Global Fastener News

June 27, 1985 FIN  – It’s not exactly a secret that imports are affecting the fastener industry. Some industry analysts estimate that import penetration is running between 60% to 70%. Without taking sides, let’s take a look at what a business and labor coalition — which includes the Industrial Fastener Institute (IFI), U.S. Fastener Manufacturing Group, and the American Metal Stamping Association (Washer Division) — called the Trade Reform Action Coalition (TRAC) is doing.

TRAC, which bills itself as the largest private-sector coalition ever formed on behalf of comprehensive trade law reform, was formed two years ago. It represents a cross-section of American business, trade associations and unions. Its member organizations employ some five million people and account for approximately $310 billion in sales.

Right now, the coalition is trying to drum up support for both bill H.R. 2809, introduced Wednesday the 19th by Representatives Joseph M. Gaydos (D.,Pa), John P. Murtha (D., Pa.), Richard Schulze (R., Pa.) and John M. Spratt, Jr. (D., S.C.), and for identical Senate legislation expected to be introduced shortly.

“The legislation introduced Wednesday marks a new campaign in the war for fair trade rules which must be established if the world is again to enjoy the full benefits of free trade, “said Jim Conner, executive vice-president of the American Yarn Spinners and chairman of TRAC. “We strongly support this legislation,” he continued, “because it deals effectively with such problems as diversionary and persistent foreign dumping, foreign government subsidies not reachable under current law and injurious foreign government targeting.”  Conner maintains that “the new bill also addresses numerous deficiencies in the U.S. ‘escape clause’ statute, Section 201 of the 1974 Trade Act.”

The following is TRAC’s summary of the Comprehensive Trade Law Reform Act of 1985:

Title I, Improvements in Antidumping and Countervailing Duty Laws, according to TRAC, does the following:

It makes actionable under Antidumping law, in certain circumstances, the foreign unfair trade practice of “diversionary dumping” (similar to the “upstream dumping” amendment passed by both houses of Congress last year). The provision would only apply where an existing Antidumping order or other arrangement is in effect. This would allow the Commerce Department to pursue investigations where, for example, Japanese structurals were sold to a Korean drill rig manufacturer at a dumped price, and the Korean rigs containing this dumped steel were then exported to the U.S. market.

It expands the coverage of “upstream subsidies” under the 1984 Trade Act to subsidies provided or authorized by a customs union and strengthens the law where the input is subject to an existing CVD order or other arrangement. This would allow the Commerce Department to pursue investigations where, for example, the “upstream” subsidy on the input was authorized by the EEC but paid by the member country.

It allows companies and workers who make major components (which are irrevocable destined for incorporation into final products) to file and participate in antidumping and Countervailing Duty proceedings. This would enable domestic color picture tube companies, for example, to file and participate in Antidumping and Countervailing Duty cases on color televisions.

It amends the definition of subsidy to make countervailable the provision of goods or services which are on terms inconsistent with commercial considerations, as well as loans, loan guarantees and equity infusions which are on preferential terms. This would permit the Commerce Department, for example, to countervail against the Canadian government’s “stumpage” payments to Canada’s softwood lumber industry if such payments were inconsistent with commercial considerations.

It specifies the kinds of commitments to eliminate subsidies that foreign governments would need to make in order to qualify for (and continue to get) the injury test under Countervailing Duty law. This would require, for example, that Mexico and other advanced developing countries phase-down and eliminate export subsidies promptly; that the president review compliance on annual basis; and that the injury text benefit be withdrawn in the event of non-compliance.

It waives preliminary ITC injury determinations in Antidumping Duty cases involving products for which there have been recent findings of injury. This would allow domestic companies, for example, to save the time and expense for preliminary determination in “revolving door” cases involving multiple suppliers of the same product.

It provides for a number of important procedural changes, including: (1) more rational procedures for the disclosure of confidential information under administrative protective order; (2) various limitations on the Commerce Department’s authority to conduct “quick and dirty” 90-day reviews of antidumping orders; and (3) elimination of the ITC role in determining whether “critical circumstances” exist to trigger the retroactive application of duties.

Title II, Improvements in Section 201 (the “Escape Clause”), according to TRAC, does the following:

It eliminates the current role of the president and makes the USTR the “administering authority.” This would help depoliticize Section 201 cases.

It replaces the requirements that imports the “substantial cause” of serious injury with the requirement that they merely be the “cause” of serious injury.

It makes relief more effective and certain by strengthening the “threat of injury concept precluding adjustment assistance as the sole form of relief; allowing for provisional relief measures in the early stages of investigations if import surges occur; requiring USTR to consult with foreign governments that have contributed to serious injury by targeting export markets or restricting imports of the product; allowing major parts and component producers to file and participate in proceedings; requiring USTR, if dumping or subsidization is uncovered, to consult with affected U.S. companies and workers about taking appropriate action under the Antidumping and Countervailing Duty laws; and permitting petitioners to re apply for relief in less than two years if good cause is shown.

It establishes an optional alternative procedure designed to provide greater assurance that the relief provided is consistent with the requirements of enhance competitiveness or adjustment to new methods of competition facing the industry. This involves the voluntary establishment of a tripartite advisory group to assess current problems and recommend a strategy to enhance competitiveness.

Title III, Improvements in Section 301 (“Enforcements in U.S. Rights”), according to TRAC, does the following:

It eliminates the current role of the president and the interagency Section 301 Committee, and makes the USTR the “administering authority.” In addition, it provides for strict investigatory and decision-making timelines; written questionnaires to foreign governments; verification of information submitted by foreign governments; and disclosure of confidential information under administrative protective order. These changes would help depoliticize Section 3011 and make its procedures more like those in antidumping and countervailing duty cases.

It defines the term “targeting” and requires the USTR to take corrective action on behalf of domestic companies and workers injured by foreign industrial targeting.

Title IV, Negotiating Objectives, according to TRAC, does the following:

It clarifies that all U.S. products and services, not just high technology products, should be accorded maximum access to foreign markets.

It authorizes USTR to enter into negotiation aimed at strengthening GATT rules governing conduct by state-owned or controlled enterprises that engage in international trade. Such talks would seek to establish objective standards for determining when state-owned or controlled enterprises are operated on terms inconsistent with commercial considerations.

If you’d like to get your two cents in, the Trade reform Action Coalition’s address in ℅ S.S.C.I, 1919 Pennsylvania Avenue North West – Suite 400, Washington, D.C. 20006.  ©1985/2015 Fastener Industry News.

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