“Sunset” Investigations Before the U.S. International Trade Commission Andrea C. Casson Office 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 Commissioners The 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 (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  Contains ITC’s Procedural Requirements and Timeframes for Five-Year Reviews

Legal Standard for Reviews  U.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 industry if 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 AND  Likely competition among imports AND  Likely competition with domestic like product  Prohibited if—  No discernable adverse impact

Notice of Initiation  Published in Federal Register  Before 5 year anniversary of order  Requests statement from interested parties  Willingness to participate in review  Likely effects of revocation  Other 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 conducted  Full briefing by parties  Decision issued within 360 days after initiation  May be appealed to Court of International Trade and then to U.S. Court of Appeals

Transition Orders The first round of reviews began in 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 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.