What are the various trade instruments (laws) that are available to U.S. industries hurt by what they perceive to be unfair competition?

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Standing up for Steel

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What are the various trade instruments (laws) that are available to U.S. industries hurt by what they perceive to be unfair competition?

The U.S. has an arsenal of trade instruments available to them to redress domestic grievances about unfair competition abroad.

  • Quotas – begun in 1969, allowed some imports to continue.
  • voluntary export restraints/import agreements – quota-like voluntary agreements used by Nixon, Reagan and Bush 41.
  • minimum price (“trigger price”) undertakings – a certain amount of steel was allowed into the country if it was sold at or above a trigger price.
  • antidumping measures – deal specifically with unfair trade; if a union or group of domestic steel makers believed a steel product was being imported at an unfair price (“dumped”), it could obligate Commerce to initiate an investigation.  If injury was found, a margin of dumping was determined and a case made before the ITC to prove injury to the industry.  If the foreign company was guilty, it had to pay duties equal to the margin.  During the 12-18 month period to determine findings, the foreign company had to post a bond for the dumping margin.
  • countervailing duty measures – brought when domestic companies believed a government subsidy in a foreign country was giving an industry in that country an unfair advantage; included long-term imposition of tariffs or quotas, interest free loans, assumption of pension and health care costs.  If the ITC found injury, Commerce would have the US Customs impose an offsetting duty on the imports equal to the subsidy.
  • Section 201 action – expensive, less common, higher injury standard, harder to prove, but had broad ramifications as it could target all steel imports from all countries
  • Relief was at the discretion of the President.  He could take/implement no action, Tariff, Quota, Tariff-rate quota, or Trade adjustment
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Bilateral trade initiatives – to manage imports and exports

Was the U.S. steel industry justified in its request for protection?

Several factors justified the U.S. steel industry and related interests to ask for protective measures:

  • Closed markets, i.e. Japan
  • State-owned and supported steel enterprises, i.e. Soviet Union
  • Government subsidies such as the assumption of pension and health care costs, i.e. European governments.
  • Stringent labor and environmental regulations in the U.S.
  • Foreign demand dropped, currency devaluations in S.Korea and Japan cut prices further…

However, the dumping laws were plaintiff-friendly as 80 percent of all cases brought in ...

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