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1 For Presentation Purposes Only Impact of Trade Remedy Actions On U.S. Exports Import Administration’s Office of Policy September 28, 2012.

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Presentation on theme: "1 For Presentation Purposes Only Impact of Trade Remedy Actions On U.S. Exports Import Administration’s Office of Policy September 28, 2012."— Presentation transcript:

1 1 For Presentation Purposes Only Impact of Trade Remedy Actions On U.S. Exports Import Administration’s Office of Policy September 28, 2012

2 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. 2 For Presentation Purposes Only

3 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. For Presentation Purposes Only 3

4 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. For Presentation Purposes Only 4

5 By the Numbers On an annualized basis, approximately $9.8 billion of U.S. exports were subject to foreign trade remedy actions in 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. For Presentation Purposes Only 5

6 What is Dumping? 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. 6 For Presentation Purposes Only

7 What is a Subsidy? 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. 7 For Presentation Purposes Only

8 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. 8 For Presentation Purposes Only

9 9 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

10 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 10 Source: WTO Trade Statistics as of December 2011

11 11 Source: TRCS, as of August 7, 2012 For Presentation Purposes Only Argentina Australia Brazil Canada China Costa Rica European Union India Indonesia Korea Malaysia Mexico Pakistan Peru South Africa Turkey There are approximately 80 antidumping actions affecting U.S. exports to the following countries:

12 12 Source: TRCS, as of August 7, 2012 For Presentation Purposes Only Foreign Countries with Global Safeguard Measures in Place Brazil Dominican Republic Ecuador Egypt India Indonesia Philippines Russia Thailand Turkey Ukraine

13 13 For Presentation Purposes Only Industries Worldwide Most Commonly Subject to Trade Remedies  Base Metals (steel)  Chemicals  Plastics  Textiles  Machinery (incl. parts)  Wood Pulp/Paper Source: WTO Trade Statistics, as of December 2011

14 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. 14 For Presentation Purposes Only

15 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. 15 For Presentation Purposes Only

16 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. 16 For Presentation Purposes Only

17 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. 17 For Presentation Purposes Only

18 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. 18 For Presentation Purposes Only

19 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. 19 For Presentation Purposes Only

20 Manufacturing & Services Market Access & Compliance U.S. Foreign Commercial Service United States Trade Representative U.S. International Trade Commission U.S. Department of State U.S. Department of Agriculture IA Works Closely with Other ITA Bureaus and Interagency to Accomplish Our Compliance Mission For Presentation Purposes Only Import Administration 20 U.S. Treasury Department

21 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 For Presentation Purposes Only 21

22 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) For Presentation Purposes Only 22

23 Steps to Take When A Company Facing a Foreign Trade Remedy Action Seeks Help 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 23 For Presentation Purposes Only

24 Import Administration Resources Trade Remedy Compliance Staff (TRCS) – Telephone: (202) Subsidies Enforcement Office (SEO) – Petition Counseling and Analysis Unit (PCAU) –AD/CVD Petition Information Resource Center/Hotline (202) – IA Communications (All other IA issues) –Telephone: For Presentation Purposes Only


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