Court Gives More Time to Request Rehearing of Case Barring CV Duties for China, Other NMEs

House Ways and Means Committee Chairman Camp (R-MI) has issued a statement welcoming the decision by the Court of Appeals for the Federal Circuit to grant an extension for filing a rehearing request in the ongoing litigation about the application of the countervailing duty laws to non-market economies (NMEs) such as China. Camp stated that the Administration must pursue all available legal avenues to overturn the underlying decision, which he believes was wrongly decided.

(Prior to 2007, the ITA had reasoned that it could not apply CVD law to NMEs because the existence of a centrally controlled economy in an NME made it difficult to identify specific actions as subsidies. However the ITA reversed course in 2007 and began imposing both antidumping (AD) and CV duties on NMEs, especially on China.

In August 2010, the Court of International Trade ruled against the ITA’s change in practice because of the risk of “double counting” when both AD and CV duties are assessed against NME goods. In December 2011, the Court of Appeals for the Federal Circuit also ruled against the ITA’s changed practice but based its decision on “Congressional intent.” The CAFC said that ITA lacked authority because Congress had indicated its intent by approving ITA’s prior, long-standing practice of not applying CV duties to NMEs through several reenactments of CVD laws. See ITT’s Online Archives 10080911 and 11122210 for summaries of the CIT and CAFC rulings.)

Ways & Means Willing to Consider Legislation to Ensure CV Duties Can Continue

Camp stated that he is willing to consider targeted legislation that ensures U.S. countervailing duty laws can be used to protect U.S. employers and workers from unfairly subsidized imports from countries like China.

Camp states that he looks forward to continuing to work with his House and Senate colleagues, and with the Administration, to explore legislative options. Camp notes that any such legislation would have to be narrowly targeted, ensure that U.S. application of its countervailing duty laws complies with its WTO obligations, and be able to pass the House and Senate without complications.

(In January 2011, U.S. Trade Representative Kirk and Commerce Secretary Bryson sent a letter to the Senate Finance Committee warning that without new legislation, the ITA will soon be forced to revoke its 24 existing CVD orders on imports from China and Vietnam and halt five similar pending investigations. The officials stated that a legislative solution is needed to address the recent appeals court ruling against ITA’s five year old practice of imposing CVDs on subsidized imports from countries with NMEs like China and Vietnam.

Their letter did not specifically mention a related March 2011 World Trade Organization Appellate Body determination, which ruled against the U.S.’ imposition of AD/CV “double remedies” in investigations involving NMEs. The U.S. has said that it will comply with this ruling by April 25, 2012. See ITT’s Online Archives 12012418 for summary.

Camp press release available here