Overview of Comments on AD/CV Duty System Analysis
The International Trade Administration has posted comments by 38 groups regarding prospective versus retrospective antidumping and countervailing duty systems, which were due by April 20, 2010.
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(The ITA requested comments and announced an April 27, 2010 public hearing to assist in its analysis of prospective and retrospective AD and CV duty systems, in preparation of a report to Congress. See ITT’s Online Archives or 03/31/10 news, (Ref: 10033145), for BP summary.)
The following are highlights of the shared concerns of certain groups regarding the advantages and disadvantages of the maintaining the current retrospective system versus changing to a prospective system.
Prospective System Would Minimize Evasion, Uncollected Duties, Help Importers
Generally, importer and foreign supplier organizations, including the U.S. Association of Importers of Textiles and Apparel (USA-ITA) and the Vietnam Chamber of Commerce and Industry (VCCI), commented in support of change to a prospective system.
USA-ITA states, among other things, that a prospective system would minimize the issue of uncollected duties that has arisen under the retrospective system. A prospective system also reduces incentives and opportunities for evasion of duties and eliminates the need to consider whether one importer represents a higher risk of non-collection than another. A prospective system would also allow importers to timely identify their costs, and carries less administrative burden than the current system.
VCCI comments state that the replacement of the current retrospective system by a prospective system would be a significant step in improving the U.S.’ AD and CV laws and regulations, and a signal of trade liberalization that could contribute to facilitating Vietnam exports to the U.S.
The Chinese National Federation of Industries (CNFI) also submitted comments in support of a prospective system, stating that it would be a better way to impose AD duties for both remedying injurious dumping exports to the U.S. and creating minimal administrative burden.
Retrospective System is More Burdensome, but More Precise
The China Chamber of Commerce for Import & Export of Machinery & Electronic Products (CCCME) argued that the retrospective system creates more burden to all parties, including the investigation authority, but it is more precise in determining the actual duty rates than the prospective system, and can better remedy injurious dumping or subsidized exports to the U.S.
Retrospective System Can Measure Under/Overcollection of Duty, Reduces Error
Domestic producers and unions, including the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and the Steel Manufacturers Association, commented in support of keeping the current retrospective system.
AFL-CIO supports the current retrospective system because it: (i) makes it possible to measure and account for the under or over-collection of duties; (ii) minimizes the likelihood that continued dumping and/or subsidization will not be captured; and (iii) helps reduce the chances that foreign producers and exporters, as well as U.S. importers, would have to pay duties that exceed the actual extent of dumping or subsidization.
Retrospective System Allows for Refunds When Importers Trade at Fair Value
The Steel Manufacturers Association states that prospective AD/CV systems are one-sided and put the interests of foreign producers, foreign exporters, and importers ahead of the interests of domestic producers and workers for whom AD/CV duty laws are meant to provide a level playing field. Conversely, the retrospective system is a two-sided system that remedies injury to U.S. industry caused by dumping and improper subsidization, while also allowing importers to obtain refunds when they trade at fair market value.
Root Problems Would Not be Addressed by Changing Systems
The Southern Shrimp Alliance (SSA) states that the root causes of many of the concerns identified by Congress (minimizing uncollected duties; reducing opportunities for evasion; and effectively targeting high-risk importers) would not be meaningfully addressed by a change from a retrospective to a prospective system. Accordingly, in its report to Congress, SSA states the Commerce Department should address these problems and identify potential solutions that should be undertaken, regardless of whether a retrospective system is maintained or a prospective system is introduced.
ITA list of comments (posted 04/21/10) available at http://ia.ita.doc.gov/download/rvp/cmts-20100420/rvp-cmt-20100420-index.html