China-U.S. Trade Law : International Trade Lawyer & Attorney : Baker Hostetler Law Firm : Trade Remedies, Customs & Export Controls

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Trade laws, designed to combat market distortions caused by unfair trade practices, often create distortions of their own. They lead to tariffs and other restrictions that often induce manufacturers and exporters to change their markets as much as their conduct, shifting production to a country not subject to the trade remedy, or selling to other customers in other countries. Such changes can create extreme distortions for consumers, depriving them of goods they may crave. They may punish manufacturers and exporters, but may do little, in the end, to protect petitioners.

Fish and seafood tell this story well, and now are part of a particularly disturbing development. The United States Environmental Protection Agency (“EPA”), the United States Food and Drug Administration (“FDA”), and the National Oceanic and Atmospheric Administration (“NOAA”) all desperately want Americans to believe that the bounty of the Gulf of Mexico is safe for consumption, notwithstanding probable widespread contamination from the toxic dispersants that have driven oil out of sight, but not out of mind.

Gulf shrimpers, in particular, are well aware of the problem. Testifying before the House of Representatives Natural Resources Subcommittee on Insular Affairs in June, John Williams, Executive Director of the Southern Shrimp Alliance, insisted that “U.S. shrimp currently being landed and sold in the marketplace is safe, wholesome and healthy,” but then reported of his unanswered letters to EPA and to NOAA, sent more than a month earlier, “voicing strong concerns regarding the impact of the chemical dispersants used by BP on marine life.” While insisting that, “Assuring the public of the safety of seafood landed in the Gulf is essential to our industry,” he volunteered that “the toxins in the dispersants were likely to have direct adverse impacts on both vertebrate and invertebrate marine life and, further, that the dispersal of oil throughout the water column would increase, rather than mitigate, the harmful environmental effects of the oil spill on marine life.” He forecast an impact “over a long period of time.”

Williams and his Alliance brought the 2002 trade case that put the brakes on imports of shrimp from China, Vietnam, India, Thailand and Brazil. Now, acknowledging risks to the future of shrimping in the Gulf caused by the BP oil spill and, even more dramatically, the government-authorized use of toxic dispersants, he also admits that, despite the successful trade action, the Gulf industry continued in steep decline, down from 200,000 shrimping days in 2002 to 63,000 in 2008. The trade laws may have slowed the decline, but the oil spill will accelerate it.

Now that the leaking oil well has been capped, the Obama Administration, and the Obama family, have endorsed Gulf seafood as safe. The Gulf fishermen and shrimpers, however, are not so sure. As reported in the Washington Post, they fear that the Government has not tested adequately, and that the products of the Gulf may not be safe.

There are in these developments opportunities for foreign producers, both in meeting requirements in the trade laws, and in reaching out to cooperate with their U.S. antagonists. Together they might be able to supply Americans with a healthy product in abundance. Despite the core American belief in the virtues of competition, in this case competition probably would have everyone suffer.

Fixing Cataclysms The American Way

When BP’s Deepwater Horizon platform blew up and sank, the constant appearance of belching oil was ubiquitous in the American media. The crisis response took the form of trying to destroy the offender, in this case the oil itself, dumping millions of gallons of toxic dispersants into the Gulf of Mexico, breaking up the oil while poisoning the food chain. The “solution” was worse than the problem, but it created a promising appearance as the oil went below the surface, a relief to both those discouraged by the spectacle and the company whose visible daily association with the cataclysm through the pictures of the belching oil could only sully further its reputation.

John Williams understood the problem well in his congressional testimony. Noting the EPA and NOAA assertions that the decision to use toxic dispersants in the Gulf involved a “trade-off” that conceded a toxic risk, he concluded that “marine life was sacrificed as a trade-off for preventing oil from floating to the surface and creating even more of a public relations nightmare.” “The shrimp fishery, along with the oyster, crab, bluefin tuna, and other important commercial fisheries in the Gulf,” he said, “are what was ‘traded-off’ in the decision to allow the unprecedented use of these toxic chemicals.” At the time when he was speaking, only a small fraction of the dispersants to be used had yet entered the Gulf’s food chain.

The Impact Of Fixing The Problem: In The Gulf

Oil, being black, is very visible, especially as it washes up on sand. But Corexit, a toxic brew of chemicals relied upon by BP in the millions of gallons to disperse the oil and make it less visible, is itself invisible. It does not eat or destroy or eliminate the oil. It does what its nomenclature suggests – it disperses, and thereby puts out of sight in BP’s hope to put the oil out of mind.

Corexit does not attach to the oil and travel only where the oil goes. Instead, it flows where water flows, or where the tides and waves and storms may take it. Being invisible, it cannot be tracked and traced. It also sinks, so its smell and taste are not obvious on the water’s surface. More likely than not, it has been spreading all over (or under) the Gulf of Mexico.

Fish and seafood live and breathe water. It flows inevitably within and through them. EPA, NOAA, and the FDA all admit that they have never tested the consequences of an intensive distribution of Corexit. They have no idea what it does to seafood and fish, and especially whether the seafood and fish can absorb it and pass it along to humans. Nor have they any idea what quantities humans might be able to ingest without consequence were they to be absorbing it from the consumption of fish and seafood. As Williams correctly observed, “the decision had little to do with science and more to do with limiting the visual impact of the oil spill by keeping oil in the Gulf out of the viewfinders of television cameras.”

EPA, NOAA, and FDA do know that workers involved in the Gulf cleanup have been suffering various ailments and reactions possibly caused by oil but more likely by contact with the toxic dispersants. This contact has been direct, in the water. Williams reported to Congress, “For those shrimpers that have participated in the cleanup process, the reports of health problems related to those efforts are extremely disconcerting. These fishermen report that their concerns have either been ignored or ridiculed.” Possibly the filtration systems of fish and seafood remove such destructive human effects. Unfortunately, none of the relevant federal agencies has any idea.

Millions of gallons of toxic dispersants were poured into the Gulf of Mexico. In the most favorable and charitable scenario, this poisoning of the Gulf did not poison the food chain because seafood and fish either pass the dispersant without residue remaining within them, or their filtration systems somehow clean it up. Much more likely, however, there is now at least a little poison throughout the Gulf’s food chain.

The Impact Of Fixing The Problem: International Trade And The Salmon Lesson

In a distressing irony, Gulf fishermen in early 2005 succeeded in having antidumping duties imposed on frozen warm water shrimp from Brazil, China, India, Thailand, and Vietnam. Many of the Gulf shrimpers are of Vietnamese origin, continuing professions they learned in their native land, and deploying the trade laws to contest imports originating from “home.” Their successful petitions raised the price on shrimp in the United States, and reduced the volume of imports. The American appetite for shrimp became more dependent on American product, even as the American product fell into decline and now may be broadly contaminated.

The trade laws have had such effects on the food chain from the sea before. Fresh salmon, once a delicacy, became one of the most widely-consumed dinner staples in the United States through aggressive Norwegian marketing in the 1980s, but after trade remedy action initiated by fishermen in Maine against Atlantic salmon from Norway produced a 26 percent tariff in 1991, Norwegian sales of fresh whole salmon in the U.S. collapsed. The major Norwegian producers then did what producers of portable industries often do: they moved offshore.

The Norwegian producers introduced Atlantic salmon smolts to Chile, promoting a whole new industry of farm-raised “Atlantic” salmon in the Pacific Ocean. By 2006, 65 percent of the farmed salmon sold in the United States came from Chile, with most of the rest from Canada. Norwegian product was gone, and Maine’s product almost gone. Salmon became second only to copper as Chile’s leading export product, having not been exported at all five years earlier, and having not existed in Chile before 1994. Chile aimed in 2006 to increase its exports of salmon by 50 percent by 2010. Wal-Mart by 2006 was buying and exporting to the United States about one-third of Chile’s entire salmon harvest. When Wal-Mart learned, however, of problems in Chilean production, it sent a delegation to Chile, examined the problems carefully, and ceased to buy Chilean salmon altogether.

Instead of achieving continued growth, the Chilean production collapsed in 2008, attacked by a virus caused by inadequate environmental standards and controls in the fish farms, and an excessive use of antibiotics banned in the United States. Compared to a sale of 403,000 tons of salmon in 2008, Chile is predicted to sell only 90,000 tons in 2010. None of it will be sold to Wal-Mart.

The Chilean salmon industry’s growth was environmentally unsustainable, while the pressure to grow in a developing country – producing jobs and revenue – had been irresistible. As early as 2005 an OECD condemnation of Chilean fish farming methods and conditions had already made the collapse predictable if not entirely inevitable.

The American appetite for salmon was not turned off by the collapse of Chilean supply. During the years when Norwegian companies were polluting Chilean waters and undoing the very industry they had created in South America, they were cleaning up their act, under government pressure, in Norway while diverting exports from the United States to Europe. Norwegian product, no longer impeded by trade barriers, rushed into the void in the United States being created by the virus in Chile. However, the diversion is leading to higher supermarket prices for Norwegian salmon in Europe, where the European Union, on July 23, 2010, finally repealed antidumping measures it had imposed on Norwegian salmon in January 2006.

The situation of Maine fishermen, in the long run, was not improved by the trade action. The Chilean product replaced the Norwegian product in the U.S. market, in a more attractive preparation for the supermarket shopper (Norwegian salmon had been sold principally as a whole fish) and at a lower price. A decade later the Maine fishermen went after the Chilean salmon with antidumping and countervailing duty petitions, but failed to stop the exports. When the Chilean production collapsed, the Norwegian production, not Maine’s, met the market demand. Whatever trade distortion the Norwegian salmon had been creating in 1991 was overrun by the distortions from Chile, at least as the Maine fishermen would have to see it. And the whole process of overproduction and contamination, driven at first by a trade remedy action, produced much greater consumption of much more doubtful protein.

