Contributor Article by Daniel B. Pickard
U.S. manufacturers who have been harmed by low-priced imports can obtain meaningful relief under several trade remedy laws. The first article in this series covered the U.S. antidumping law, in effect investigations of low priced imports that are engaged in international price discrimination. The second article provided an overview of countervailing duty investigations, which give relief to U.S. manufacturers and their workers who have been injured by unfairly subsidized imports. This third article covers “Section 201” investigations (also known as “Safeguard” cases) which are one of the strongest trade remedy actions available under U.S. law. This provision of the Trade Act of 1974 authorizes the U.S. International Trade Commission (“ITC”) to examine whether a particular import is causing or threatening to cause serious injury to a domestic industry.
The U.S. International Trade Commission and the Injury Standard
The federal agency responsible for conducting Section 201 safeguard investigations is the ITC, an independent federal agency with quasi-judicial authority. The ITC is charged with determining whether “an article is being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industry producing an article like or directly competitive with the imported article.” A substantial cause is defined as “a cause which is important and not less than any other cause. Both the injury and causal standards are higher in a Section 201 investigation as compared to an anti-dumping or countervailing duty case. However, the remedy provided in Section 201 can be much broader – covering imports potentially from every country in the world – and more meaningful than in an antidumping/countervailing duty case. Additionally, Section 201 does not require a finding of an unfair trade practice, as do the antidumping and countervailing duty laws.
If the ITC makes an affirmative injury determination under Section 201, the investigation proceeds to a remedy phase. During the remedy phase, ITC recommends specific actions to address the serious injury to the domestic industry. The ITC generally must make its injury finding within 120 days (150 days in more complicated cases) of the initiation of the Section 201 investigation and must transmit its report to the President, together with any relief recommendations, within 180 days after initiation.
Relief Under a Section 201 Investigation
Once the ITC issues its recommendations, the President has sixty days to “take all appropriate and feasible action. . . [to] facilitate efforts by the domestic industry to make a positive adjustment to import competition and provide greater economic and social benefits than costs. Some actions that the President may authorize include increasing or imposing duties, imposing a tariff-rate quota, modifying or imposing quantitative restrictions, implementing adjustment measures, withdrawing or modifying concessions provided to U.S. trading partners, and commencing negotiations with foreign governments to limit exports into the United States.
If import relief is provided, the ITC periodically reports on developments within the industry during the period of relief. Upon request, the ITC advises the President of the probable economic effect on the industry of the reduction, modification, or termination of the relief in effect. At the conclusion of any relief period, the ITC is required to report to the President and Congress on the effectiveness of the relief action in facilitating the positive adjustment of the domestic industry to import competition.
For more information regarding the U.S. trade remedy laws, please contact Daniel B. Pickard, a partner in the International Trade practice of Wiley Rein LLP, in Washington DC. He can be reached at 202.719.7285 or via email at [email protected].