Observations on Trade Remedies at the USITC Daniel R. Pearson Chairman U.S. International Trade Commission 2007 Seoul International Forum on Trade Remedies Korea Trade Commission June 27, 2007

Disclaimer The comments I’m making today are my own They should not be construed as representing the views of the USITC

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

Largest U.S. trading partners, 2006 (value of two-way trade in goods) Canada$ 573 billion China$ 343 Mexico$ 334 Japan$ 206 Germany$ 130 United Kingdom$ 97 Korea$ 77

Countries against which the United States has the most AD/CVD orders China63 Japan21 India21 Korea20 Taiwan15 Italy14

Countries imposing the most AD/CVD orders against U.S. exports China17 Mexico13 India12 Canada 5 Brazil 4 Korea 2

Worldwide AD Orders (1/1/07) Antidumping PetitionerAntidumping Target USA256China325 India159Korea 95 European Union132Japan 69 Turkey 95USA 65 China 89Taiwan 60 Korea (14th) 26India 57

Worldwide CVD Orders (1/1/07) CVD PetitionerCVD Target USA 44India19 European Union12Korea 7 Canada 6European Union 6 South Africa 3Brazil 6 Mexico 2China 5 Korea 0Indonesia 4

U.S. sectors with the most AD/CVD orders in place Iron and steel136 Chemicals 40 Miscellaneous manufactures 33 Agricultural products 30 Non-ferrous minerals and metals 26

AD/CVD case filings,

Current AD/CVD caseload (as of June 7, 2007) Preliminary phase investigations 4 Final phase investigations12 Full sunset reviews45 Expedited sunset reviews 3 Total active investigations64

U.S. AD/CVD investigations and orders involving Korean firms Final phase investigations 2 Full sunset reviews 1 Orders involving steel products12 Total orders (on 16 products)20

U.S. AD/CVD comparison: Korea vs. China Korea: 3 investigations20 orders China: 8 investigations63 orders

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

Appeals and dispute settlements of USITC AD/CVD determinations 32 appeals pending at the USCIT 2 appeals pending at the Federal Circuit 2 disputes pending before a NAFTA panel 4 disputes pending before the WTO

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 Approx percent of the cases settle prior to the conclusion of litigation

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.

Sec. 337 (continued) 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

Sec. 337 institutions Fiscal YearTotalKorea

Sec. 337 activity involving Korea (as of June 7, 2007) 9 investigations of products from Korea, all involving allegations of patent infringement 3 deal with wireless communication devices or their components (including the recentBroadcom patent case involving Samsung and LG Electronics)

Litigation involving Sec. 337 determinations FY 2000: 6 appeals pending at the Federal Circuit FY 2005: 18 appeals pending FY 2006: 15 appeals pending

Industry and economic investigations at the USITC Analysis of trade and competitiveness issues, including Section 332 reports Independent research on various issues (enhanced economic modeling, etc.) Analysis of probable economic effects of proposed trade agreements

Industry and economic investigations at the USITC Currently 28 active investigations Reports now are in progress to evaluate two free-trade agreements: Korea and Panama

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

Report on Korea-U.S. FTA Public hearing held on June 20, 2007 Testimony from a variety of parties, including Korean Ambassador Lee Tae-sik, trade associations and interested industries What did we learn at the hearing?

Conclusion AD/CVD filings have trended downward. What will cause them to increase? Intellectual property cases have been rising. Have they reached a peak? The study on the Korea-U.S. FTA should help to inform the policy debate regarding this agreement.