Global supplies of shrimp had been making a delicacy into a staple rich in protein for the American diet in the twenty-first century much the way farm-raised salmon had been doing at the end of the twentieth. Once a luxury item on restaurant menus, shrimp in many varieties of preparation became available in every kind of restaurant and at ever more accessible prices, much like the evolution of fresh salmon, selling at less than five dollars per pound just before the collapse of the Chilean supply.

Never have Americans had more doubt, and more reason for doubt, about seafood and fish from the Gulf. These doubts arise just as foreign supplies to the United States have been reduced by application of the trade laws, and in behalf of the very shrimpers who now must catch suspect shrimp. Until NOAA and the FDA can test adequately and certify (EPA is not responsible for fish, but is responsible for the water they swim in), there is no way to know whether the Gulf’s shrimp are safe to consume. There is no indication, however, that there is anything wrong with the shrimp the trade laws are helping to keep out of the United States.

The Opportunity For Foreign Shrimp

Strong concerns have been expressed about the safety of foreign shrimp and other seafood and fish. According to the Voice of America, even before the oil spill the United States imported eighty percent of the seafood it consumed. Yet, questions often are expressed, especially about how farm-raised seafood has been fed, whether it has been kept in unpolluted waters. State regulators have been said to have found antibiotics, banned in the U.S., in foreign imports, along with other illegal chemical residues.

Demand for foreign shrimp will and should go up because of the oil spill and, even more, because of the toxic dispersants used to disguise it. That demand will be offset, however, by legitimate safety concerns regarding imports, and by the antidumping orders.

Under WTO rules, the antidumping orders on shrimp are subject in 2010 to sunset reviews, and the U.S. International Trade Commission decided in April to perform “full” reviews of all the orders. In the circumstances of the Gulf spill, shrimp producers in Brazil, India, China, Thailand and Vietnam have an extraordinary opportunity to make their case, dispose of the orders, and return fully to the U.S. market.

Foreign producers ought to clean up their act, literally, as they will have little difficulty profiting from the marketing of a healthy, safe product, even after spending whatever it takes to assure that the product meets American standards. Wherever the antidumping orders are not sunset, were that to happen (and arguments well made in the current circumstances, where injury to the domestic injury is unmistakably from the oil catastrophe, ought to succeed), producers and exporters who have not shipped to the United States ought to seek “new shipper reviews” so that they can enter the market free of the orders. Chinese producers ought to urge their government to take invite American inspectors to confirm their safe and healthy production in China so that their products can be certified.

The Gulf oil spill is an opportunity for foreign shrimp producers excluded by high tariffs to return to the U.S. market, to improve their product and increase their prices. Orders surviving the sunset reviews will be subject to administrative reviews, where foreign exporters will be able to lower or eliminate their dumping margins.

What is true for shrimp is even truer for crawfish tail meat from China (an antidumping order from 1997 was renewed in 2008; the American petitioners are from the Gulf coast). That order was not sunset and will remain until at least 2013, but new shippers ought to find a U.S. market hungry for safe product. It is true, as well, for frozen fish fillets from Vietnam, subject to an antidumping order since 2003, extended in 2009. That order cannot now be sunset before 2014.

The American appetite for seafood and fish from the Gulf of Mexico may not abate, but the safety of the supply may not be secured merely from the reassurances of government agencies that have admitted they do not know the consequences of the actions they have authorized. The opportunity for foreign suppliers to meet the demand need not be interpreted as a ghoulish outcome of the Gulf tragedy, but rather as a shift in global supply chains. As the Norwegians now are profiting from the uncontrolled exuberance of production in Chile, so producers of healthy fish the world over may profit from the tragedy in the Gulf.

Domestic U.S. producers ought to seek partnerships with foreign producers, instead of acting strictly as adversaries. They could step forward as certifying agents for the quality of imported product; they could partner with foreign producers as investors, as importers, and as experts. They could train foreign fishermen in American standards, and invite them to spend time on American boats and in American production facilities. They could make a more convincing case that they are professionals helping to feed Americans a healthy diet.

All these steps would imply enhancing foreign production, but it need not be entirely at the expense of American production. John Williams recognizes the caution needed going forward as to the quality and safety of shrimp in the Gulf because of the toxic dispersants, which would counsel more selective shrimping and fishing to be supplemented by foreign supply, but unless there is supply, demand will eventually decline. The objective must be an improvement in the quality and safety of everyone’s product. Foreign producers should respond to the market demand, recognizing the paramount need for a healthy product, and the American industry should take the lead.
 

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The Current State Of Consumer Product Safety Relations

The United States Consumer Product Safety Commission (“CPSC”) has adopted several measures in 2010 to increase scrutiny of imported goods and impose higher penalties for products that fail U.S. safety standards. The principal impetus for these measures has been suspect imports from China.

Backed by stronger funding and new inter-agency cooperation, the CPSC seeks better protection for American consumers primarily through more vigorous enforcement of U.S. safety laws. As Robin Harvey and Lourdes Perrino observed in a prior article on this blog , since the signing of a Memorandum of Understanding between the CPSC and Customs and Border Protection (“CBP”) in April 2010 (“MOU 2010”), the CPSC has been posting inspectors at U.S. ports to enforce consumer product safety regulations. When goods are detained and rejected at the border, destruction, rather than re-exportation, now becomes the default mechanism for U.S. Customs.

MOU 2010 followed CPSC’s release of a final interpretive rule in March 2010 to address civil penalties in the Consumer Product Safety Improvements Act (“CPSIA”). Under the CPSIA, the maximum penalty for each knowing violation of the statute increases from $8,000 to $100,000, with maximum penalities for any related series of violations increasing from $1,825,000 to $15,000,000. CPSC interprets “violator,” those subject to these penalties, to be “any person,” including sellers, distributors, manufacturers or any legally responsible party who committed a knowing violation of the statute. The CPSC does not have to prove actual knowledge of the violation to make the violation “knowing” and impose penalties: “constructive knowledge” is enough.  (Constructive knowledge is the inference that, by law, some party is aware of the circumstances, if only he were to exercise reasonable care and diligence.)

The changes in penalties for violations of consumer product safety laws arose in a political atmosphere charged with complaints about Chinese products. Although the law will not discriminate among the products of different countries, the overall heightened scrutiny will be felt most by Chinese manufacturers and exporters. It is now altogether possible that Chinese manufacturers, failing to exercise due diligence, could experience bankruptcy in the seizure and destruction of their goods and the assessment of penalties in the millions of dollars. It would not then be surprising were the Chinese Government to complain of protectionism and retaliate, triggering another round of profound misunderstanding in the bilateral trade relationship.

Memoranda Of Misunderstanding: What Might Have Been

MOU 2010 between the CPSC and CBP came some six years after another consumer product safety Memorandum of Understanding (“MOU 2004”), between China and the United States. Had MOU 2004 fulfilled any of its promise, MOU 2010 might not have been necessary. Certainly it might have taken a different form. The emphasis on enforcement has followed a period of failure in promoting promised cooperation. Both MOU have raised reasonable doubt about the meaning of “understanding.”
 

The CPSC and its Chinese counterpart, the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China (“AQSIQ”) signed a Memorandum of Understanding in 2004 that lists the measures both parties could take to ensure the health and safety of consumers. Although these measures do not exclude increased national enforcement, emphasis in the MOU is on cooperation.

MOU 2004 contains a list setting out the scope of the products concerned, and establishes an information exchange mechanism for China and the United States. The MOU pledges to “address safety problems of consumer products through consultation.” Both China and the United States agreed to consider the inspection results obtained by laboratories each one was to authorize and to participate in training laboratory and inspection personnel for each other.

Had MOU 2004 been followed faithfully, the recent dynamics of bilateral consumer product safety issues likely would have been very different. The CPSC and AQSIQ could have made public a common list of recognized laboratories, encouraging manufacturers in both countries to participate in inspection and testing from these domestic laboratories. They could have organized systematic training of laboratory and inspection personnel to address emerging product safety issues. They could have moved toward common standards and expectations for consumer safety.

Conscientious implementation of MOU 2004 should have reduced bilateral mistrust and improved consumer safety in both countries. A Chinese manufacturer with doubts about whether its product would satisfy U.S. consumer product safety standards would have sought assistance from AQSIQ to request the CPSC to send inspectors to conduct on-site inspections and testing in China. MOU 2004 would have made such on-site inspections in China by American personnel at AQSIQ’s expense. The Chinese manufacturer could have shipped products to the United States confidently, without fear of detention, denial or destruction of the goods, and without fear of a harsh financial penalty. (MOU 2004 provides, “4, The participants are to address safety problems of consumer products covered in this MOU which are manufactured in the country of one Participant and sold in the country of another Participant through consultation.”) CPSC, for its part, would have been better positioned to carry out its statutory purpose, preventing substandard products from entering the United States and transferring inspection expense to the Chinese. There would have been less call for inspectors at U.S. ports because more inspections would have taken place, offshore, by CPSC inspectors.

Memoranda Of Misunderstanding: What Happened Instead

Since the signing of MOU 2004, there have been only three CPSC-AQSIQ Safety Summits. At all three, documents were signed containing only vague language expressing the intention to communicate further on product safety issues. These official documents contain no specific methodology to carry out any of the underlying purposes of the MOU.
 

