tag:blogger.com,1999:blog-82901174260691675412024-02-20T08:48:53.831-08:00Consuming Industries Trade Action CoalitionCITAC: Keeping the channels of trade openCITAChttp://www.blogger.com/profile/07676735942028832160noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-8290117426069167541.post-54980383797022087952013-12-13T12:07:00.001-08:002013-12-13T12:07:28.666-08:00CITAC: Electrical Steel Trade Case Threatens Supply Shortage and Prohibitive Cost Increases for U.S. Manufacturers <b><i>Washington, DC (December 13, 2013)</i></b>: The Consuming Industry Trade Action Coalition (CITAC), a coalition of U.S. companies representing consuming industries, highlighted concern today that recent trade remedy cases on electrical steel products could lead to severe supply shortages and prohibitive cost increases for U.S. manufacturers who purchase these products on global markets.<br />
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The antidumping and countervailing duty cases, filed with the U.S. Department of Commerce and U.S. International Trade Commission (USITC), charge that low-priced imports of non-oriented electrical steel from six countries and grain-oriented electrical steel from seven countries cause or threaten “material injury” to U.S. petitioners. <br />
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Electrical steel is used by a wide variety of U.S. manufacturers, including automotive, appliance, electric motor, electric generation and equipment manufacturers. The electrical steel is used for parts of many products, such as household transformers, fans, power tools, welding equipment, magnets, compressors and pumps.<br />
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“Important specifications for electrical steel used by U.S. manufacturers are not produced in the United States, but they were included by the petitioners in this case,” said CITAC Counsel Lewis Leibowitz, a partner at HoganLovells. “Potentially prohibitive duties could be imposed on these imports, meaning that many U.S. purchasers of electrical steel could find themselves unable to buy electrical steel that meets their needs. U.S. steel users would be unable to compete with foreign producers of these downstream products, which are not subject to the antidumping and countervailing duties. In some cases, 80% of the sale price of these products consist of the cost of materials. The result will be the loss of business to overseas competitors who can purchase these steel products at globally competitive prices. The law ignores these competitive problems.”<br />
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“We are hearing reports from our members, particularly those involved in manufacturing parts for generators and motors, that this trade case is already having a severe impact on their ability to source the electrical steel they need to meet their customers’ specifications,” said William E. Gaskin, President of the Precision Metalforming Association. “If this material is not available in the U.S., the result is obvious: the trade case will cause our members’ customers to source the parts currently made by our members from our competitors in Mexico or other countries. We hope that the USITC and Commerce Department consider the needs of U.S. manufacturers, who provide good jobs at good wages to tens of thousands of Americans across the country, when considering the merits of this trade case.”<br />
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The trade cases now go to the Commerce Department which will continue the investigation, and calculate preliminary antidumping duties and countervailing duty determinations. The petitioners are asking for duties in the non-oriented steel case ranging from 51% to 397% and grain-oriented steel case ranging from 39% top258%. Duties of 100% are generally considered to be “prohibitive,” making it impractical to import.<br />
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“It simply makes no economic sense to impose duties on imports of steel products that are not available for purchase by U.S. steel consuming manufacturers in the U.S.,” continued Leibowitz. “CITAC will be closely monitoring these cases. The law and the agencies that enforce it should pay attention to the needs of consuming industries for globally competitive inputs.”<br />
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The Consuming Industries Trade Action Coalition (CITAC) is a Washington, DC-based trade organization with one primary objective: to ensure that consuming industries and manufacturers in the United States have access to reliable supplies of globally-priced materials necessary for those industries to produce their products. For additional information, visit www.citac.info or contact Caitlin Andrews at (202) 828-7637 or caitlin.andrews@bgllp.com.<br />
