Recent Experience of the United States International Trade Commission: Caseload trends and the effects of the economic downturn Shara L. Aranoff Chairman U.S. International Trade Commission 2009 Seoul International Forum on Trade Remedies Korea Trade Commission July 3, 2009

Disclaimer The comments I’m making today are my own. They should not be construed as representing the views of the USITC or the United States Government. 2

Investigative functions of the ITC Conduct import injury investigations in antidumping, countervailing duty and safeguards cases (Dept. of Commerce determines dumping margin) Oversee the Section 337 process regarding intellectual property rights Conduct studies on trade issues 3

Largest U.S. trading partners, 2008 (value of two-way trade in goods) Canada$ 596 billion China$ 409 Mexico$ 368 Japan$ 206 Germany$ 151 United Kingdom$ 112 Korea$ 81 4

Countries against which the United States has the most AD/CVD orders China90 India22 Japan20 Korea20 Taiwan16 Italy/Brazil14 5

A small share of U.S. imports is under AD/CVD orders 6

A small share of Chinese imports is under AD/CVD orders 7

Countries imposing the most AD/CVD orders against U.S. exports China16 Mexico13 India12 Brazil 7 Canada 5 EU/So. Africa 4 8

Worldwide AD Orders (as of 12/31/08) Antidumping PetitionerAntidumping Subject USA249China329 India178Korea 85 European Union128Taiwan 74 Turkey 107Japan 64 China 98USA 68 Korea (11th) 33India 54 9

Worldwide CVD Orders (as of 12/31/08) CVD PetitionerCVD Subject USA 37India20 European Union16China 11 Canada10Brazil 4 South Africa 3Indonesia 4 Mexico 2Korea 4 Korea 0Italy 3 10

U.S. sectors with the most AD/CVD orders in place (as of 6/15/09) Iron and steel141 Chemicals 51 Miscellaneous manufactures 45 Agricultural products 29 Non-ferrous minerals and metals 27 11

AD/CVD case filings,

Current AD/CVD caseload (as of June 15, 2009) Preliminary phase investigations 6 Final phase investigations 6 Full sunset reviews11 Safeguard investigations 1 Total active investigations24 13

U.S. AD/CVD investigations and orders involving Korean firms Final phase investigations 1 Full sunset reviews 1 Orders involving steel products15 Total orders (on 16 products)20 14

U.S. AD/CVD comparison: Korea vs. China Korea: 2 active investigations; 20 orders in place China: 12 active investigations; 90 orders in place 15

Appeals and dispute settlements of USITC AD/CVD determinations First appeal is to the Court of International Trade in New York (roughly 40 percent of decisions get appealed to the USCIT) Second level of appeal is to the Court of Appeals for the Federal Circuit in WDC WTO or NAFTA dispute settlement also may be options in some cases 16

Appeals and dispute settlements of USITC AD/CVD determinations 13 appeals pending at the USCIT 5 appeals pending at the Federal Circuit 2 disputes pending before a NAFTA panel No dispute pending before the WTO 17

Intellectual property investigations (section 337) Used to address imports that infringe U.S. patents, copyrights or trademarks Cases are tried by administrative law judges (ALJs); the Commission reviews their determinations About percent of the cases settle prior to the conclusion of litigation 18

About section 337 If a violation is found, the remedy could be: an exclusion order, under which Customs would prevent the import of infringing goods; and/or a cease and desist order, which would prevent named respondents from selling inventories of infringing goods, etc. 19

About section 337 The Commission intends to finish all Sec. 337 investigations within months Usage of the Sec. 337 process has been rising The ongoing increase in workload may make the short timeframe infeasible Sec. 337 process requires more resources 20

Number of new Sec. 337 cases, and those involving Korea Fiscal YearTotalKorea

Sec. 337 activity involving Korea 13 investigations of products from Korea, all involving allegations of patent infringement 3 investigations in which Korea is the complainant (1 by LG Electronics, 2 by Samsung) Korea is the most active foreign user of sec Samsung has been, and continues to be, a respondent in some patent infringement cases, and a complainant in others. 22

Litigation involving Sec. 337 determinations 2005: 15 appeals pending 2006: 9 appeals pending 2007: 34 appeals pending 2008: 21 appeals pending 23

Economic downturn, patent filings, and patent litigation Data from the Patent and Trademark Office show that original utility patent application filings have slowed in FY2009. Yet patent infringement cases at the ITC are at an all time high, 43 new cases filed in Intellectual property is one of the most important categories of assets held by many firms. 24

Industry and economic investigations at the USITC Analysis of trade and competitiveness issues, including section 332 reports Independent research on various issues (e.g., enhanced economic modeling) Analysis of probable economic effects of proposed trade agreements Currently 15 active investigations 25

Report on Korea-U.S. FTA Assess economy-wide and sectoral effects of the FTA Delivered on Sept. 20, 2007 Use a variety of analytical methods, including general and partial equilibrium models 26

Report on Korea-U.S. FTA Report released to the public in September of 2007 The key finding was that both the United States and Korea would experience modest but overall positive economic effects from a bilateral FTA. The empirical analysis captured only the barriers that could be easily measured (e.g., tariffs, tariff rate quotas) but did not include trade barriers in services and other nontariff barriers such as regulatory measures. 27

Historically, world trade volumes and incomes have grown together Growth rate of volume of world merchandise exports and gross domestic product,

But recent trade volumes have plummeted Quarterly world export developments since 2005 (2005Q1=100, in current US dollars) 29

World trade plunged by two-thirds over

Recent trends in international trade  Dramatic drop in world trade, and WTO forecasts at least a 10 percent decline in global export volumes for 2009  GDP contractions have been minor compared to trade  5 or 6 percent in some countries compared to 30 percent for trade contractions.  Trade contraction due to decrease in demand and to a lesser extent credit crunch  These effects dwarf any from trade remedies  But still not comparable to experience in the early 1930s 31

Decomposing Chinese Electronics Exports to the US value increased from $22 bil to $78 bil between ’02 and ’06 or from 31% to 39% of total US imports - potentially substantial indirect effects on Korea Elect. Machinery Telecom Computers Comp. Periperal Elect. Elements and devices TVs, etc Other comm. Equip. Instruments

USITC Resources  Extensive resources are available on the USITC website:  The USITC’s Interactive Tariff and Trade Data web ( provides international trade statistics and U.S. tariff data to the public full-time and free of charge.  The USITC Website also includes case files and statistics for trade remedy proceedings and extensive economic and industry research materials. 33

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