There have been frequent talks between the CPSC and AQSIQ since they entered MOU 2004, but they have led to no improvements in the screening of Chinese goods for U.S. Customs clearance. Instead, both countries have become more defensive about the quality of products and inspection regimes. AQSIQ complains privately that the CPSC does not trust Chinese producers and officials, which means that the confidence-building prescribed in MOU 2004 has failed.

Credit is owed the CPSC, which has tried hard to educate Chinese manufacturers on laws and regulations in the United States through, for example, releasing multiple articles and video clips available in both English and Chinese on its website.  However, how well these messages have been received in China remains in doubt. Chinese invitations for American inspections sometimes follow the eruption of disputes, but Chinese producers have never anticipated (or admitted to) a potential problem that would benefit from a preemptive inspection. There is still no link to the CPSC’s website on AQSIQ’s, and while AQSIQ keeps a record of international communications on its website, MOU 2004 is not available online for Chinese stakeholders to reference.

MOU 2004 was to have internationalized both the CPSC and AQSIQ, making both of them more aware and sensitive to the standards and requirements of other countries. Both agencies are, of course, inherently domestic, concerned for the safety of products as they impact their own domestic populations. However, whereas the CPSC gives great attention to imports, AQSIQ still is perceived in China to be an agency addressing predominantly domestic product safety issues. Not until recently, has AQSIQ been recognized in MOFCOM’s traditional terrain, helping to resolve trade-related disputes.

What Could Yet Happen

Chinese manufacturers need to sell in the U.S. market. Safety issues are becoming an ever more important obstacle. Benefiting from MOU 2004, AQSIQ and Chinese manufacturers could take a more proactive role in protecting their interests and the interests of American consumers. Instead of having goods intercepted in American ports, they could be inviting CPSC inspectors to conduct the same testing in China. As much as AQSIQ might feel a budgetary constraint on shifting such costs away from the United States and onto China, the net savings for Chinese manufactures could be substantial and the manufacturers could be taxed by China to pay the bills for on-site inspections.
 

MOU 2004 does not provide for this cost-shifting, and requests for inspections must come from a participating government agency, not a manufacturer. Provisions of this kind, however, have not been examined or developed since the MOU was signed in 2004, to the lasting detriment of everyone concerned.

The CPSC posts online proposed new regulations and product safety standards at least two months before a final version becomes effective, and invites public comment. On many occasions, the final regulation or standard reflects modifications based on the public comments. AQSIQ could take advantage of this open-window period and communicate with CPSC to work together on reasonable and cost-efficient regulations that would ensure the safety of U.S. consumers while making the regulations feasible for Chinese manufacturers. Such interventions, plainly contemplated by U.S. law and encouraged by intentions of MOU 2004, could move the safety issue in trade relations away from confrontation and toward cooperation.

MOU 2004 was intended to ensure more efficient and secure product safety for consumers in both China and the United States. It is a great misfortune that the outcome of MOU 2004 appears to be MOU 2010, an understanding between U.S. agencies effectively supplanting an understanding between two countries. To benefit both consumers and manufacturers in both countries, private and public sectors must work together, using MOU 2004 as a platform, pursuing not more official documents of little content, but more mutual cooperation, standardization, and reciprocal inspections. The opportunity of MOU 2004 was squandered for six years for lack of imagination and mutual commitment. MOU 2010 should be more of a warning than a conclusion, that failure in enterprises such as MOU 2004 can lead to mutual suspicion and wildly greater cost.

China, in its failure to implement MOU 2004 effectively, must share the blame for MOU 2010. Instead of fighting MOU 2010, however, China could ask the United States to return to the principles of MOU 2004. It might cost China in cash to pay American inspectors, but the payoff in good will and in long-term savings for Chinese manufacturers would easily compensate.
 

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China Is A Target

China has been the primary target of anti-dumping measures around the world for a very long time. More than 30 countries have initiated roughly 600 antidumping cases against 4000 different types of Chinese products during the last two decades. The United States alone has conducted 122 investigations (excluding withdrawals and terminations), and imposed 101 orders against Chinese goods. Approximately 30 percent of all WTO-member anti-dumping investigations have been directed against China.

The Chinese Government and Chinese companies have not consistently cooperated with U.S. authorities or participated fully in investigations. History shows, however, that cooperation and participation matter and that results enabling Chinese merchandise to remain competitive in the U.S. market are always possible.

It Is Possible To Win

For many Chinese companies, the United States is an indispensable market and their very existence depends on retaining access to it. Good legal defenses can be expensive, but not nearly as expensive as having to abandon the market, or sell at non-competitive prices. Failing to participate in antidumping or countervailing duty investigations under the assumption that winning is impossible, either because the American system must be rigged or competent counsel is not affordable, is particularly unfortunate because many companies that do participate fully and with competent counsel can, and often, do prevail.

Historically, Chinese companies have won few antidumping and countervailing duty cases, not because it was impossible to win, but because the Chinese companies were not familiar with the legal and operational procedures of the US antidumping and countervailing duty laws, have hired low cost counsel without the experience or resources to defend them effectively, and failed to cooperate fully with the United States Department of Commerce (“DOC”) or participate at the United States International Trade Commission (“ITC”). These reasons for failure are far more important than anything that might be supposed about the political environment or anti-Chinese prejudice in the United States.

Before petitions seeking investigations of Chinese steel products began being filed in 2007, the largest case against China (by volume of exports) was Bicycles from the People’s Republic of China. Hundreds of millions of dollars of exports and thousands of jobs across China, Hong Kong and Taiwan were at stake. Chinese exporters hired talented lawyers who led them through multiple submissions and verifications, in China, Hong Kong and Taiwan. Millions of dollars were spent in legal fees, but more than 100 million dollars of exports were threatened. Paying for competent counsel paid off. Of the nine exporters found dumping, the highest antidumping margin was only 13.67%. Several companies were not found to be dumping at all. The ITC, applying these margins in the analysis of whether a U.S. industry was materially injured or threatened with material injury by Chinese exports of bicycles to the U.S., found none, leading to dismissal of the case.

It Pays To Pay

Chinese respondents in Ball Bearings from the People’s Republic of China spent nearly a million dollars in legal fees, but the leading company, with a multi-million dollar investment in a state-of-the-art manufacturing facility outside Shanghai, received a zero margin and was free from duties. There is no guarantee, of course, that when a Chinese company spends more money on legal services it will necessarily get better results, but there are market reasons why some lawyers command higher rates than others: their time is in more demand, which means the market for services is recognizing their value. It may seem to a company an important savings to hire lawyers for $50,000 or even $100,000 less than lawyers from firms with greater reputations, but when a $100 million market is at stake, the savings on legal fees suddenly does not amount to that much and do not make sound commercial sense.

There are additional considerations. Chinese companies typically want fixed fees for legal services, no matter what may happen in a case. In some instances, petitioners may not want to spend very much themselves and therefore do not apply a great deal of legal pressure on respondents. However, when the opposite is true and petitioners press their case hard, there is much more legal work necessary on the defense. A budgeted commitment for a questionnaire response and perhaps one supplemental questionnaire could turn into multiple supplemental questionnaires. Legal briefing that might have appeared to be routine could require enhanced legal skills and knowledge of the law.

A company may be confident that its records are kept well, only to learn during an investigation that the company standards will not satisfy DOC. In these instances, counsel may require much more time and effort to prepare the company for the audit DOC officials will conduct (called “verification”), which will be a full inspection of the company’s books.

When the fee is fixed and additional legal services are required because of the circumstances of the case, one of three things can happen. The lawyers can do all that is required for the fixed fee and take a financial loss on the case. The company can agree that it will need to pay more for the additional services. Or, the lawyers, without saying much to the company about it, can simply do less, providing less than optimal services because they effectively are not being paid to do all that is required.

It may be unethical not to do all that is needed when payment may not be forthcoming, but in most instances that is what happens. Chinese companies insist upon the fixed fee and will not pay more; the lawyers cannot afford to do a great deal more. The lawyers then do the minimum necessary to get through the case, and the company suffers without ever being told that the lawyers are doing less than they should be doing.

For all these reasons (and there are many others), it pays to pay: participation and cooperation in the case is always better than refusing or limiting participation. Paying for the best available legal services is always better than trying to get through the case on the cheap, particularly when the cost is compared to what is at stake. It is always better to be flexible about fees because every possible contingency in the case cannot be anticipated in advance, and because there will always be unscrupulous lawyers (as there are unscrupulous businessmen) who will promise more than they can deliver, and will do as little as possible to earn their fees.

The Bigger Picture In Trade Remedy Disputes

Many Chinese businessmen and government officials, in our experience, seem to believe that the antidumping and countervailing duty investigations initiated by the United States (and Europe) are part of a larger, undeclared China-US (or China-West) trade war, and that the U.S. Government is behind the scenes controlling the outcome of the cases to the detriment of Chinese companies. There are undoubted protectionist biases in the trade laws that the U.S. government is required to respect, but trade remedy investigations and reviews are more conflicts between companies in different countries competing for the same market share than they are contests between nations. Americans are not unaware that, should they play unfair at home, their own exports may face unfair practices in China and elsewhere, which is why they subscribe to the WTO and a common rule worldwide.

There is little or no benefit for a company to conjure world trade as a conspiracy, and there is ample contrary evidence that respect for laws and institutions can pay off. Chinese companies would benefit more by participating and cooperating fully, fighting as hard as possible according to the legal rules, hiring competent American counsel and participating fully in all phases of the DOC and ITC investigations, instead of blaming or speculating on political motivations behind poor results.

