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May 1, 2002

Ms. Gloria Blue
Executive Secretary
Trade Policy Staff Committee

Dear Ms. Blue:
These comments are submitted on behalf of the Consuming Industries Trade Action Coalition ("CITAC") to further discussion about the appropriate issues of interest to the United States in connection with trade remedies. CITAC believes that trade remedies heretofore have been treated by several administrations as "out of bounds" for domestic political discourse. The notice soliciting comments on the "rules" portion of the Doha Ministerial, which includes antidumping, subsidies and countervailing measures, and safeguards unfortunately reflects this attitude. The United States finds itself decidedly on the defensive on these issues, in part because of the assumption that discussion of these issues is unacceptable domestically. CITAC hopes to be an instrument of constructive change by contributing to an open debate on these issues. As a matter of our own national interest, the U.S. must take a more balanced, constructive and open-minded approach in discussing trade remedies.

United States interests require discussion of the adverse consequences of antidumping, countervailing duty and safeguards remedies. All of these measures tend to stop or reduce trade. United States businesses that rely on trade to be competitive, including CITAC members, are materially harmed by these restrictions. CITAC believes that the WTO rules on trade remedies and the national laws implementing them, must first be in harmony (they are not at present) and must second serve the U.S. interest.

Antidumping measures tend to work against the interests of exporters, including U.S. exporters. With increasing frequency, U.S. exporters are the targets of foreign anti-dumping actions that stifle trade. In the most recent WTO semiannual compilation, U.S. exporters were among the most often targeted group. In addition, and of equal or greater importance, U.S. companies that rely on imports to be globally competitive are prejudiced by trade remedy cases, including antidumping, countervailing duties and safeguards.

I. Procedural Reforms to Trade Remedy Proceedings (Antidumping, Countervailing Duty, Safeguards)
CITAC proposes four procedural reforms as a start toward balancing the interest of affected American constituencies in trade remedy cases.

(1) Consumer Standing
Downstream purchasers of products subject to trade remedy actions must be accorded equal standing with domestic and foreign producers of these products. This is not only a matter of fundamental fairness to affected constituencies; it also bears directly on the claim for "deference" to national authorities in decisions they make. Article 17.6 of the Antidumping Agreement provides for a certain kind of deference, but not "Chevron" deference.
Some domestic groups and their congressional supporters argue for a broader deference to the decisions of national authorities than has been found in the WTO Antidumping Agreement. However, broader deference must necessarily include a reasonable basis to believe that the interests of supporters and opponents of antidumping duties in a case will be treated equally. It is unreasonable to expect broader deference if national authorities are perceived as advocates for those seeking trade restrictions. Consuming industry standing, therefore, is entirely consistent with the interest of those seeking a broader deference to national authorities so that fewer decisions will be decided in WTO dispute settlement cases.

(2) Temporary Exceptions to Duties ("Short Supply")
This concept, also sometimes referred to as "short supply," is one of CITAC's longest-standing ideas. It is simple and equitable-trade restrictions should not apply to goods that are not available from domestic sources. The Antidumping and Subsidies Agreements should contain provisions that allow domestic consumers to seek exceptions for short supply reasons. This will lessen the burden of trade remedies on exporters and on domestic consuming industries in the importing country.

(3) Lesser Duty Rule
The Antidumping and Subsidies Agreements currently encourage member states to adopt a lower level of duties than the full antidumping or subsidy margin calculated if the "lesser duty" is sufficient to offset the injury suffered or threatened to the domestic industry. CITAC encourages the Administration to discuss making this rule mandatory. It would improve the administration of antidumping and countervailing duty laws around the world, by balancing the interest of petitioners with domestic consuming industries.

(4) "Public interest" Test
CITAC favors international discussion of including a limited public interest component in antidumping and countervailing duty proceedings, as is currently incorporated in U.S. safeguards law. National authorities should consider whether imposing duties in certain cases would undermine the national economic interest. We do not advocate a "51-49" test in determining public interest. However, where the costs and benefits of imposing punitive import duties are clearly and substantially out of balance, national authorities should be able to prevent real damage to the economy and the world trading system.

II. The Causes of Dumping and Subsidies

The Notice seeking comments requested discussion of the causes of dumping and countervailing duty proceedings, in keeping with the U.S. position that the legitimacy of dumping and countervailing duties should not be questioned. However, it is important to debate the appropriate definition of "dumping." In particular, CITAC urges the Administration to consider whether there should be a distinction in terms of remedies and or procedures between selling at a profit in a foreign market ("technical dumping") and selling at levels below cost of production with the intent of damaging or destroying competition. CITAC urges consideration of differential treatment for "technical" dumping in the Doha Development agenda.
The solution to the disruption to international trade (and international negotiations) caused by trade remedies is to discuss rationally the different policies inherent in these actions. Only if this is done can the Doha Development Agenda have the best chance of success. And success is in the interest of all Americans.

Respectfully submitted,

Lewis E. Leibowitz
Counsel to CITAC