Tag: International Trade Commission

This Morning in Metals: ITC determines U.S. industry not injured by fabricated structural steel imports

This morning in metals news, the U.S. International Trade Commission (USITC) made a negative determination in the ongoing anti-dumping probe of fabricated structural steel imports, the Pilbara Ports Authority released […]

Former ITC Vice Chair: The Impact of Job Losses on Vulnerable Communities Must Be Seriously Examined

Dean A. Pinkert is a partner in Hughes Hubbard’s International Trade practice. He is a former Commissioner of the U.S. International Trade Commission. Pinkert was nominated by President Bush and confirmed by the Senate in 2007, and was designated Vice Chairman by President Obama in 2014.
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As a commissioner, Pinkert participated in numerous anti-dumping, countervailing duty, and safeguard investigations, including the special safeguard investigation of passenger tires that resulted in import relief for the domestic tire industry and was upheld by the World Trade Organization. He participated in an unprecedented number of final determinations in Section 337 investigations during his tenure, notably dissenting in an electronic devices case that went to President for policy review. President Obama, relying on many of the factors cited in the dissent, overruled the commission for the first time since 1987.
[caption id="attachment_84022" align="alignleft" width="180"]Dean Pinkert Former ITC Vice Chair A. Dean Pinkert. Source: Hughes Hubbard.[/caption]
Pinkert spoke with MetalMiner Editor Jeff Yoders by phone about several issues facing metals producers and manufacturers, including global steel and aluminum overcapacity and how the new Trump administration can approach trade and overcapacity issues. This is the final post in our three-part series that covers border-adjustment and tax policy.

JY: The reason you might want to avoid a VAT is that it would apply to all transactions, right? It would be on individuals and not companies.
DP: Think of it as the difference between a sales tax in the United States and an income tax. They are completely different. A VAT is essentially a national sales tax. We have sales taxes but the issue we’re talking about is the corporate income tax. If the U.S. adopted a VAT it would be a huge change so the idea here is to stay within the corporate income tax concept, but make some tweaks so that U.S. companies aren’t disadvantaged relative to foreign companies. Because we’re not talking about a VAT, though, you might get a different outcome at the World Trade Organization when it’s challenged by another country.
A VAT would be a big change. We are getting into some areas of policy that I’m not an expert on here, but there are all sorts of other issues that go way beyond the issue, but from a trade perspective the idea of a border adjustment is supposed to neutralize the advantage that VAT tax countries might have in international trade. The WTO may come to the conclusion that, even though a border-adjustment does have some features of a VAT, it’s still not acceptable because it might be viewed as an export subsidy.
JY: If you were called to the Oval Office to advise the administration on how to move forward on making trade more fair, what the most pressing issues are and what the administration should do first, what would you tell them?
DP: Wow, that’s a great question. The administration has obviously talked about taking the Trans-Pacific Partnership off the table and I understand that. There are a whole series of issues, though, that I think, should be discussed with our trading partners. Those include services trade, non-tariff barriers, intellectual property, labor rights. Whether TPP was the right agreement or not, let’s leave that to one side, it would be a big opportunity cost for the administration not to address those issues. It sounds to me that when I listen to (German President Angela) Merkel and President Trump or (U.S. Trade Representative nominee) Bob Lighthizer at his confirmation hearing, it sounds me like the administration is going to be aggressive in pursuing negotiations and understanding on those issues with our trading partners.
JY: Losing the intellectual property portions of TPP is something that I think we in the press did not do a good enough job of communicating to the public exactly how it would have brought a level of IP enforcement to the countries in that agreement. Places that have a completely different view of IP.
DP: A lot of what happens in these trade negotiations is of benefit of the trading partner to agree to. Many people think of it as we’re going to go into this negotiation and they’re going to get some things from us and we’re going to get some things from them. But, in many cases, the things we “get from them” are actually good for those trading partner nations. The broadest example is if you go back to the WTO agreements in the early ’90s. One of the things that was agreed to is that countries would have a system of judicial review of the decisions that were being made on trade for their country. That wasn’t just good for the U.S. or individual trading partners, it was good for everybody.
Intellectual property enforcement might look like a give to an Asian country but it could be a tremendous benefit to them.
JY: Yeah, we talk about economic change but there’s not much we can change about another country or society we trade with. It’s the actual people within it who can create more change in that society.
DP: Yes, and sometimes it’s convenient for a country, I’m not naming names, that knows it needs to modernize and reform to tell its people “well, we had to do this because of the negotiations.”
It’s more convenient to say that than to say we needed to change because it’s good for us. I think judicial review is a good example of that.
JY: Anything else you’d like to see about trade or your time at the ITC?
DP: Yes, there is something else. This is a time of uncertainty about what the exact strategy and tactics the new administration is going to employ in the international trade area are. It’s an opportunity for everybody to rethink their assumptions and think about how people in many parts of the U.S. have been affected by trade and technology. Hopefully the result will be we will address the problems that are being experiencing many people in our communities.
If you think about the issues of opioid addiction and family breakdown in many of our communities, this is happening in places where the traditional sources of jobs have dried up. That’s where these things are happening.
With this new administration we have new opportunities to address that, you might have heard that one of the reasons I left the ITC when I did was, that after 10 years there, I saw an opportunity to come to Hughes Hubbard and I thought it was an opportunity, with that platform, to try to help companies to understand and take advantage of this new environment in trade.