Summary: Improving The Chinese Prospects Of Winning

How can Chinese companies win antidumping and countervailing duty cases? They first need to hire competent U.S. lawyers with experience and proven track records. The homework necessary to choose counsel is not simple, but again not impossible. They cannot listen to lawyers touting their own credentials without proof. They need to ask questions. Their focus, however, should be on the quality of the lawyers and their services, their reputation and their experience. It should not be only on price. Until recently, many trade remedy petitions were brought against merchandise from other countries. Respondents in other countries have never depended so much on the price of legal services the way Chinese companies have done, and there is a contrast in results that suggests powerfully that it pays to pay.
Second, Chinese companies need to commit to cooperation with the investigating agencies and participation in every phase of the investigations. They need to commit resources and devote themselves to fighting hard to win. They need to consider the potential expense of defending their interests in the U.S. market against the potential value of losing access to the market. They need to think in the medium and long term, for once shut out of the market by an adverse outcome, it could take five years or more (the period awaiting a sunset review of an antidumping or countervailing duty order) to get back in. And they must know that, when their market access is challenged in the U.S., a challenge in Europe likely will follow, and vice versa. The global market means global challenges, and a problem in one place inevitably becomes, sooner or later, a problem in another.

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Robin E. Harvey and Lourdes Perrino

Beginning mid-June, 2010, the Consumer Product Safety Commission (“CPSC”) has been posting inspectors at U.S. ports of entry for the purpose of enforcing product safety statutes and regulations. Before, screening always had been performed by Customs inspectors, who could call in CPSC inspectors when they thought it necessary or appropriate.

Containers are being seized at both air and sea ports, requiring importers and customs brokers to produce general conformity certificates for all products and product testing compliance certificates for products specifically identified under the Consumer Product Safety Improvement Act (“CPSIA”) as requiring specialized testing for lead and phthalate content. So far, reports from the field indicate that seized goods are being released almost immediately after the proper certificates are produced. However, seized products not intended for use by children and not tested in conformity with CPSIA requirements are being detained by the CPSC as alleged non-conforming goods, until inspectors are satisfied that the seized goods should not be considered children’s products. Importers and customs brokers benefit from having on hand documentation to support the position that seized merchandise are not children’s products.

A series of problems with Chinese goods triggered this increased vigilance, leading to the posting of CPSC inspectors directly at ports of entry in the United States. Issues over lead paint in 2007 in toys, compounded by other incidents including problems with tainted pet food, galvanized Congress, which learned quickly that the CPSC was an understaffed and underfunded bureaucracy incapable of policing all the products coming in from China that might be consumed by Americans, especially children and family pets, and might contain toxic levels of ingredients. Congress increased the CPSC budget authorization from $80 million to $136 million by 2014 and ordered it to be more aggressive and more vigilant in protecting American consumers.

The move to police ports directly includes procedures for CPSC independent of Customs and increases penalties for consumer safety violations very substantially. These steps are intended to reassure Americans that the CPSC is serious about consumer protection, particularly as to imported goods. They also communicate to American trade partners, however, that increased vigilance and tougher penalties do not necessarily mean the exclusion of goods. U.S. agencies have been meticulous in establishing the new practice as an act of protection, not protectionism. Properly tested and certified goods remain welcome and free of penalties.

The posting of CPSC inspectors requires close cooperation with Customs and Border Protection (“CBP”), which began April 26, 2010 with a Memorandum of Understanding signed by CBP Commissioner Alan Bersin and CPSC Chairman Inez Tenenbaum. The MOU gave CPSC access to CBP’s Import Safety Commercial Targeting Analysis Center (“CTAC”), enabling CPSC inspectors to identify the nature of incoming products and utilize hand-held XRF (X-ray Fluorescence technology) units to immediately scan for lead content. The agreement also granted the CPSC power to contact importers directly; in the past, the CPSC could contact importers only through the CBP.

The developing collaboration between the CBP and the CPSC is part of a larger effort by U.S. administrative agencies to cooperate in enforcing the mandates of the CPSIA. That cooperation has been aided by the formation of CTAC in 2009, which initially advised President Obama on ways to improve the food safety system in the United States. Other agencies participating in CTAC include the Federal Food and Drug Administration (“FDA”) and the U.S. Department of Agriculture’s Food Safety Inspection Service.

Detention Procedures

Newly empowered, the CPSC has introduced several new procedures at U.S. ports of entry. It is issuing its own Notices of Detention, and expects to change both detention periods and conditional releases within weeks. The new notices will soon contain a description of the alleged violation, its statutory basis, and the contact information for the CPSC inspector who examined the goods.

CBP inspectors will continue to issue their own detention notices, so the same goods likely will become subject to two different notices involving different procedures whenever a reason for detention is product safety. The CPSC has announced that it will send copies of its notices to both importers and customs brokers. Anyone receiving a notice will have five business days to respond with the required certificates (general conformity and/or testing certification) showing compliance with product safety requirements. Extensions may be available on a case by case basis, and in those instances where there is a dispute over whether a product is intended for children, extensions probably will be necessary.

CPSC inspection and detention procedures are not only applicable to CPSIA, but to all statutes enforced by the CPSC, including the Consumer Product Safety Act itself (CPSA), the Federal Hazardous Substances Act (FHSA), the Flammable Fabrics Act (FFA), the Poison Prevention Packaging Act (PPPA), the Refrigerator Safety Act (RSA), the Virginia Graeme Baker Pool and Spa Safety Act, and the Children’s Gasoline Burn Prevention Act. They are all enforceable now by CPSC inspectors at ports of entry.

Penalties & Releases

Some of the changes within CPSC discretionary power include the conditional release of goods and increased monetary penalties. For products determined not to present an immediate threat to public health, the CPSC may issue a conditional release of goods requiring customs bonds during the tentative 30-day detention period in which the CPSC decides whether to release, seize, or deny altogether entry of the goods. Goods released conditionally may not be sold or distributed in the U.S. before a final determination concerning safety has been made.

The CPSC will issue a Notice of Recovery for goods granted conditional release that are determined to be in violation of product safety laws. A Notice of Recovery requires the owner to redeliver the goods to the CPSC or risk liquidated treble damages based on the value of the goods. The CPSIA gives the CPSC authority to add civil penalties when goods contain safety marks that have not been authorized for use on a product by a certified third-party testing facility. The CPSIA increases the maximum penalty for violating CPSC safety standards from $8,000 to $100,000 for each violation and from $1.8 million to $15 million for a related series of such violations.

The CPSC is utilizing its authority in enforcement to seek higher penalties, as the $2.3 million penalty assessed against Mattel in 2009 for lead in paint on children’s toys indicates. It is also examining for any unauthorized use of safety marks, such as an Underwriters Laboratories “UL” or the Canadian Standards Association’s “CSA” affixed to goods sold for use, consumption, or enjoyment in or around a permanent or temporary household or residence, a school, or in recreation. There are exceptions, but the objective is to inspect products destined for individual or personal use or consumption rather than factory or other production. CPSC, thus, is empowered to assure that foreign products destined for personal consumption do not enter the United States pretending to have been certified as safe. Products found to display such safety marks illegitimately are now subject to both CPSC and CBP detention. The CPSC may levy twice the amount of civil penalties, in these circumstances, under its detention order.

Goods not conditionally released are now detained at a CBP bonding facility during the 30-day detention period. Under the new procedure, the CPSC is not required to resolve the detention in 30 days; rather, the 30 day time frame is merely a target. Previously, when the CBP did not make a decision as to whether it would release, seize, or deny entry of goods in 30 days, the goods automatically were deemed excluded from entry and the importer was allowed to protest the result. Under the new procedure, goods are not automatically deemed to be excluded entry on the 30th day. Consequently, the importer cannot protest the detention until the CPSC makes a final determination as to the status of the goods.

Indeterminate detention could lead to constitutional disputes over takings and due process, so the immediate situation surely will not continue for long. The CPSC will have to establish time limits for their inspectors in issuing decisions. The first step toward identifying what the limit on time may be probably will appear on the CPSC website in the form of a Q and A response, ultimately to be followed by CPSC regulations. CPSC, however, will try to develop some experience with its inspectors before it fixes a time limit with a rule.

Whereas CBP historically has encouraged re-exportation of rejected goods, the CPSC’s primary mechanism is destruction rather than exportation. An importer must apply to the Secretary of the Treasury in order to get a special exemption to have the goods exported rather than destroyed. Under the CPSIA, exported non-conforming goods can be sent only to a country seeking them for the purpose of destroying the goods in conformity with hazardous material regulations.

This change in policy, making destruction of the goods the default instead of re-exportation, signals a broader change in U.S. policy. Previously, the United States was willing to reject goods, for whatever reason, but did not aggressively inhibit other countries from receiving them. Now, when the United States decides a foreign product seeking enry is not safe, it acts to protect not only Americans, but people in all other parts of the world. A foreign product found not safe for Americans no longer is to be exported as if it were safe for someone else.

Impact Of CPSC Agents At U.S. Ports

The addition of an agency charged with vigilance at U.S. ports and armed with new powers and penalties may cause concern for foreign exporters and for importers, especially in the handling of Chinese goods because goods from China triggered these developments. Certainly the general move to greater vigilance and penalties was intended to persuade exporters and importers alike to be more vigilant themselves. In addition, despite the increased budget and staffing, the CPSC remains shorthanded for its new tasks. It has been able to deploy only a small number of inspectors at each of the ten largest ports in the U.S.

Importers and exporters might deduce that consumer goods and food will be delayed at major ports. So far, that concern would be misplaced. Early reports from New York’s Kennedy International Airport and the port at Savannah GA indicate that release of detained goods generally has been prompt. The key is to have the proper documentation ready. Inspectors are proving cooperative and responsible. They are not bottling up goods unnecessarily, but they do represent a greater commitment in the United States to protect against unsafe products being imported from other countries.
 

