As the number of antidumping and countervailing duty orders in effect in the U.S. continues to soar, a new report concludes that the U.S. is unlikely to change its rules to consider the impact of AD/CV duties on those that purchase or use affected goods.
According to the report from the Government Accountability Office, AD/CV duties are among the most commonly applied U.S. trade remedies. In fiscal year 2021, $30.2 billion of imported goods were subject to AD/CV duties, and the U.S. currently has 671 active AD/CV orders in place affecting imports from 59 countries. Moreover, during the ten-year period ending in FY 2021, 73.8 percent of the 585 petitions received resulted in new AD/CV duty orders.
Some observers have argued that AD/CV duties may have adverse effects on other economic sectors, the report states, such as increased costs for downstream entities such as industrial users, consumers, importers, wholesalers, and retailers. However, current law contains no provision for the International Trade Commission to consider such effects in its AD/CV injury investigations, and ITC officials said the agency’s injury determinations focus exclusively on injury to domestic producers. While the ITC does solicit downstream purchaser information as part of its injury investigations, the GAO states, it does so in an effort to understand conditions of competition in the product’s home market and determine whether injury to the U.S. industry comes from imports.
Moreover, the U.S. appears to have no interest in changing the existing rules. The report notes that World Trade Organization members are allowed to consider the impact of trade measures on the public interest and have discussed the idea of amending WTO rules to make such an evaluation mandatory in AD/CV proceedings. However, the U.S. has consistently opposed this on various grounds. One argument is that while taking the side of consumer groups or users and traders of dumped imports could result in a short-term windfall, in the long term cheaper imports might be supplanted by monopolistically-priced imports that could injure the public as well. Another is that requiring public interest tests could politicize the use of AD/CV measures, as this kind of consideration is generally inherently policy-oriented, political, and subjective.
The report also addresses concerns that domestic companies may file AD/CV petitions without merit to obstruct competition in the U.S. market. Specifically, the GAO finds that the AD/CV process design includes features that function as internal controls that may lessen the risks of an investigation being initiated or conducted with inaccurate or incomplete information or of an industry filing a fraudulent or frivolous petition. These features relate to communication of process requirements through pre-petition counseling and public guidance, the extensive amount of information needed to support allegations in a petition (and the related costs), information certification requirements (and the criminal sanctions that may be imposed for false statements), independent collection and corroboration of petition information by federal agencies, and transparency of case information and of the rationale supporting agency determinations.
For more information on AD/CV duty issues, please contact attorney Kristen Smith at (202) 730-4965 or via email.
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