Former ITC Vice Chair Talks WTO, Border-Adjustment Tax

Dean A. Pinkert is a partner in Hughes Hubbard’s International Trade practice. He is a former Commissioner of the U.S. International Trade Commission. Pinkert was nominated by President Bush and confirmed by the Senate in 2007, and was designated Vice Chairman by President Obama in 2014.
Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up
As a commissioner, Pinkert participated in numerous anti-dumping, countervailing duty, and safeguard investigations, including the special safeguard investigation of passenger tires that resulted in import relief for the domestic tire industry and was upheld by the World Trade Organization. He participated in an unprecedented number of final determinations in Section 337 investigations during his tenure, notably dissenting in an electronic devices case that went to President for policy review. President Obama, relying on many of the factors cited in the dissent, overruled the commission for the first time since 1987.
[caption id="attachment_84022" align="alignleft" width="180"]Dean Pinkert Former ITC Vice Chair A. Dean Pinkert. Source: Hughes Hubbard.[/caption]
Pinkert spoke with MetalMiner Editor Jeff Yoders by phone about several issues facing metals producers and manufacturers, including global steel and aluminum overcapacity and how the new Trump administration can approach trade and overcapacity issues. This is part two of our discussion, which focuses on cases that rise to the WTO. See part one here if you missed it.