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The Obama Administration has no trade policy and, as institutions have been functioning and trade laws have been interpreted for more than a decade, it can’t. The institutions, laws, and regulations of the United States convey control and formulation of trade policy into private hands. Although the Obama Administration might seek to wrest control of trade policy, it has elected to assign trade no priority. Key political appointments have not been made or have neglected to tap trade expertise; initiatives have not been taken in Congress. The President has followed the law, but has not tried to shape it. He has extolled the virtues of free trade, but he has not tried to achieve it. At most, he has resisted attempts to circumscribe it, as much because of the circumstances as out of any conviction.

Most of the important enterprises in China are state-owned. Although there is much the central government does not control, it commands far more of the Chinese economy than the U.S. government can control of the American economy. China has placed a high priority on trade policy, and pursues its trade objectives vigorously.

Unfortunately, much of Chinese trade policy is reactive, and built on misinterpretations and misunderstandings of the actions of others, especially the United States. Were a full trade war to emerge, it would be more the result of incomprehension than of malice.

The Institutions And Laws Of American Trade Policy

The United States Constitution, Article 1, Section 8, empowers Congress to “collect Taxes, Duties, Imposts and Excises,” and assigns Congress exclusive authority “To regulate Commerce with foreign Nations.” Institutionally, authority over international trade belongs to Congress.

Trade policy is formulated in two congressional subcommittees, in the Ways and Means Committee of the House of Representatives and in the Finance Committee of the Senate. These committees operate as all committees of Congress, brokering competing interests of their members. Their members are there to protect the industries, and the jobs they provide, in their respective states. Although in some instances there may be manufacturers who require inputs from abroad, and in some others constituents may produce for foreign markets, for the most part the members focus on what is produced within their states and for a domestic market. Consequently, these committees are inherently protectionist.

Until implementation of the Sixteenth Amendment to the Constitution in 1916, conferring upon Congress “power to lay and collect taxes on incomes,” the primary source of revenue for the United States was duties on foreign goods. At the same time, Congress created in 1916 the Tariff Commission, which was to reexamine and reorganize the incoherent approach to duties that had been funding the government. Thus, American trade policy was founded constitutionally on the collection of revenues from imports, and U.S. laws into the 1930s promoted the collection of revenues and severe limitations on imports, infamously in the Tariff Act of 1930, known as the Smoot-Hawley Tariff, that many historians consider to have been a significant contributor to global Depression.

Contemporary trade law in the United States largely reflects a reaction against the fallout of Smoot-Hawley, interpreting international agreements that progressively over a sixty year period liberalized trade by reducing tariffs. Not entirely coincidental was the ability of the United States to finance its government operations with an income tax instead of customs duties. Nonetheless, the framework and apparatus of trade liberalization promoted exceptions and special arrangements to satisfy the legislators constitutionally empowered to regulate foreign commerce. Trade remedy laws tightened as tariffs reduced, supporting a common view that foreigners may “cheat” and export to the U.S. dumped and subsidized goods.

There are three principal U.S. agencies dealing with trade policy. The oldest is a cabinet position in the executive branch of government, the Department of Commerce. The task of the Department of Commerce is to implement the laws on trade passed by Congress. Commerce, therefore, theoretically has no authority to formulate or develop trade policy, which is embodied in congressional statutes. But Commerce does write the regulations that elaborate on and implement statutes. It also interprets the statutes and regulations. Through these two powers – writing regulations, interpreting statutes and regulations -- Commerce has more to say about trade policy than any other government agency.

The second is the Office of the United States Trade Representative, which is in the Executive Office of the President. USTR, created initially in 1962, negotiates trade agreements and enforces them, usually but not always through dispute resolution at the World Trade Organization. USTR comes closest to articulating and carrying out the interests of the President in trade, but also answers to Congress.

Finally, the United States International Trade Commission grew out of the Tariff Commission that was created in 1916. Congress in 1954 assigned the Tariff Commission responsibility, which had been in the Department of the Treasury, for determining whether dumping (the antidumping law having been passed in 1921) caused a U.S. industry material injury, a prerequisite for imposing duties arising from unfair trade. Commerce gave the ITC the same responsibility for countervailing duty cases in 1979 following the Tokyo Round of trade negotiations and passage of a new Tariff Act. The ITC is an “independent” agency responsible directly to Congress, not to the executive branch.

The trade laws have three main features: specific tariff reductions and rate-setting; treaties and agreements for trade arrangements, including non-tariff barriers and intellectual property; global capital flows have led often to treatment of trade and investment together such that bilateral investment treaties have become a frequent subject of trade negotiations. Treaties and agreements, nonetheless, are mostly for tariffs but also for preferences and dispute resolution; and trade remedies. Tariff reductions and rate-setting typically follow bilateral or multilateral agreements. They are expressions of policy only to the extent that the United States has defined a policy mutually with other countries. Unilateral trade policy, the choices of the United States without requiring agreement with anyone else, is confined to trade remedies.

Trade Remedy Laws Are Public Policy By Default

The central feature of trade remedy laws in the United States is that private parties decide which merchandise, and from which countries, will be subject to trade remedy actions. Formally, the Department of Commerce has discretion to decide whether to initiate an investigation, but Congress has fashioned the law to make investigations almost inevitable upon the presentation of a petition, provided the petitioner satisfies statutory requirements.

Congress has created offices, in both the Department of Commerce and at the International Trade Commission, to assist domestic industries preparing petitions. Before filing, petitioners typically know whether they have satisfied the requirements and whether the petition will be accepted. These offices exist to help and encourage petitioners. Congress wants the executive branch to protect domestic industries. To that extent, there is a policy, developed by Congress, inscribed in the laws and institutions.

The International Trade Commission conducts a preliminary investigation to decide whether full investigations will follow. The thresholds for this decision, however, again set by Congress, is very low. It is unusual to stop an investigation at the preliminary stage because of the statutory criteria. Once an investigation is fully underway, the market for the goods involved is distorted and there are significant trade effects.

It is also difficult for foreign interests to defeat a petition in the final determination, particularly for non-market economies. The Commerce Department has great flexibility to select surrogate values and find that government prices or domestic costs are below market values or world market prices. Some Chinese products have been found not to cause or threaten material injury to a U.S. industry (a prerequisite finding for trade restrictions), but the considerable majority of petitions result in antidumping and countervailing duty orders.

The Administration has nothing to say about which industries will petition, and not much to say about which petitions will lead to antidumping or countervailing duty orders. Congress keeps a close eye on the progress of petitions and often makes sure that Commerce officials adhere to the law. The inherent biases in the law written by Congress favor petitioners.

Congressmen and senators often testify in public hearings before the International Trade Commission on behalf of their constituent industries. Neither congressmen nor senators testify on behalf of importers or foreign producers. Congress funds the Commission.

To the extent that cumulative trade actions against foreign merchandise can be interpreted as a trade policy, it is in the United States a trade policy by default. Private parties, not the government, take most of the decisions, because they decide which industries or products will be challenged, and they choose the allegations. The law, developed by Congress over many years, generally leads to antidumping and countervailing duty orders. As long as petitioners can satisfy the criteria set out by Congress, they can restrict or interfere with trade.

The Contrast Of Trade Remedies With China

Chinese trade law has a “public interest” clause. The Chinese Ministry of Commerce (“MOFCOM”) can decide not to initiate an investigation even when a petition satisfies all legal criteria. The President of the United States has a similar power to prevent the imposition of a trade remedy for policy reasons in intellectual property cases arising under Section 337 of the Tariff Act, but not under provisions of the law for antidumping and countervailing duties.

Chinese officials do use this provision. A petition was filed in the autumn of 2009 seeking antidumping and countervailing duty investigations of wood pulp from Canada. China has a robust paper industry. China does not have, however, abundant commercial forests. It imports wood and other forest products, including substantial quantities of wood pulp. MOFCOM concluded, after an internal inquiry, that it would not be in the public interest to restrict the flow of wood pulp from Canada because, MOFCOM apparently reasoned, it was more important to support the Chinese paper industry than the nascent and inevitably limited wood pulp industry. The investigations, whatever the merits of the petitions may have been, were not initiated.

This option, referring to the public interest, does not exist for American authorities. Hence, China can decide which investigations will be pursued, and which will not. It can choose which industries to protect, and which to leave to market forces even when there may be unfair competition from abroad.

There are also important procedural differences that affect trade remedies as an expression of public policy. In the United States, the filing of a petition is a public event. The International Trade Commission and the Department of Commerce alert the public to a new petition as soon as it is filed, and the Department of Commerce has twenty days from the filing to determine whether to initiate an investigation. In a similar time span, the International Trade Commission must convene a public “staff conference” to hear arguments on whether it is likely, should investigations go forward, that it will find material injury or a threat of material injury. Parties must prepare for the staff conference, so everything about the case except confidential, business proprietary information submitted subject to administrative protective orders is public.

The public process of petitioning and launching investigations guarantees that Congress will insure the initial success of a petition satisfying minimal criteria by enabling congressmen to keep track of all developments. Consequently, the ability of private industry to dictate the public policy is assured.

In China, again by contrast, the filing of a petition is confidential and not made public, although MOFCOM officials are known to leak the existence, and often the details, of petitions to select Chinese law firms. Unlike the twenty day fire drill in the United States to challenge the petition at the Department of Commerce and convene a staff conference at the ITC, MOFCOM has sixty days to decide whether to initiate an investigation. Because the filing of the petition is not public, no one can know with any certainty when (or even whether ) a petition has been filed, and so the running of the sixty day clock is entirely in the hands (and knowledge) of MOFCOM.

