USCC Issues 2014 Report to Congress, Recommends Tougher AD/CVD Regs

The U.S.-China Economic and Security Review Commission (USCC) made several trade-related recommendations in its 2014 report to Congress (here). The 11 trade recommendations, among 48 total recommendations, address several controversial issues, including antidumping and countervailing duty cases and currency manipulation. The USCC's recommendations indicate a clear concern for how U.S. agencies work to prevent unfair trade practices.

Congress should look into "whether providing statutory authority for [the Interagency Trade Enforcement Center] would enhance enforcement activities and ensure that adequate resources are available and that other Departments and Agencies are responsive to its requests, the USCC said in the report. The ITEC was created through an executive order in 2012 (see 12022905). Congress should also consider directing the Department of Commerce to update its antidumping and countervailing duty regulations "to create a rebuttable presumption that firms that are state-owned, state-controlled, or state-invested with facilities in the [U.S.] are operating at the direction of the state," it said. "Those state-directed companies would then be excluded from calculations of industry support or opposition unless they can prove that there is no such involvement or direction." That would prevent the use of foreign investment in the U.S. to impede trade enforcement actions, it said.

Congress should also consider whether state and local governments should be treated as interested parties that have standing to bring or participate in trade cases, the USCC said. Lawmakers should consider creating a private right of action to allow U.S. companies litigate against competitors directly in antidumping and countervailing duty cases, rather than having to rely on U.S. government assistance, it said. The USCC also recommended that Congress require the Office of the United States Trade Representative to brief the House Ways and Means and Senate Finance Committees on trade enforcement issues involving China which have been initiated since 2009, but not yet been resolved, and identify what steps will be taken to ensure a more rapid resolution of such issues.

The USCC also warned of a December 2016 expiration of the World Trade Organization provision that allows countries to treat China automatically as a non-market economy, which could make levying penalty tariffs for dumping more difficult. As a result, Congress may also want to "seek clarification from the executive branch as to its interpretation of Article 15 of China’s World Trade Organization Accession Protocol concerning China’s achievement of 'market economy' status," it said. Congress should also consider requiring the Treasury Department to provide specific information "on the beneficial economic impact of China moving to a freely floating currency in terms of U.S. exports, economic growth, and job creation," the USCC said.