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CITAChttp://www.blogger.com/profile/07676735942028832160noreply@blogger.com2tag:blogger.com,1999:blog-8290117426069167541.post-18160835642320668452013-01-17T14:25:00.000-08:002013-01-17T14:27:02.764-08:00TARGETING TARGETED DUMPING<span style="font-family: Arial, Helvetica, sans-serif;">An interesting op-ed was published yesterday on </span><a href="http://forbes.com/"><span style="font-family: Arial, Helvetica, sans-serif;">Forbes.com</span></a><a href="http://www.blogger.com/"></a><span id="goog_860289045"></span><span id="goog_860289046"></span><span style="font-family: Arial, Helvetica, sans-serif;"> by </span><a href="http://www.cato.org/people/daniel-ikenson"><span style="font-family: Arial, Helvetica, sans-serif;">Dan Ikenson, Director of the Herbert A. Stiefel Center for Trade Policy Analysis</span></a><span style="font-family: Arial, Helvetica, sans-serif;"> at The CATO Institute about the U.S. Commerce Department's use of the targeted dumping methodology in anti-dumping cases.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">In his piece </span><a href="http://www.forbes.com/sites/danikenson/2013/01/16/protectionist-antidumping-regime-is-a-pox-on-americas-glass-house/"><span style="font-family: Arial, Helvetica, sans-serif;">Protectionist Antidumping Regime is A Pox on America's Glass House</span></a><span style="font-family: Arial, Helvetica, sans-serif;">, Ikenson writes that the U.S. makes a strong case for itself as the worst international trade scofflaw.<span style="mso-spacerun: yes;"> </span>He points to the </span><a href="http://usitc.gov/trade_remedy/731_ad_701_cvd/investigations/2012/washers/finalphase.htm"><span style="font-family: Arial, Helvetica, sans-serif;">current anti-dumping case on large residential washers</span></a><span style="font-family: Arial, Helvetica, sans-serif;"> that pits Whirlpool against Samsung and other foreign competitors as evidence "that the United States is actively seeking that ignominious distinction."<o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Ikenson explains that U.S. anti-dumping rules have been found to violate U.S. obligations under the WTO Antidumping Agreement dozens of times. "In 12 of the 45 cases in which ADA violations were alleged by U.S. trading partners, the methodological trick know as 'zeroing' was at least one of the subjects of controversy."<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">'Zeroing' refers to the treatment of export sales to the U.S. when they are compared to “normal value” -- or the foreign value -- of similar goods in antidumping proceedings.<span style="mso-spacerun: yes;"> </span>Goods that are sold for less than their normal value have “positive” comparisons.<span style="mso-spacerun: yes;"> </span>However, when the Commerce Department finds transactions in the U.S. that occur at prices higher than normal value, it chooses to ignore those sales (“zeroing” them) rather than averaging them into the final calculations as the WTO requires.<span style="mso-spacerun: yes;"> </span>By reducing the impact of those transactions on the final calculations, Commerce’s zeroing practice leads to artificially inflated dumping margins.<span style="mso-spacerun: yes;"> </span>(For more, check out the CITAC press releases on zeroing </span><a href="http://www.citac.info/press/release/2009/CITACApplaudsComerceProposaltoEndZeroing.php"><span style="font-family: Arial, Helvetica, sans-serif;">here</span></a><span style="font-family: Arial, Helvetica, sans-serif;">, </span><a href="http://www.citac.info/press/release/2009/CITACApplaudsComerceProposaltoEndZeroing.php"><span style="font-family: Arial, Helvetica, sans-serif;">here</span></a><span style="font-family: Arial, Helvetica, sans-serif;"> and </span><a href="http://www.citac.info/press/release/2009/CITACApplaudsU.S.DecisiontoAbandonDiscreditedPracticeofZeroing.php"><span style="font-family: Arial, Helvetica, sans-serif;">here</span></a><span style="font-family: Arial, Helvetica, sans-serif;">.)<span style="mso-spacerun: yes;"> An </span></span><a href="http://www.cato.org/sites/cato.org/files/pubs/pdf/tpa-020.pdf"><span style="font-family: Arial, Helvetica, sans-serif;">analysis by the Cato Institute</span></a><span style="font-family: Arial, Helvetica, sans-serif;"> found that in a sample of 18 actual antidumping case records reviewed, zeroing artificially inflated antidumping duties by 44 percent.<o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">The WTO ruled the practice of zeroing illegal with one possible tiny exception - if "targeted dumping” is found.