The very existence of petitioners is also effectively secret in China. Consequently, if MOFCOM were to self-initiate an investigation, it could do so easily in the name of an industry or companies, especially if they were state-owned. MOFCOM put dates and an association name on the receipt and initiation of a countervailing duty investigation into saloon cars from the United States in November 2009, but specific companies in the association were not identified and many international trade observers speculated that the petition was developed at, by, and for MOFCOM.
It may be that the automobile petition should be taken at face value, filed by an association on behalf of an industry. However, the lack of transparency in the Chinese system invites speculation, which cannot happen in the United States. There has been but one Commerce Department self-initiation in U.S. trade history, against softwood lumber from Canada in 1991 (there is disagreement as to whether an antidumping investigation was self-initiated in 1986 against DRAMs). It is certain, because of the transparency of the process, that there have been no others.

In trade remedies, then, the United States cannot have a public policy, as control of the process and the outcomes is in private hands, dictated by Congress to encourage piecemeal protectionism. In China, by contrast, the government can initiate an investigation in the name of an industry, marrying trade policy to industrial policy to favor certain economic sectors. It can decline to investigate in the public interest. Hence, the government can decide what will be investigated and when, which industries it will protect, and which will be exposed to the market, whether fairly or unfairly. Those choices express public policy.

Trade Negotiations And Public Policy

Most observers equate trade policy with the negotiation of trade agreements. The United States, however, does not enter trade negotiations like any other country. The authority to sign a trade agreement is vested constitutionally in the President (Article 2, Section 2), but the regulation of Commerce is the preserve of Congress. Consequently, the President can sign an agreement, but Congress can change it before it is implemented as U.S. law.

Congress historically has changed treaties and agreements signed by the President, or rejected them outright, most famously refusing to join the League of Nations after World War I. Congress also rejected the original international trade organization, concomitant to the General Agreement on Tariffs and Trade (“GATT”) after World War II. The United States came to be known internationally as an unreliable negotiation partner because countries could not count on the signature of the President as the last word for an agreement. Congress could change the terms, or reject the agreement altogether.

To compensate for this problem, Congress agreed to create “fast track” authority, later called by President George W. Bush “trade promotion authority,” whereby Congress could accept or reject a trade agreement signed by the President, but could not change it. The existence of this authority enabled the United States credibly to negotiate trade agreements.

Today, there are three bilateral trade agreements that President Bush negotiated with trade promotion authority but that he failed to present to Congress for an up or down vote before the authority expired. President Obama has not sought and has not received a restoration of this authority. Consequently, Congress has not elected to vote on these agreements, which have been languishing between two and three years.

Without trade promotion authority, the President cannot credibly negotiate trade agreements. The Doha Round stalled over agricultural subsidies in 2008, before the election of President Obama. Today, however, progress is impossible without the engagement of the United States, and the President cannot engage credibly without authority from Congress that he has not received. Consequently, as to trade negotiations, the United States has no policy, and cannot pursue one, because the President does not have effective authority and Congress has chosen not to act on agreements already signed.

China has none of these problems. Its leaders can negotiate with unlimited confidence that their choices will meet with domestic approval. Their negotiating partners know that whatever Chinese leaders sign will be reliable. China, therefore, can fashion a negotiating trade policy: it can decide with whom it wants to reach agreements, and over what, with respect to both specific merchandise and dispute resolution, but also with respect to intellectual property, joint venturing, bilateral and multilateral arrangements, and whatever else may arise in the domain of international commerce. It can, and does, focus as a country on exchanges and agreements that will bring more natural resources to China, and on broader trade issues as well.

The Staffing Problem

When President Obama was first assembling his Cabinet, he asked Congressman Xavier Bercera about becoming his Trade Representative. Congressman Bercera turned down the offer, saying that he did not believe the President was going to assign international trade a high priority. Eventually, President Obama named the Mayor of Dallas, Texas as his trade representative. Ron Kirk’s instincts, like President Obama’s, favor free trade, based on his experience with the value of NAFTA for Texas and Mexico. But no one pretended when he was named that Ambassador Kirk was a trade expert, and conspicuously senior staffing at USTR was done primarily from the congressional trade subcommittees. As befits the history and character of Congress and trade, Ambassador Kirk’s staff was not populated with committed free traders.

To the extent the President might have wanted to pursue freer global trade through new international agreements, he has neither the authority (no trade promotion authority) nor the staff. Congressman Bercera was right in his assessment, and no trade policy has emerged from the Administration. Without congressional authorization and support, moreover, none is possible.
Arguably the most important position in international trade in the United States is not the more visible Trade Representative, but the Assistant Secretary of Commerce for the Import Administration. The occupant of this position decides in most instances the pursuit of antidumping and countervailing duty investigations, and decides their outcomes. She signs the final determinations with duty rates and with decisions over the countervailability of foreign government programs.

As of June 2010, eighteen months into his Administration, President Obama has not nominated a candidate to fill this politically sensitive policy-making position. The Acting Assistant Secretary is a former Bush Administration official, and the office, therefore, carries over from the Bush years. To the extent a trade policy emerges from the Import Administration of the Commerce Department, the policy was developed by President Bush, not President Obama.

Notwithstanding inclinations toward partisan interpretations that would make Republicans free traders and Democrats protectionists (see Part I of this article), it was President Bush’s Assistant Secretary for the Import Administration who chose to initiate a countervailing duty investigation against non-market economy China and thereby to increase significantly trade restrictions. That decision defined an important element of a trade policy, but conspicuously not of the Administration’s own initiative. Private parties petitioned for countervailing duties against coated free sheet paper from China. The Administration had to decide whether to initiate, or whether to reject the petition. Reactions to private initiatives may constitute cumulatively a trade policy, but by default if not by accident.

Once the judicial process upheld the lawfulness of the countervailing duty investigation in a non-market economy, there was little the Obama Administration could do to change it. Then, too, no Obama official has been named as Assistant Secretary.

The statute governing the ITC requires six commissioners, three from each political party, serving nine-year terms. Nominated by the President, commissioners must be confirmed by the Senate. Often the appointees have served on trade committee staffs in Congress. The confirmation process for them often produces debate over trade policy, but such debates cannot affect policy once appointments have been confirmed. Presidents must make appointments to maintain the partisan balance on the Commission, so cannot necessarily choose a candidate from their own party.

The composition of the Commission often does reflect partisan proclivities, with Republicans more inclined to rely on economic modeling and analysis and Democrats more likely to sympathize with claims of injury. Yet, Democrat Janet Nuzum, as Vice Chair, for example, was far more sensitive to the merits of free trade than some of her Republican colleagues, and Republicans on the current Commission frequently sympathize with domestic industry. Regardless, there is little Congress or the President can do to give the Commission direction because of the nine-year terms, during which the President cannot remove a commissioner.

The United States v. China

The United States pursues trade remedies to the extent, and with reference to particular goods, dictated by private sector initiatives. Occasionally it is possible to articulate a policy, as in accepting petitions alleging countervailable subsidies in non-market economies, but mostly the Administration has little to say and even less that it can do. The Obama Administration has resisted the entreaties of many in Congress to countervail Chinese currency valuation, but Congress could legislate an administrative requirement that would leave the Administration little choice.

Choices typically are few, but there are some. The Bush Administration rejected all safeguard actions against China. The Obama Administration accepted the one safeguard brought before it. It is altogether too easy, however, to misread this difference and the relevant implications. Despite many predictions, no safeguard action has been requested against Chinese merchandise since the case on tires, and the looming expiration of the safeguard provision makes further actions improbable. It would be an exaggeration to claim a policy out of the one case, particularly when paired with the Administration’s persistent position on currency valuation. None of the cases brought to President Bush carried anything like the domestic political implications of the tires case.

The Obama Administration has considered trade policy through tax policy, but essentially because of jobs. Proposals abound to tax heavily the corporate offshoring of jobs, and to expand the uniquely worldwide reach of the U.S. income tax. Such indirect instruments, however, can only hint at a trade policy, and not as a commentary on trade itself.

China seems to see in every trade investigation and in every imposed duty a policy hostile to China. China declared its investigations into chicken parts and automobiles from the United States in November 2009 expressly retaliatory, as if the tires safeguard were deliberately provocative. China read the President’s actions as aimed at China, without acknowledgment of the domestic politics that dominated and constrained his options. Publicly, at least, China also therefore took little note of the nuanced elements of the President’s actions, which were avoiding insult to the head of the National People’s Congress, setting rates that would keep the Chinese industry in business, avoiding excessive publicity for a potentially high-profile action by calibrating an announcement on a weekend. Instead, China decided to make the decision a centerpiece for antagonism, collapsing into the one case an apocalyptic view of U.S. trade policy.

The United States cannot have a coherent trade policy, particularly as to trade remedies. The merchandise in dispute and the allegations to be investigated are all defined by private parties often backed by powerful interest groups capable of delivering or denying votes and campaign resources in a perpetual electoral cycle. Retaliation against imagined trade policies, policies thought to be coherent and deliberate, can have little or no effect in shaping the future. There is no point in China pursuing a retaliatory trade policy because such retaliation cannot change what will happen in trade in the United States. Retaliation would have to anticipate, continuously, the next, most powerful interests seeking trade remedies, an impossible task.

