trade
remedy case—deadlines for participation/registration in a
proceeding are often very tight.
Let IA know if you hear from companies with concerns about
foreign trade remedy cases—keep in mind there may be more
than one U.S. company with an interest in the investigation.
Coordination of outreach efforts (with both foreign governments
and U.S. companies) can be critical, particularly since there are
often U.S. practices to be considered
Contacting IA will help you and the company:
– Gain information on procedures and processes
– Discuss avenues of response
– Raise concerns with USG experts on trade remedies
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Import Administration Resources
http://www.trade.gov/ia/index.asp
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Trade Remedy Compliance Staff (TRCS)
– Email: TRCS@trade.gov; Telephone: (202) 482-3415
Subsidies Enforcement Office (SEO)
– Email: SEO@trade.gov
Petition Counseling and Analysis Unit (PCAU)
– AD/CVD Petition Information Resource Center/Hotline
(202) 482-1255
– Email: Petition_Counseling@ita.doc.gov
IA Communications (All other IA issues)
– Telephone: 202-482-0063
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