<span style="mso-spacerun: yes;"> </span>Targeted dumping is found when Commerce looks back at the prices that a foreign producer charged in a particular period and then concludes, in retrospect, that it charged lower prices than it should have to certain customers, or in certain months, or in certain regions of the country. <o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">To no one’s surprise, petitioners are now including allegations of targeted dumping in most trade petitions. Ikenson writes that "the Commerce Department is ...making this tiny, rarely-ever-used exception the new rule so that it has license to engage in zeroing and inflate antidumping duty rates on behalf of certain domestic producers."<span style="mso-spacerun: yes;"> </span>Ikenson continues "Ultimately, this issue is the motivation behind the Commerce Department’s shenanigans in the case involving imported washing machines, targeted dumping, and Black Friday sales.<o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">In the Whirlpool case, to evaluate alleged dumping of washers, Commerce is using the Post-Thanksgiving holiday “Black Friday” sales prices to prove that the respondents “targeted” the this time period, even though -- surprise, surprise - lots of companies grant deeper discounts on selected models during these holiday promotion periods.<span style="mso-spacerun: yes;"> </span>So is the message from Commerce to any non-U.S. company that if they participate in holiday sales they risk being accused of dumping?<span style="mso-spacerun: yes;"> </span>How can they know what price is safe to sell their product to avoid such an accusation? As you can see, it's a slippery slope.<o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Ikenson concludes:<span style="mso-spacerun: yes;"> </span>“The United States is definitely one of the world’s biggest trade scofflaws and the antidumping regime remains fertile ground for more mischief.”<o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">In the Whirlpool case, </span><a href="http://ia.ita.doc.gov/download/factsheets/factsheet_korea-mexico-adcvd-final-20121219.pdf"><span style="font-family: Arial, Helvetica, sans-serif;">Commerce published final dumping margins</span></a><span style="font-family: Arial, Helvetica, sans-serif;"> in December.<span style="mso-spacerun: yes;"> </span>The final action is with the ITC and a vote is expected on January 23.<o:p></o:p></span></div>
<span style="color: black;"></span><span style="font-family: Arial, Helvetica, sans-serif;"> </span>CITAChttp://www.blogger.com/profile/07676735942028832160noreply@blogger.com0tag:blogger.com,1999:blog-8290117426069167541.post-46911449883042884592013-01-14T07:25:00.000-08:002013-01-14T07:25:01.860-08:00LNG Exports and Consuming Industries in the United States<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Arial;">A Big Benefit for the US and Global Economy<o:p></o:p></span></div>
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<span style="font-family: Arial;">Natural gas users have taken a keen interest in recent requests for authorization to export liquefied natural gas (LNG) from the U.S.<span style="mso-spacerun: yes;"> </span>In December, the DOE released a long-awaited </span><a href="http://www.fossil.energy.gov/programs/gasregulation/reports/nera_lng_report.pdf"><span style="font-family: Arial;">study on natural gas exports</span></a><span style="font-family: Arial;">.<span style="mso-spacerun: yes;"> </span>Under the Natural Gas Act, the Department of Energy is authorized to restrict exports of natural gas by time period or quantity, except to Free Trade Agreement countries that extend non-discriminatory treatment to US exports.<span style="mso-spacerun: yes;"> </span>One LNG license has already been approved without volume restriction.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: Arial;">Several large industrial users of natural gas have advocated limits on LNG exports to keep natural gas prices low in the US market.<span style="mso-spacerun: yes;"> </span>Low prices, they claim, would make U.S. manufacturers more globally competitive.<span style="mso-spacerun: yes;"> </span>However, the DOE-commissioned study found that increased exports of natural gas would benefit the U.S. economy as a whole, creating jobs in export-related industries as well as income from exports.<span style="mso-spacerun: yes;"> </span>Who’s right?<o:p></o:p></span></div>
