New Anti-Circ Regulations Open Questions About Public Interest Consideration, Scope Inquiries

Anti-circumvention petitioners need to walk a fine line between being inclusive in their definition of the scope of the goods to cover all goods potentially guilty of circumventing antidumping and countervailing duties, and not causing "mischief" at the International Trade Commission by making the scope too broad, said Mary Jane Alves, partner at Cassidy Levy. Speaking during a panel at the Georgetown International Trade Update about the interplay between the Commerce Department and the ITC, Alves, speaking on her own behalf and not for her firm or clients, said that petitions seeking to cover products that are further assembled, blended or processed in the U.S. under anti-circumvention cases can risk having the ITC deem those assemblers, blenders or processors part of the domestic industry.

"Unfortunately, a minimalist approach to a sufficient production-related activities analysis that includes such firms in the domestic industry means that their profitable, limited production activities, using imported goods typically, are going to taint the picture for the entire real domestic industry," Alves said.

Jumping in to disagree, Julie Mendoza, partner at Morris Manning and counsel for anti-circumvention respondents, said that this should not cause "mischief" at the ITC. "As respondents' counsel, I respectfully disagree with you," Mendoza said to chuckles from the crowd. "The 'mischief' that if you include a product in the scope, the commission's like product should be the same or definitely include those products, I don't think that's mischief, I think that's what the law says that the commission has to do. I think if you bring a case with a whole bunch of products, you have to be prepared for the fact that that may implicate a number of different industries that may also have to be included in the domestic industry because their products are being included in the scope in the case, so I don't think there's anything mischievious about that."

Differing views between Mendoza and Alves over Commerce's new anti-circumvention regulations (see 2109160062) and potential reforms to such regulations moving forward highlighted the discussion. The two debated various elements of anti-circumvention inquiries, including the prospect of adding a public interest consideration when making decisions on whether to open anti-circumvention cases. Mendoza argued for the prospect of adding in such a consideration, explaining that the broader impact of anti-circumvention law should be considered and that the ultimate goal is getting manufacturing back in the U.S. Mendoza explained that anti-circumvention laws could harm this prospect for manufacturers that move back, then need to continue importing certain inputs but find this process daunting given the duties on the goods.

"Now this is like declaring war for the domestic industry because they don't want any influence from any political parties in the government to be involved in these determinations, because they're worried that these other considerations may outweigh the interest of the particular companies that are bringing an anti-circumvention proceeding," Mendoza said. "But I don't know how to operate in today's world by simply saying we're going to let our professionals and staff decide all of these issues that are going to have enormous impacts throughout the economy. To me, having a public impact consideration would be extremely important."

Alves, though, responded that she "strongly disagrees" with a public interest test. She said a public interest consideration undermines the entire purpose of the trade remedies "which is to prevent the domestic industry from being endangered by these imports that are coming in that are being unfairly subsidized from other countries. If you're looking at what the impact is on the purchasers or on the consumers, any purchaser or consumer, of course, is going to want a cheaper good, but you have to make sure that the goods aren't being unfairly dumped on the U.S. market."

Alves added: "I think that the vigorous use of existing legal authorities to impose antidumping and countervailing duty orders and to prevent circumvention, these are critical to allow the domestic industries to flourish and encourage onshoring and reshoring. If we didn't know before, certainly the last few years have illustrated the importance of having a strong manufacturing and food base in the United States. The United States needs full access to a full American supply chain, and that's the only way to support robust manufacturing here.

"If we're going to let bad actors come in and dump the parts in the United States market, what are we going to end up with? A bunch of assembly operators ... is that what we want? No! We want the innovators, the developers and the true manufacturers here in the United States fully supported by United States supply chains," she said.