Trade Remedies: A Primer

Publication Date: July 2008

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Trade

Type:

Abstract:

The United States and many of its trading partners use laws known as trade remedies to mitigate the adverse impact of various trade practices on domestic industries and workers.

U.S. antidumping laws (19 U.S.C. 1673 et seq.) authorize the imposition of duties if (1) the International Trade Administration (ITA) of the Department of Commerce determines that foreign merchandise is being, or likely to be sold in the United States at less than fair value, and (2) the U.S. International Trade Commission (ITC) determines that an industry in the United States is materially injured or threatened with material injury, or that the establishment of an industry is materially retarded, due to imports of that merchandise. A similar statute (19 U.S.C. 1671 et seq.) authorizes the imposition of countervailing duties if the ITA finds that the government of a country or any public entity has provided a subsidy on the manufacture, production, or export of the merchandise, and the ITC determines injury. U.S. safeguard laws (19 U.S.C. 2251 et seq.) authorize the President to provide import relief from injurious surges of imports resulting from fairly competitive trade from all countries. Other safeguard laws authorize relief for import surges from communist countries (19 U.S.C. 2436) and from China (19 U.S.C. 2451). In each case, the ITC conducts an investigation, forwards recommendations to the President, and the President may act on the recommendation, modify it, or do nothing.

WTO dispute settlement panels and Appellate Body rulings found that the United States is in violation of its WTO obligations with regard to two U.S. trade remedy laws -- the Continued Dumping and Subsidy Offset (CDSOA, also known as the Byrd Amendment) and the Antidumping Act of 1916, which was subsequently repealed in P.L. 108-429. In the 109th Congress, S. 1932 (signed by the President on February 8, 2006, P.L. 109-171) repealed the CDSOA while allowing disbursements under the act to continue for merchandise entering the United States before October 1, 2007. Other trade remedy-related legislation, including H.R. 3283 (English, passed House July 27, 2005), S. 1421 (Collins), and H.R. 3306 (Rangel) seek to modify AD and CVD provisions in order to target alleged circumvention of trade remedy duties, particularly on subject imports from China. Other bills containing similar provisions include S. 593 (Collins) and its companion bill H.R. 1216 (English). Section 3 of H.R. 1493 (Tim Ryan), defines manipulation of foreign exchange rates as a countervailable subsidy. H.R. 4217 (Knollenberg) seeks to allow U.S. manufacturers to participate in AD and CVD investigations as interested parties. H.R. 5529 (English), seeks to make modifications to safeguard laws, as well as amending AD and CVD legislation.

This report explains, first, U.S. antidumping and countervailing duty statutes and investigations. Second, it describes safeguard statutes and investigative procedures. Third, it briefly presents trade-remedy related legislation in the 109th Congress. The appendix provides a chart outlining U.S. trade remedy statutes, major actors, and the effects of these laws.