Observations on Trade Remedies at the USITC

Daniel R. PearsonChairmanU.S. International Trade Commission

2007 Seoul International Forum on Trade Remedies

Korea Trade CommissionJune 27, 2007

Disclaimer

• The comments I’m making today are my own

• They should not be construed as representing the views of the USITC

Investigative functions of the ITC• Conduct import injury investigations in

antidumping, countervailing duty and safeguards cases (Dept. of Commerce determines dumping margin)

• Oversee the Sec. 337 process regarding intellectual property rights

• Conduct studies on trade issues

Largest U.S. trading partners, 2006 (value of two-way trade in goods)

Canada $ 573 billion

China $ 343

Mexico $ 334

Japan $ 206

Germany $ 130

United Kingdom$ 97

Korea $ 77

Countries against which the United States has the most AD/CVD orders

China 63

Japan 21

India 21

Korea 20

Taiwan 15

Italy 14

Countries imposing the most AD/CVD orders against U.S. exports

China 17

Mexico 13

India 12

Canada 5

Brazil 4

Korea 2

Worldwide AD Orders (1/1/07)Antidumping Petitioner Antidumping TargetUSA 256 China 325

India 159 Korea 95

European Union 132 Japan 69

Turkey 95 USA 65

China 89 Taiwan 60

Korea (14th) 26 India 57

Worldwide CVD Orders (1/1/07)

CVD Petitioner CVD TargetUSA 44 India 19European Union 12 Korea 7Canada 6 European Union 6South Africa 3 Brazil 6Mexico 2 China 5Korea 0 Indonesia 4

U.S. sectors with the most AD/CVD orders in place

Iron and steel 136

Chemicals 40

Miscellaneous manufactures 33

Agricultural products 30

Non-ferrous minerals and metals 26

Title VII Cases at USITC

0

20

40

60

80

100

120

140

Year

Num

ber

of C

ases

Negative

Affirmative

Number of Cases

AD/CVD case filings, 1995 - 2006

Current AD/CVD caseload (as of June 7, 2007)

Preliminary phase investigations 4

Final phase investigations 12

Full sunset reviews 45

Expedited sunset reviews 3

Total active investigations 64

U.S. AD/CVD investigations and orders involving Korean firms

Final phase investigations 2

Full sunset reviews 1

Orders involving steel products 12

Total orders (on 16 products) 20

U.S. AD/CVD comparison: Korea vs. China

Korea: 3 investigations 20 orders

China: 8 investigations 63 orders

Appeals and dispute settlements of USITC AD/CVD determinations

• First appeal is to the Court of International Trade in New York (roughly 40 percent of decisions get appealed to the USCIT)

• Second level of appeal is to the Court of Appeals for the Federal Circuit in WDC

• WTO or NAFTA dispute settlement also may be options in some cases

Appeals and dispute settlements of USITC AD/CVD determinations

• 32 appeals pending at the USCIT

• 2 appeals pending at the Federal Circuit

• 2 disputes pending before a NAFTA panel

• 4 disputes pending before the WTO

Intellectual property investigations (Section 337)

• Used to address imports that infringe U.S. patents, copyrights or trademarks

• Cases are tried by administrative law judges (ALJs); the Commission reviews their determinations

• Approx. 40-50 percent of the cases settle prior to the conclusion of litigation

Section 337 • If a violation is found, the remedy could be:

• an exclusion order, under which Customs would prevent the import of infringing goods; and/or

• a cease and desist order, which would prevent named respondents from selling inventories of infringing goods, etc.

Sec. 337 (continued)• The Commission intends to finish all Sec. 337 investigations within 12-15 months

• Usage of the Sec. 337 process has been rising

• The ongoing increase in workload may make the short timeframe infeasible

• Sec. 337 process requires more resources

Sec. 337 institutions

Fiscal Year Total Korea

2000 12 1

2001 32 1

2002 16 1

2003 21 1

2004 27 3

2005 29 3

2006 40 6

Sec. 337 activity involving Korea (as of June 7, 2007)

• 9 investigations of products from Korea, all involving allegations of patent infringement

• 3 deal with wireless communication devices or their components (including the recent Broadcom patent case involving Samsung and LG Electronics)

Litigation involving Sec. 337 determinations

• FY 2000: 6 appeals pending at the Federal Circuit

• FY 2005: 18 appeals pending

• FY 2006: 15 appeals pending

Industry and economic investigations at the USITC

• Analysis of trade and competitiveness issues, including Section 332 reports

• Independent research on various issues (enhanced economic modeling, etc.)

• Analysis of probable economic effects ofproposed trade agreements

Industry and economic investigations at the USITC

• Currently 28 active investigations

• Reports now are in progress to evaluate two free-trade agreements:

Korea and Panama

Report on Korea-U.S. FTA

• Assess economy-wide and sectoral effects of the FTA

• Scheduled to be delivered on Sept. 20, 2007

• Use a variety of analytical methods, including general and partial equilibrium

models

Report on Korea-U.S. FTA

• Public hearing held on June 20, 2007

• Testimony from a variety of parties, including Korean Ambassador Lee Tae-sik, trade associations and interested industries

• What did we learn at the hearing?

Conclusion

• AD/CVD filings have trended downward. What will cause them to increase?

• Intellectual property cases have been rising. Have they reached a peak?

• The study on the Korea-U.S. FTA should help to inform the policy debate regarding this agreement.