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<span style="font-family: Arial;">Economic theory (and, to be fair, most observation) indicates that restrictions on exports create similar inefficiencies as import protectionism.<span style="mso-spacerun: yes;"> </span>Export restrictions reduce the incentive to invest in production of products and services whose prices are held down, just as restrictions on import trade reduce the incentive to invest in the protected market in favor of other markets.<span style="mso-spacerun: yes;"> </span>In time, the price of natural gas would approach world price levels, but at a higher price in the US than if production were not constrained.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: Arial;">International trade agreements also discourage export restrictions, but allow them in certain circumstances.<span style="mso-spacerun: yes;"> </span>The General Agreement on Tariffs and Trade (GATT) provides that a country may not restrict exports (with exceptions not relevant here) except by means of export duties and taxes, which are open and transparent.<span style="mso-spacerun: yes;"> </span>Perhaps because the US always discouraged export restrictions for economic reasons, the US agreed to this condition.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: Arial;">But the U.S. Constitution prohibits export duties and taxes.<span style="mso-spacerun: yes;"> </span>So, any quantitative restrictions on LNG exports from the U.S. would face tough sledding and potential condemnation in the World Trade Organization.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: Arial;">The Commerce Department examines alleged subsidies by foreign governments in countervailing duty cases.<span style="mso-spacerun: yes;"> </span>Commerce has found that they amount to government subsidies to overseas producers, because they provide inputs at lower than commercial prices.<span style="mso-spacerun: yes;"> </span>If other countries examined LNG export restrictions, they might well find that these restrictions provide subsidies to production of natural gas-intensive manufacturing.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: Arial;">As advocates for consuming industries, CITAC believes that open access to raw materials creates the maximum benefit for all manufacturing.<span style="mso-spacerun: yes;"> </span>While the export restraint picture is more complex than import restraints, economic freedom creates more winners than restrictions do.<span style="mso-spacerun: yes;"> </span></span><o:p></o:p></div>
CITAChttp://www.blogger.com/profile/07676735942028832160noreply@blogger.com0tag:blogger.com,1999:blog-8290117426069167541.post-70189592659918760782012-05-07T19:13:00.000-07:002012-05-07T19:13:33.853-07:00U.S. Consuming Industries and Solar Cell/Panel Tariffs<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<b><i><span style="font-family: Arial;">By CITAC Staff</span></i></b><br />
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<span style="font-family: Arial;">Imports work to reduce the cost and increase the choices of consumers, including manufactuers, construction companies and developers. Our trade policy needs to consider the costs to our economy of protection, even when dealing with unfair trade.</span></div>
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<span style="font-family: Arial;">An April 23 <a href="http://articles.latimes.com/2012/apr/23/business/la-fi-solar-jobs-20120423">LA Times article</a> lays out the arguments on both sides, which is all too often not done. When both sides are considered, we see that the costs of preclusive tariffs on imports of solar cells and panels will probably outweigh the benefits. Unfortunately, that is usually the case, which is why antidumping and countervailing duty laws and procedures need to be re-examined and reformed. </span></div>
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<span style="font-family: Arial;">When duties are imposed by the Commerce Department, one key item of information is missing: the amount of the duties. Commerce only releases the amount of “deposit” required, which may be more or less than the final duties. Those duties are only revealed years after the entry. US importers responsible for paying the duties cannot pass on the duties in full, because the products they imported will already have been sold into the US market. When a large bill comes from Customs, the importer must pay it without hope of reimbursement—indeed, reimbursement is strongly discouraged under the US system. </span></div>
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<span style="font-family: Arial;">The only safe course for US importers faced with AD/CVD actions is to stop importing altogether. This denies the competitive benefits of imports in the US market.</span></div>