China needs to look more closely at U.S. law and appreciate more presidential constraints where the Constitution delivers all authority over foreign commerce to Congress. It needs to be at the negotiating table when the law calls for negotiation (again, see Trade War?), and it needs to protect its own industries only when facing unfair trade and such protection is in the public interest. A policy based on retaliation, where the recipient of the retaliation (the Administration) cannot react or adjust, is a wasted policy opportunity to no one’s long term advantage.

For the United States, the President could do more to create at least an impression about trade commitments. He could nominate an Assistant Secretary of Commerce. He could ask Congress for trade promotion authority. He could engage seriously the defects in the pending, unratified trade agreements. He could take on the agricultural subsidies that contribute mightily to the deficit, paralyze the Doha Round, and drain the Treasury exceptionally, as in the resolution of the cotton dispute with Brazil by continuing to subsidize the domestic industry and then subsidizing Brazil as well. All these steps together still might not translate into a coherent policy on trade, but they would suggest a President who means what he says when he promises the G-20 to resist protectionism, when he champions an expansion of exports, when he extols the virtues of freedom, whether trading in ideas, or in goods.
 

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The Obama Administration has no trade policy, and cannot have one. China is able to have a trade policy, and has one. China does not believe that the United States has no trade policy, and tailors its policy to react to what it interprets as choices and decisions taken by the U.S. Government. The United States, to the extent it tries to have a trade policy, wants to show that it is not intimidated by the retaliatory choices of China. This systemic and profound misunderstanding is taking neither country in a healthy direction.

This article is in two parts, appearing on the blog in consecutive weeks. The first part explains the concept of “trade policy,” and what it means to have one. The second part explains the opening statements: that the United States Administration has no trade policy and cannot have one; that China can have one, and does.

Part One: What It Means To Have A Trade Policy

Politicians, pundits, and scholars talk and write about “trade policy,” but they rarely explain what they mean. “Trade Policy” refers to the accumulation of deliberate government choices to express positions and preferences on international trade. It has essentially three manifestations: in the laws and institutions of a country pertaining to trade; in the actions a country takes, pursuant to its laws, to restrict trade with respect to specific products or services; and in the negotiations a country undertakes to liberalize trade. As in all domains, policy must be understood as to what a country does, not necessarily what it says. It is politically correct everywhere to champion free trade rhetorically. If all the rhetoric could be relied upon, there would be no protectionism.

Free Trade v. Protectionism
Broadly, trade policy is thought to be either in favor of free exchange, or to be protectionist, favoring imports (free trade) or domestic manufacture (protectionism). Favoring imports, in turn, favors consumers because imports increase competition, expand the variety of products offered, and lower prices. Favoring domestic manufacture, however, generally is thought to defend jobs, and jobs, in the end, are at the heart of every trade policy.

Prior to the Clinton Administration, jobs in the United States were little associated with the production of goods for export, even though in virtually every other country jobs expansion was always understood to be dependent on exports. One of the important subliminal messages in President Obama’s vow, in his first State of the Union Address, to double exports over the next five years, was that the United States does not export very much of its gross national product. Imagine the reaction of the rest of the world if China or Japan were to promise a doubling of exports in five years.

The key difference between American and foreign perceptions of exports was that U.S. manufacturers were satisfied with the American continental market; foreign producers needed to sell into that market, not only because the United States was the quintessential consumer society, but because American wealth and the coherent continental market made it by far the most attractive and inviting place to sell. The United States, long the world’s leading champion of free trade, thought it had nothing to fear and everything to gain by encouraging the rest of the world to become more productive and sell to Americans.

Jobs And Trade Policy
Jobs, everywhere, is the key factor in trade policy. Every government maintains domestic peace by promoting and generating jobs, keeping its domestic population occupied and productive. Jobs depend on trade. Without jobs, whether in developed or developing countries, there is no income for consumers to buy imports, and no tax revenue for government services or government-built infrastructure to enable imports to reach consumers.

The more a product is entirely made from domestic materials and components, the more its producers and spokesmen (and the politicians who represent them) will want to protect their domestic market against foreign competitors, in order to protect their jobs, and the more they will want the rules of trade to favor domestic production over free trade. It is nearly impossible, however, for workers in the global economy to make something that can be finished without inputs from abroad, such that their domestic market, and their jobs, depend upon foreign goods. And, they may make something that is in much, or even more, demand, in foreign markets. They need those foreign markets open to buy their goods, and they know that it is exceedingly difficult to avoid reciprocity in market opening – for the foreign market to be open, the domestic market must be open as well. In all these circumstances, the centerpiece of trade thinking is jobs, but jobs may be protected variously by trade protectionism or by free trade. The more goods are made for export, the more the manufacturers of them must favor free trade.

Developed And Developing Countries
Developing countries historically fear free markets, especially in agriculture, because developed countries can overwhelm developing markets. The characterization of developing countries, however, has become more complicated and nuanced as countries develop at different rates and reach different stages of development. These differences lead to different views of trade.

“Developing” and “developed” here are economic terms. They refer to the construction, maintenance, and operation of infrastructure, to the production of increasingly sophisticated goods and services, to the opening of markets. Over the last decade, certain major developing countries, particularly Brazil, China, and India (not “BRIC” because Russia has not been admitted to the WTO) have separated themselves from most other developing countries by the scale and speed with which their economies are developing. China, in particular, proves that capitalism and democracy can develop separately (contrary to the popular theories of Milton Friedman, for example), as China marries capitalism (“with Chinese characteristics”) to an economy still dominated by state owned enterprises. Historically, developing countries had little influence in shaping the rules of international trade, but the combination of Brazil, China, and India has changed the dynamic. When they advance common interests in world trade forums, they can influence the practice and the rules that once had been largely dictated by the developed world, particularly Europe and the United States.

Governments do not long like to be dependent on other countries for food, which makes agriculture, and subsidies to agriculture, the most contentious of trade issues. Developing countries have always feared significant job displacement when confronting free trade, and developed countries have long craved access to the populations of developing countries because they are potential consumers of goods known not to be produced in those countries. Developing countries also tend to fear free trade because the availability of goods to buy that they do not produce can only retard or terminate the possibility that they will ever produce them.

An important common characteristic of Brazil, China, and India is that, while they identify themselves as “developing,” they generally embrace free trade because they see their paths to prosperity through exports. Nonetheless, India has led the developing world’s objections to European and American agricultural subsidies, with the aggressive support of Brazil and China.

The fault line between developed and developing countries as to trade was recognized analytically at least by the late eighteenth century. Alexander Hamilton, in his 1791 Report on Manufactures, advised the new Congress of the United States that it would be necessary to protect certain industries against foreign imports lest the new country fail to develop competitive industries. England, from whom the United States had just won its independence, was the paragon of free trade, and Hamilton feared that political independence would not mean much if the United States were to remain economically dependent on the manufacturing powerhouse across the sea.

The United States became, in the twentieth century, the global leader for free trade in the image of England in the eighteenth century, the world’s foremost manufacturing center. However, unlike England, the United States was not so dependent on exports. Its ever-expanding domestic market and continent-sized reservoir of natural resource inputs were considered by many sufficient to sustain economic growth.

The global economy has changed this calculus, reflected in ever-evolving rules of origin. It is no longer easy to tell where something has been made, which is the first step in determining the tariff treatment it should receive, in turn the result of agreements between or among the countries engaged in trade. A global distribution of goods and services leads to products with components from many different countries, making choices between domestic and foreign products artificial. Consequently, it is no longer clear whether free trade or protectionist preferences are more likely to protect jobs.

Complexity in the rules of origin has been compounded by the flow of ideas. Countries are increasingly inclined to seek barriers to the movement of goods based on the intellectual property they contain. Patents and trademarks are rapidly becoming core considerations for free trade, potentially shifting the paradigm of jobs to wealth embedded in intangible property. Laws focused on intellectual property rights inevitably favor developed countries, but developing countries are learning how to deal with those advantages. Brazil has proposed, for the compensation arising from the WTO finding against the United States over cotton, concessions over intellectual property rights, thereby tying such rights directly to international trade.

Notwithstanding the growing uncertainty as to whether favoring imports is to favor free trade and whether the defense of domestic manufacturing is necessarily protectionist, traditional lines have been drawn around trade law such that there is more than a little truth in the stereotypes. The challenge to recognize these lines is acute in the United States because the United States is second only to the European Union as the world’s largest consumer market, having been surpassed in 2008 shortly after the EU’s expansion to twenty-seven nations. It took a population 37 percent larger in the European Union to surpass, by a very small margin, the consumption of the U.S. market. Producers around the world, for at least a century, have depended on access to the U.S. market to prosper, and still do. They need to sell their goods in the U.S. market in order to earn capital and to preserve jobs at home.

The divide between free trade and protectionism often is defined as a divide between consumers and producers. Consumers are distinct from producers because they define more of what is wanted than what is needed in a society. When people want a product no one makes at home – whether because the country does not have the needed raw materials or the machinery or skills appropriate to the manufacture, or because the product could not fetch a price commensurate with the costs of labor at home – they favor free trade, access to the imported goods. Of course, it is always possible for people to want one thing but make another, therefore favoring free trade in some goods, but not in others.

Partisanship And Socioeconomic Class
Historically, free trade seemed to be the prerogative of middle and upper classes, populated more by service providers, professionals, and management. They appeared to be less dependent on domestic manufacture for their jobs than trade unionists working on assembly lines.

Consequently, free trade appeared to become associated in the United States with the modern Republican Party, characterized by management and economic elites, and the Democratic Party became identified with protectionism because of its support from trade unions. Unions supported the election of Democrats; ”big business” backed Republicans. Democrats were elected from manufacturing centers and factory towns; Republicans became a rural and suburban party of large landholders and corporate managers. Intellectuals and professionals, however, tended to confuse the picture, sympathizing with workers, living in the suburbs, voting to protect manufacturing jobs.