Jeff Yoders: Is there a risk to elevating any such case to the WTO of essentially spending the money and hiring the lawyers, only to lose the case?
Dean Pinkert: First, there are two types of cases. When there’s a decision by the U.S. Trade Representative‘s office to file a case with the WTO, we’ll call those offensive cases. They are filing a complaint with the WTO saying that another country is violating its trade commitments. By the way, I think the Obama administration was very aggressive at developing and filing cases of that kind.
There is another type, and these are what I was referring to earlier, where the U.S. has an investigation of something, concludes that a trade remedy is appropriate, imposes that trade remedy and then gets sued and it goes to the WTO. In 2002, when the steel safeguard relief was put into place, the U.S. was taken to the WTO by our trading partners and, ultimately, the WTO ruled against the safeguard. It was then withdrawn, although the Bush administration said the reason it was withdrawn was because it achieved its aim of giving the domestic industry some breathing space so that they could regain profitability, not because of the loss.
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I was talking more about that more defensive posture in the WTO when I was talking about safeguards.
JY: There’s a lot of talk about a border-adjustment tax right now. Many policy papers are calling the scheme very similar to a value-added tax but only on companies. Is there a chance that such an idea might run afoul of WTO rules?
DP: We don’t now exactly what it would look like or what the final measure, if there is one, would be. We don’t know how the WTO would react to it, either, but it’s possible that the WTO would consider it an export subsidy and, if it did, then that would have some serious consequences because there is a list of various kinds of subsidies, particularly export subsidies, in the WTO agreement. If it was found to be an export subsidy there would be considerable consequences for the U.S.
But, it’s important to note that we don’t even know what the border adjustment tax will look like yet. We would have to see.
JY: Yeah, we’re in speculation territory here…
DP: Yeah. The way I’ve heard it described is that, if you’re paying corporate income tax in the U.S. and you import your inputs for whatever you’re manufacturing, then you would not be able to deduct the costs of your imported inputs from revenue. Whereas, if you used domestic inputs, you would be able to deduct those costs from revenue.
There’s a big difference from existing policy there and there’s been some talk from foreign trading partners about objection to the very idea of border-adjustment, but one of the feelings among manufacturers in the U.S. and others is that a VAT gives foreign exporters an unfair advantage. A VAT is not considered to be an export subsidy by the WTO, so what many of these domestic companies are asking is does the U.S. actually need to impose a VAT to get fair and equal treatment?
Or could the U.S. do something similar but not exactly the same as a VAT via a corporate income tax? If this border-adjustment tax has the same kind of effect as a VAT it could receive the same kind of favorable treatment by the WTO that the VAT countries receive.

ITC Adopts New Rules for Tariff Cuts; Alcoa Board Approves Split

ITC Adopts New Rules for Tariff Cuts; Alcoa Board Approves Split

The International Trade Commission is preparing new rules for tariff cuts and Alcoa’s board has approved the plan to split the company in two.

ITC Adopts New Rules for Tariff Cuts

The U.S. International Trade Commission said Thursday that it is adopting interim rules to create a way for companies to submit items for potential tariff cuts under the new miscellaneous tariff bill process, forgoing the normal rulemaking process to meet a mid-October deadline.

Alcoa Board Approves Split

Aluminum producer Alcoa Inc. said on Thursday its split into two publicly traded companies is expected to be effective Nov. 1, after the company’s board approved the separation.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

Alcoa said last year it would break itself in two, separating a faster growing aerospace and automotive parts business from the traditional aluminum smelting and refining operations, as shareholders sought higher returns amid a commodity slump.

Dumpwatch: ITC Finds Imports of Non-Oriented Electrical Steel Dumped in the US

Dumpwatch: ITC Finds Imports of Non-Oriented Electrical Steel Dumped in the US

The United States International Trade Commission (USITC) recently determined that US industry is materially injured by imports of non-oriented electrical steel (NOES) from China, Germany, Japan, Korea, Sweden, and Taiwan that are sold here at less than fair value and that are alleged to have been subsidized by the governments of China, Korea, and Taiwan.

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AK Steel Corporation filed petitions on September 30, 2013, charging that imports of NOES were unfairly traded. On October 7, 2014, the Department of Commerce announced its final affirmative determinations that imports of NOES were dumped from all six countries and that imports from China and Taiwan were also subsidized.

Dump Watch: ITC Rules Against US GOES Producers; AK Steel, ATI Vow to Appeal

Dump Watch: ITC Rules Against US GOES Producers; AK Steel, ATI Vow to Appeal

The US International Trade Commission (USITC) today determined that the domestic Grain-Oriented Electrical Steel (GOES) industry is neither materially injured nor threatened with material injury by imports of GOES from China, the Czech Republic, Korea, and Russia that the US Department of Commerce determined are sold in the US at less than fair value and from China that Commerce has determined are subsidized.

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Chairman Meredith M. Broadbent, Vice Chairman Dean A. Pinkert, and Commissioners Irving A. Williamson, David S. Johanson, and F. Scott Kieff all negative, a vote that meant no tariffs or countervailing duties. Commissioner Rhonda K. Schmidtlein voted in the affirmative.

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