U.S. Government To Investigate Effects Of Steel, Aluminum Imports On National Security
Lingna Yan and Patrick Togni
In late April, Commerce Secretary Wilbur Ross initiated two investigations to determine the effects of imported steel and aluminum on national security pursuant to section 232(b)(1)(A) of the Trade Expansion Act of 1962. The investigations must be concluded and a report submitted to President Trump within 270 days. The President will then have 90 days to determine what action should be taken to remedy any harmful effects caused by the imports, as discussed in the Commerce report. Shortly after Commerce initiated the investigations, President Trump signed two presidential memoranda instructing Commerce to prioritize the steel and aluminum investigations. President Trump also identified other “core industries” and “critical elements of” the U.S. “manufacturing and defense industrial bases, which we must defend against unfair trade practices and other abuses”, including “vehicles, aircraft, shipbuilding, and semiconductors.” Thus, it is possible that additional Section 232 investigations regarding other products could be initiated in the future.
2017 National Trade Estimate Released By USTR
Ben Bay
On March 31, 2017, USTR released the 2017 National Trade Estimate (NTE). The NTE is an annual survey on barriers to American exports, including tariffs, export subsidies, insufficient intellectual property rights protections, as well as barriers to investment, services and digital trade. The report covers 58 countries, the European Union, Taiwan, and Hong Kong.
The Trump Administration has stated a trade priority to defend American workers from harmful trade barriers, such as those identified in the NTE, and to promote free and fair trade. In line with that priority, USTR has placed an increased focus on technical barriers to trade and barriers to digital trade in this year’s NTE.
The full report can be downloaded here.
Update On Construction Of Pipelines Using Domestic Steel And Iron
Marina Lleonart-Calvo and Kathleen L. Benner
On January 24, 2017, President Donald J. Trump signed the Presidential Memorandum Regarding Construction of American Pipelines directing the Secretary of Commerce to develop a plan under which all new, “retrofitted, repaired, or expanded pipelines, inside the borders of the United States” use American-made materials and equipment. As previously reported, on March 16, the Department of Commerce published a Federal Register notice seeking comments regarding the use of materials produced in the U.S. in the construction of American pipelines. A total of 91 comments were filed in response by several parties, including manufactures, importers, suppliers, distributors, foreign and local domestic governments, foreign and domestic industry associations and individuals (there were two confidential and 89 public submissions). In consultation with relevant agencies, the Secretary of Commerce must develop and submit a plan to President Trump by July 24, which is 180 days from the release of the Presidential Memorandum. This is part of a broad focus by the federal government on the role of domestic steel production, which is a key component of pipeline construction.
Senators Request GAO Report On Federal Economic Adjustment Programs, Including Trade Adjustment Assistance
Elizabeth E. Owerbach and Alexandra Carr
On March 28, Senators Chris Coons (D-Del.) and Shelley Moore Capito (R-W.Va) requested that the U.S. Government Accountability Office (GAO) review major U.S. government economic adjustment programs, including programs related to trade, and options for “a more comprehensive policy response.” The United States’ economic adjustment programs address workers, companies, and communities impacted by certain types of external forces and policy changes. One such economic adjustment program is trade adjustment assistance (TAA), which addresses the impact of trade agreements. Senators Coons and Capito argue that the current scope of the economic adjustment programs exclude powerful economic forces such as emerging technologies, autonomous vehicles, and globalization. These excluded economic forces impact millions of Americans, resulting in a system of “fragmented programs and resources that do not adequately meet the needs of our rapidly and consistently changing economy.” The comprehensive review of these programs will reevaluate effectiveness and gaps in services, report on areas for policy improvement, and assist policymakers in developing more encompassing economic adjustment programs.
New Developments For U.S. Trade Representative And U.S. Export-Import Bank Nominees
Quinn Bailey and Clint Long
On April 25, and after months of negotiations, U.S. Trade Representative (USTR) nominee Robert Lighthizer was unanimously approved by the Senate Finance Committee. The negotiations had hinged on whether a congressional waiver was necessary to address Mr. Lighthizer’s earlier representation of foreign governments in trade disputes while in private practice. Democrats insisted that a bill protecting healthcare and pension benefits for thousands of retired coal miners be attached to the waiver. The Senate Finance Committee approved the waiver after Senate Republicans pledged to protect the miners’ benefits. Mr. Lighthizer’s nomination (including the waiver and miners’ benefit package) now moves to the full Senate for a final confirmation vote.
President Trump’s trade team continues to take form with his nomination of former Rep. Scott Garrett (R-N.J.) to be the President of the U.S. Export-Import Bank (Ex-Im Bank). Mr. Garrett was a vocal opponent of the Ex-Im Bank when he was a member of the U.S. House of Representatives. Mr. Garrett’s nomination must be approved by the Senate.
Commerce Found That A Particular Market Situation Applied in the Antidumping Administrative Review of Certain Oil Country Tubular Goods from the Republic of Korea
Saud A. Aldawsari and Richard Lutz
On April 10, 2017, the Department of Commerce issued its final results in the antidumping administrative review of Certain Oil Country Tubular Goods from the Republic of Korea (OCTG). Commerce found that a Particular Market Situation (PMS) applied in Korea because of distorted OCTG input costs. Under the Trade Preferences Extension Act of 2015, Commerce has the authority to make adjustments to its dumping margin calculations where a PMS exits through distortive government intervention affecting either the sales price of the product under investigation or its cost of production. In this case, Commerce found that the PMS in Korea OCTG resulted from four factors including (1) cheap Chinese steel products flooding the Korean market, (2) Korean government subsidization of the Korean steel industry, (3) strategic alliances between Korean steel producers and Korean OCTG producers, and (4) Korean government supports affecting electricity costs. This case is instructive because Commerce’s PMS methodology may make it easier to obtain meaningful relief from unfairly traded products exported from countries like Korea, Thailand, and Japan.