These logical stereotypes, it turns out, have a polling resonance but are historically inaccurate when translated into partisanship, American party affiliations, and trade policy. For over a century, every Congress, whether majority Democratic or Republican, has resisted free trade.

Congressmen derive their power in the United States locally, and the most conspicuous local concern is employment. Most congressmen are inclined to protect the jobs that already exist in their constituency, not to protect jobs that might be if there were freer trade.

Almost every global and domestic initiative to liberalize trade has been taken by a Democratic President of the United States, and most backsliding has been at the hands of Republicans. FDR and Truman saw to the GATT; Eisenhower increased tariffs, and Nixon imposed voluntary restraint agreements on steel; the “Kennedy Round” of global tariff reductions was launched by the Democratic President who gave the negotiations his name; NAFTA was Reagan’s idea, but he also extended VRAs and NAFTA was legislated by Clinton, as was the creation of the WTO and the accession of China to world trade rules. It was a Bush that imposed safeguards on foreign steel.

There are reasons for this history, and for the inaccurate stereotypes, that go beyond the scope of this article, but are describe in my speech to the American Chamber of Commerce in the People's Republic of China. The point here is merely that the principles that lead to supporters of free trade, on the one hand, and protectionism, on the other, do not translate consistently or reliably into the politics and policies of the two major political parties in the United States. When President Bush urged trade partners to complete the Doha Round before Barack Obama might become President, he was relying on the incorrect impression that Republicans would support free trade and a Democratic President would oppose it.

As popular views of trade are dictated by jobs, so a politician’s view is dictated by votes. When representing a constituency looking either to buy goods from the widest choice possible, or to export goods or services from domestic production, a politician will favor free trade. When the constituency is a domestic manufacturer whose jobs could be lost to foreign competition, a politician will favor protectionism. On balance, Republicans more generally represent constituencies of buyers and Democrats represent constituencies of producers, but the lines are inconsistent and the interests tend to narrow. Policy choices can be very specific. They can involve favoring free trade for agriculture, for example, but protectionism for automobile parts, making a state such as Indiana painfully complicated for both political parties. The same conservative farmer benefiting from massive subsidies can also lobby for open access to the Communist Cuban market.

Trade laws, which are the domestic interpretation of international agreements, reflect these choices and contradictions. They include special provisions crafted by individual legislators to protect the interests of particular constituencies provided it has been possible to compromise in the legislative process with politicians representing other, usually competing, interests.

The Three Components Of Trade Policy
Trade laws define the rules, but they alone do not constitute trade policy. The rules permit domestic agencies to investigate allegations of unfair trade, and to impose restrictions on goods or services found to be unfairly traded. The investigations, and the restrictions imposed, are probably the most important features of trade policy, because they have the most specific impact on trade partners. They determine the continuous tensions among countries over trade.

The third, remaining manifestation of trade policy is in the negotiations pursued to reduce tariff and other trade barriers, and in the choice between bilateral and multilateral negotiations. Although many observers think trade policy amounts to nothing more than these negotiations, they can take many years and have little or no short term impact on trade relations. Although formally the GATT took two years to negotiate (completing in 1947), Secretary of State Cordell Hull began the process of its achievement with reciprocal trade agreements in 1934; the Uruguay Round, launched in September 1986 was not concluded until January 1995, and the Doha Round, now at a standstill, was launched officially in Qatar in November 2001, and only after earlier false starts, as in Seattle in 1999. Meanwhile, the bilateral agreements the United States signed with Korea (2007), Panama (2007), and Colombia (2006) remain without endorsement of the U.S. Congress and without, therefore, any effect on trade. Of these three, moreover, the only one significant in economic terms involves Korea. The others, like an earlier agreement with Australia, are primarily political.

The objectives of trade negotiations are always broadly the same: to reduce tariffs and trade barriers and generally to liberalize trade. However, domestic forces driven by the need and desire to protect jobs seek to protect certain sectors and thereby to limit liberalization.

Industry in one country may crave market access in the trade partner; the trade partner may have a specific domestic need to protect its own production in that very industry. Trade negotiations routinely come apart over such conflicting needs, but they may also unravel over perceptions of nontariff barriers. For instance, the United States imagines itself to have a strict environmental regime that imposes serious costs on its manufacturing industries. Those industries believe competitors in other countries to enjoy unfair advantages by manufacturing with less exacting environmental standards. In a trade negotiation, they want the United States to oblige the trade partner to impose similar standards.

The other main point of contention in American trade negotiations, besides environmental standards, is labor. The United States imagines itself to provide the highest standards of worker protection, including minimum wages, maximum hours, and worker safety. These protections cost industries money, and those industries for whom trade liberalization is being negotiated want foreign industries to expend comparable capital to meet comparable standards. Trade unions, especially, demand that labor standards in other countries be comparable to the standards in the United States, and for at least three reasons: to make the cost of production comparable; to advance a common global cause for the rights of working men and women; and to impose a layer of protection for their domestic manufacturing jobs.

Environmental and labor standards are highly contentious in trade negotiations for many reasons. Many specialists in international trade have long believed that they have nothing to do with trade and ought not to be part of trade negotiations. Others who believe they are properly part of negotiations learn slowly that standards may work differently in different countries, and that American rules are not necessarily the most exacting, but instead may have different purposes and costs. Finding common ground can distract from traditional trade negotiations, and can emphasize disagreements between countries. Nonetheless, they are now core American demands in trade negotiations, accepted by both Republican and Democratic Presidents.

All three components of trade policy – institutions (including laws and regulations); trade remedies (investigations and imposed trade restrictions); and trade negotiations – are effectively beyond the control of the executive branch of the U.S. Government, preventing the United States from formulating and adhering to a coherent trade policy. But all three are well within the control of the central government in China, enabling China to articulate and maintain a trade policy. China wishes the world to believe that it is the leading force for free trade, but there are persuasive reasons why its goods are subject to more trade actions than the goods of all other countries combined. Part Two, next week, will explain why the United States and China are positioned so differently.

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Washington, D.C., partner Elliot Feldman, leader of Baker Hostetler's international trade practice and a regular contributor to the practice's China-U.S. Trade Law blog, was recently invited to address the American Chamber of Commerce in the People's Republic of China (AmCham-China) program, "China: Growth Engine for the Next Decade," held in Beijing.

The conference included sessions on investment opportunities, macro-economic trends, political and social developments, and opportunities for participants to engage with business and government leaders. In the "Access China" program, Feldman shared his thoughts on the current state of trade between the United States and China, the potential for and characteristics of a trade war, and what the two countries can do to avoid such a situation. Feldman was also interviewed discussing China's handling of international trade disputes while attending the conference. Watch the video below.

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Members of the Baker Hostetler International Trade practice have been quoted in numerous media outlets regarding various Chinese -U.S. trade issues, including:

Dr. Elliot Feldman: Mint: Ministry Wants Regular Cost Updates from Mial (6/3/10)

Michael Snarr: Economist Intelligence Unit Briefing Paper: Evaluating A Potential U.S.-China Bilateral Investment Treaty (6/1/10)

Dr. Elliot Feldman: Feldman Addresses American Chamber of Commerce in PRC (VIDEO) (6/1/10)

Dr. Elliot Feldman: Law360: Trade Issues On The Table In US-China Dialogue (5/24/10)

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中文请点击这里

The U.S. law firm of Baker & Hostetler LLP is pleased to announce that John W. Clayton, Jr., has joined the firm as the Director of Trade Analysis in its Washington, D.C. office. Mr. Clayton, a Certified Public Accountant, is widely recognized as the leading expert in providing cost accounting services to non-market economy industries involved in U.S. antidumping proceedings. Mr. Clayton has represented clients in more than one hundred antidumping proceedings and has achieved more victories than any other person in the antidumping field.

Over a span of more than 20 years, Mr. Clayton has assisted a wide variety of industries involved in U.S. dumping cases, including foodstuffs, chemicals, pharmaceuticals, minerals and metals, and consumer products. Mr. Clayton focuses on assisting non-market economy producers, especially in China and Vietnam, in providing the detailed production cost data that U.S. authorities demand from foreign producers subject to U.S. antidumping proceedings.

Prior to joining Baker Hostetler, Mr. Clayton served as the Chief Accountant of Grunfeld Desiderio, Lebowitz, Silverman and Klestadt LLP. He previously was employed as a cost accounting specialist with Trade Resources, a Washington, D.C., trade consulting company, and as a cost accountant with the U.S. Department of Commerce.

“The addition of John Clayton enhances Baker Hostetler’s ability to provide superior service to industries in China and Vietnam involved in U.S. antidumping proceedings,” said Elliot Feldman, head of the firm’s International Trade practice. “Before John went in-house to another law firm, he worked successfully with us. Now, John will devote his extraordinary experience, expertise and skills entirely to matters handled by Baker Hostetler.”

Baker Hostetler represents foreign and domestic companies, associations and governments from every continent in all manner of international trade, customs and immigration proceedings before U.S. and foreign regulatory agencies, courts, and international dispute resolution panels. The firm and its attorneys also enjoy close working relationships with trade lawyers in other countries throughout the world.

Attorneys in the Washington office represent clients in antidumping, countervailing duty and other investigative proceedings before the Department of Commerce and the International Trade Commission; Section 201 safeguard actions involving many different federal agencies and the White House; and Section 301 actions before the U.S. Trade Representative. They also represent clients in customs, immigration, export controls and economic sanctions matters before the Departments of Treasury, Commerce, Homeland Security, State and Defense.
 

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