During a recent trip to China, I learned a lot about trade-remedies procedures in several counteries, including China. That is, procedures China and other countries follow when, e.g., Chinese domestic industries file petitions seeking protection from unfairly traded imports from around the world. Recent headlines have declared both that China is getting ready for a trade war, and that China is ready to bury the hatchet with the U.S. Among other things, it seems like the headlines have never been misleading -- declaring trade "wars" between China and the U.S. -- at least from the Chinese perspective.
The term "war" really doesn't enter the U.S. psyche when it comes to trade with anyone. In the U.S., whenever a U.S. domestic industry files a petition for an antidumping or countervailing duty investigation, by law, the U.S. Department of Commerce (USDOC) and the U.S. International Trade Commission (USITC) must initiate investigations -- they have no discretion. Although U.S. domestic industries truly find a sympathetic friend at USDOC, trade-remedies actions in the U.S. are entirely industry-driven. The USDOC does not self-initiate investigations, despite having statutory authorization to do so. So, in the U.S. we see our AD/CVD investigations as not politically motivated, and thus, no "war" to speak of between countries. In other countries, however, there is a strong -- even if unstated or unofficial -- political component to initiating unfair trade investigations. Indeed, governments from various jurisdictions around the world put the brakes on filings by domestic industry representatives in the name of maintaining good relations with trading partners. One way countries can avoid initiating an investigation -- if initiation is required by domestic law whenever a petition is filed -- is not to stamp the petition as "received" when it is filed. Crazy as that may sound to people in the U.S. or E.U., it happens. And if a petition is never officially "received," then no investigation is required. So what will happen when Trump takes office and increases the heat on China and other countries? I expect that -- to the extent they have a stack of petitions waiting for the "received" stamp -- China and other countries will begin stamping "RECEIVED" on petitions as fast as the administering authorities can handle new investigations. Trump has stated that he will engage in several controversial trade actions -- including a 45% import duty on any imports from China. While many, if not all, of what Trump has claimed he will do, is inconsistent with the WTO obligations of the United States, Trump can do what he has claimed. There are consequences, however, including WTO-sanctioned retaliation. But Trump can isolate the U.S. from global trade. What the Trump administration must understand, however, is a backlash around the world is poised and ready in the form of AD/CVD investigations that will treat the U.S. as fairly as the U.S. treats other countries. As far as China goes, the reciprocal "fairness" will result for U.S. industries in the same market access as Chinese exporters have in the U.S.: severely restricted, if any access at all.
0 Comments
Your comment will be posted after it is approved.
Leave a Reply. |
Mark LehnardtFormer U.S. Department of Commerce attorney commenting developments in U.S. antidumping and countervailing duty law. Archives
January 2017
Categories |