“Sunset” Investigations Before the U.S. International Trade Commission

Andrea C. CassonOffice of General Counsel, USITC

June 2, 2005

Background about USITC

History of Agency– Established in 1916 as the U.S. Tariff

Commission.– Created as a factfinding and advisory body

rather than a policymaking body.– Renamed the U.S. International Trade

Commission in 1974 – The ITC is located in Washington, DC, with a

staff of about 370 employees and an annual budget of $50 + million.

– ITC staff includes a wide range of experts, including economists, commodity industry analysts, investigators, and attorneys

USITC Background, continued

USITC Mission is two-fold• To administer U.S. trade remedy laws in a

fair and objective manner

• To provide trade policymakers with independent, quality advice and information on matters of international trade and competitiveness.

USITC background, continued

USITC is headed by six CommissionersThe Commissioners are appointed by the President and confirmed by the U.S. Senate.Commissioners serve 9-year terms that are set by statute. The Chairman and the Vice Chairman are appointed by the President to serve two-year terms in those positions.The incoming Chairman cannot be of the same political party as the previous Chairman, and the Chairman and Vice Chairman cannot be of the same political party.

Sunset Reviews:Relevant Statutory Provisions

Section 751(c) of the Tariff Act of 1930 (19 U.S.C. 1675 (c))

Procedural five-year review provisions for DOC and ITC

Section 751(d) of the Tariff Act of 1930 (19 U.S.C. 1675(d))

Legal standard for reviews

Section 752 of the Tariff Act of 1930 (19 U.S.C. 1675a)

Details substantive standards for ITC review

Relevant Regulations

19 Code of Federal Regulations, Subpart F 19 C.F.R. 207.60-207.69 Contains ITC’s Procedural Requirements and

Timeframes for Five-Year Reviews

Legal Standard for ReviewsU.S. law requires five-year reviews of

Antidumping duty orders Countervailing duty orders Suspension Agreements

Order or Agreement under review will be revoked unless Commerce determines that dumping or countervailable subsidy will be likely to continue AND ITC determines that material injury will be likely to continue or recur

Likelihood of Continuation or Recurrence of Injury

Commission considers Likely Volume

Absolute, or Relative to U.S. production or

consumption Likely Price Effects Likely Impact

of the subject imports on the industryif the order is revoked.

Other factors taken into account

The prior injury determination

Any improvement related to the order

Vulnerability of the industry

In antidumping proceedings, Commerce’s duty absorption findings.

Volume Considerations

Would likely volume be significant? Relevant Economic Factors

Likely increase in foreign production capacity Likely increase in foreign unused capacity Existing inventories of subject merchandise Likely increases in existing inventories Barriers to importation in other countries Potential for product-shifting

Price Considerations

Likelihood of significant price underselling

Likelihood of significant price suppression or depression

Likely Impact

Mandatory consideration of all relevant economic factors, including Output, sales, market share Profits and other financial factors Utilization of capacity Employment, wages, productivity Development and production efforts

Optional consideration of Magnitude of dumping margin Magnitude of countervailable subsidy

Cumulation

Permissible if—Reviews were initiated the same day ANDLikely competition among imports ANDLikely competition with domestic like

product

Prohibited if— No discernable adverse impact

Notice of Initiation

Published in Federal RegisterBefore 5 year anniversary of orderRequests statement from interested

partiesWillingness to participate in reviewLikely effects of revocationOther information and industry data

requested by the ITC

Full Reviews

New facts collected Questionnaires sent to foreign producers and

U.S. producers, importers & purchasers

Hearing conductedFull briefing by partiesDecision issued within 360 days after

initiationMay be appealed to Court of International

Trade and then to U.S. Court of Appeals

Transition Orders

• The first round of reviews began in 1998.• The initial reviews concerned “transition

orders,” that is orders that were in place in 1994 when the statute was amended.

• The first set of reviews of transition orders ended in February 2001.

• Commission conducted 68 grouped reviews of 233 orders.

• In addition, during 2000 and 2001, the Commission conducted sunset reviews of orders that were issued in 1995 and 1996.

Second Round of Reviews

Commission has continued to conduct reviews of orders that were put in place after the passage of the URAA, on their five-year anniversaries.

Starting in 2004, the Commission began the second round of five-year reviews of the transition orders that were kept in place after the first round of five-year reviews.