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<span style="font-family: Arial;">The solar cells and panels case is a good example. Cells and panels from China are accused of being dumped and subsidized. The Commerce Department, which investigates these allegations, is predisposed to find dumping, and nearly always does. Subsidies by China are also usually found, but even the Commerce Department generally has trouble finding extensive subsidies—they really are not there. However, because the final duties are not known for a long time, imports will dry up as long as the duties are a possibility. Imports will decline dramatically if not disappear.</span></div>
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<span style="font-family: Arial;">The effect of declining imports on the market is clear—solar energy competes with other forms of energy and will wither if the costs of construction and installation go up in comparison with other forms of electric generation. There will be fewer solar projects. This will cost jobs in construction, transportation, installation and maintenance in the solar energy field. While the federal government says it wants to encourage development of renewable energy, the Administration’s own Commerce Department is effectively discouraging it.</span></div>
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<span style="font-family: Arial;">While some claim that dumping and subsidies must be stopped at all costs, the reality is that we do not face such a stark choice. Antidumping and countervailing duty laws and procedures can be reformed to that they effectively take the impact of dumping and subsidies out of the market without stopping imports. Most countries outside the United States have trade remedy laws that do this much more effectively, and in a much more balanced way, than the United States.</span></div>
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<span style="font-family: Arial;">Since imports work for everyone, we owe it to ourselves to balance the impact of trade restrictions on the American economy. It is not hard to do—all it takes is the will to see both sides of the trade debate. </span></div>
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<br /></div>CITAChttp://www.blogger.com/profile/07676735942028832160noreply@blogger.com0tag:blogger.com,1999:blog-8290117426069167541.post-52980734143438467892012-04-18T16:01:00.000-07:002012-04-18T16:01:35.935-07:00ITC Rejects Duties on Bottom-Mount RefigeratorsIn addition to Steel Wheels, petitioners suffered another defeat at the ITC on the very same day when Commissioners voted 5-0 to not impose duties on imports of bottom-mount refrigerators from South Korea and Mexico, ruling that these imports did not harm the domestic industry. This cased pitted heavyweights in the appliance business -- Whirlpool (petitioner) against LG Electronics, Samsung and others. The ruling means that anti-dumping duties ranging up to over 30% won't be imposed. ITC Press Release is <a href="http://usitc.gov/press_room/news_release/2012/er0417kk1.htm">here</a>. Whirlpools statement is<a href="http://www.execdigital.com/press_releases/whirlpool-corporation-comments-on-anti-dumping-ruling-involving-bottom-mount-refrigerators-from-sout"> here</a>. News coverage included <a href="http://www.businessweek.com/ap/2012-04/D9U6RF000.htm">AP</a>, <a href="http://www.chicagotribune.com/news/sns-rt-us-usa-trade-dutiesbre83g1bu-20120417,0,5645310.story">Reuters</a> and <a href="http://online.wsj.com/article/SB10001424052702304432704577349833296592496.html?mod=googlenews_wsj">The Wall Street Journal</a>.CITAChttp://www.blogger.com/profile/07676735942028832160noreply@blogger.com0tag:blogger.com,1999:blog-8290117426069167541.post-16581690597181890222012-04-18T11:23:00.000-07:002012-04-18T11:23:35.847-07:00ITC Unanimously Rejects Duties on Steel Wheels from ChinaCITAC Counsel Lewis Leibowitz reports that the ITC voted no injury on steel wheels from China, one of the rare times that the ITC rejected dumping duties for China.<br />
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The vote was 6-0. Read the ITC news release <a href="http://usitc.gov/press_room/news_release/2012/er0417kk2.htm">here</a>.CITAChttp://www.blogger.com/profile/07676735942028832160noreply@blogger.com0tag:blogger.com,1999:blog-8290117426069167541.post-65823645253996502632012-04-03T07:45:00.001-07:002012-04-03T07:45:53.875-07:00Brazil and the US—A Comparison of Consuming Industries<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Arial;">Two recent cases brought to mind the CITAC comparison chart, of trade remedy practices in various countries.<span style="mso-spacerun: yes;"> </span>If you have seen the chart, you know that the US ranks last among major trading nations, along with China, in the friendliness of trade remedy practices to downstream industries and consumers.<span style="mso-spacerun: yes;"> </span>This is unfortunate, because it makes the US less competitive with other countries in manufacturing and retailing. </span></div>
