On April 23, 2015, a group of retailers[1] released a letter opposing five provisions that would strengthen the administration of existing U.S. trade enforcement laws. The provisions were included in the “Leveling the Playing Field” amendment raised during the House Ways and Means Committee mark-up of the customs reauthorization bill. The retail group opponents mischaracterize the provisions and misstate the law. Indeed, some of their arguments address provisions which are not part of the provisions included in Leveling the Playing Field amendment.

  • The provisions, which received bi-partisan support in the Senate Finance Committee, were included in the customs bill that the Finance Committee marked-up and reported by voice vote on April 22. Further, these provisions are supported by the Department of Commerce and the U.S. Trade Representative.
  • Additionally, these provisions are WTO consistent measures that help combat unfairly traded (dumped and subsidized) imports and strengthen the U.S. government’s enforcement and administration of the U.S. trade laws. These laws are critical tools for U.S. manufacturers, growers and workers in thousands of communities to combat trade distorting practices that threaten their ability to compete fairly in the global arena.

The retail opponents objected to only one of the five provisions; namely, the provision governing the use of adverse facts available (“AFA”) for uncooperative parties. Their objection is unsubstantiated.

  • If a foreign entity fails to respond to the U.S. Department of Commerce’s request for data during an AD/CVD investigation, current U.S. law and WTO rules provide our government, and all WTO member governments, the right to use facts that are adverse to that party. This was also the intent of Congress when it passed the original law and is necessary to incentivize foreign producers to provide Commerce, who has no subpoena power, the data necessary to perform an accurate investigation.
  • A court case inappropriately limited Commerce’s ability to apply adverse facts. The AFA provision corrects for the court’s overreach by clarifying original Congressional intent that Commerce should have the ability to select an appropriate AFA rate, and clarifies that this is not an “arbitrary penalty,” as the opponents suggest. In fact, the other facts used by Commerce must be fully corroborated (verified).

Opponents also claim that the trade law enforcement provisions, broadly, would unfairly penalize importers who make good faith efforts to interpret the scope of trade remedy orders, and exposes them to potentially “unsustainable retroactive liability.”

  • However, Commerce does not penalize importers for seeking to clarify the scope of the agency’s orders. In fact, Commerce has an entire process – scope proceedings – that is devoted to determining whether an importer’s products are in-scope merchandise and subject to duties. Moreover, many importers regularly use contracts and warranties to avoid any liability for dumping or subsidy duties and can (and often do) arrange not to be the importer of record (the importer of record is responsible for the payment of duties).

U.S. importers are free to buy goods from any U.S. suppliers and can choose to import from any country that does not engage in dumping or subsidization. However, when they choose to import from countries that do engage in dumping or subsidization, it is their obligation to pay the statutorily required duties on those products.

Trade law enforcement does not expose importers to unfair liability – it simply ensures that importers are held responsible for the proper duties owed. The U.S. system is fair and accurate. The trade law enforcement provisions in the Senate Finance Committee customs bill do not alter that reality in any way, and should be adopted by the House of Representatives and enacted into law.


 

[1] See April 23, 2015, letter from Retail Industry Leaders Association (RILA), National Retail Federation (NRF), International Wood Products Association (IWPA), The Home Depot, Target, and Walmart.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s