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<span style="font-family: Arial;">One of the important issues is the ability to get suspension of antidumping or countervailing duties (or other remedies such as safeguards) in conditions of “short supply”.<span style="mso-spacerun: yes;"> </span>When raw materials are scarce, and the domestic industry cannot supply domestic customers, sound policy should require antidumping and countervailing duties to be reduced or suspended.</span></div>
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<span style="font-family: Arial;">In Brazil, this situation happened very recently.<span style="mso-spacerun: yes;"> </span>The sole significant producer of </span><span style="font-family: "Times New Roman", "serif"; font-size: 12pt; line-height: 110%; mso-fareast-font-family: "Times New Roman";">toluene diisocyanate </span><span style="font-family: Arial;">(TIS) in Brazil suspended production.<span style="mso-spacerun: yes;"> </span>The Brazilian authorities acted quickly, even though the antidumping duties on the product had been put in place only last November.<span style="mso-spacerun: yes;"> </span>When it became apparent that there would be a shortage of this important chemical (used to</span><span style="font-family: "Times New Roman", "serif"; font-size: 12pt; line-height: 110%; mso-fareast-font-family: "Times New Roman";"> make polyurethane, glues, varnishes and other products used in the furniture, mattress and automotive industries</span><span style="font-family: Arial;">), Brazil suspended antidumping duties on TSI for one year.<span style="mso-spacerun: yes;"> </span>The duties were significant, and applied to imports from the US and Argentina [confirm].</span></div>
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<span style="font-family: Arial;">Compare this to a recent case in the U.S. Court of International Trade.<span style="mso-spacerun: yes;"> </span>The sole remaining producer of a extruded rubber thread, product important to the textile industry, went into bankruptcy.<span style="mso-spacerun: yes;"> </span>Commerce initiated a “changed circumstances” review based on a filing by a Malaysian exporter and supported by the US producer.<span style="mso-spacerun: yes;"> </span>Actual users of the product lack standing under US law to request such a review.<span style="mso-spacerun: yes;"> </span>Commerce revoked the order prospectively, but later the importer/exporter and the bankrupt domestic producer asked for the revocation to be back-dated to 1995, to allow for refund of duties pursuant to a settlement agreement.<span style="mso-spacerun: yes;"> </span>Commerce refused.<span style="mso-spacerun: yes;"> </span>The parties appealed to the courts, which ruled on March 21 that Commerce should reconsider the request and remanded the case. </span></div>
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<span style="font-family: Arial;">The differences in how Brazil and the US handled these situations are instructive.<span style="mso-spacerun: yes;"> </span>In both cases, the domestic petitioner was not able to serve domestic demand.<span style="mso-spacerun: yes;"> </span>Brazil acted quickly and decisively, but not permanently, to open the market for downstream purchasers for an industrial chemical product.<span style="mso-spacerun: yes;"> </span>The U.S. authorities started a process only when both sides approached Commerce jointly and the petitioner asserted “no interest” in continued antidumping duties.<span style="mso-spacerun: yes;"> </span>Even then, when the parties reached a settlement that allowed for the recovery of import duties, Commerce balked.</span></div>
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<span style="font-family: Arial;">The US needs an effective to allow downstream users access to important sources of raw materials and finished goods that do not have adequate supplier in our market.<span style="mso-spacerun: yes;"> </span>Antidumping and countervailing duties make no sense if there is not adequate domestic supply.<span style="mso-spacerun: yes;"> </span>Petitioners, who are more interested in protection than in the national economic interest, have opposed such efforts at reform in the past.<span style="mso-spacerun: yes;"> </span>But the government should consider the interests of all in an economy that works, even while it addresses unfair trade.<span style="mso-spacerun: yes;"> </span></span></div>CITAChttp://www.blogger.com/profile/07676735942028832160noreply@blogger.com0