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The United States Antidumping Act

Published online by Cambridge University Press:  28 March 2017

James Pomeroy Hendrick
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Extract

Enacted in 1921, the United States law on dumping in international trade was regarded at the time as a “model of draftsmanship.” Present-day technicians are content with its provisions, though they do not echo this encomium. But the reader who approaches the nine closely written pages of the law’s text for the first time is likely to find the experience rather terrifying. These nine pages can be roughly summarized as follows. The Act comes into operation when a foreign producer sells to United States importers at a price less than that which he charges purchasers in his own country, with resultant injury to United States industry. When this is the case, a dumping duty is assessed on the imports, measured by the price differential which has been found.

Type
Research Article
Information
American Journal of International Law , Volume 58 , Issue 4 , October 1964 , pp. 914 - 934
Copyright
Copyright © American Society of International Law 1964

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References

1 Antidumping Act, 1921, 46 Stat. 201 et seq.,19 U. S. C. 160 et seq.

2 Viner, Dumping, A Problem in International Trade 262 (1923).

3 The availability to United States industry of information as to foreign producers' prices will vary in individual cases. The Commissioner of Customs has no set rules as to how much detail he will expect from the domestic producer in order to be satisfied that he has a serious and not a frivolous request for processing of a case.

4 The procedure followed by the Customs officers (Customs is a Bureau which operates under the Secretary of the Treasury) is outlined in the Customs Regulations relating to the Antidumping Act, especially in 19 C.F.E. 14.6, 14.8.

5 Antidumping Act, 46 Stat. 201(b), 19 U.S.C. 160(b).

6 Regulations, 19 C.F.B. 14.9(b).

7 General Agreement on Tariffs and Trade, Art. VI, Sees. 1, 2. The text of Art. VI can be found in Antidumping and Countervailing Duties, General Agreement on Tariffs and Trade, Geneva, July, 1958, p. 163.

8 19 C.F.E. 14.7, footnote 15, which defined “fair value” to mean “foreign market value.” See note 20 below.

9 Treasury Decision (T.D.) 53773.

10 T. D. 55118.

11 United States adherence to GATT was subject to the proviso that where its law differed from Art. VI of GATT, its law could prevail. The amendments to the IT. S. regulations relative to fair value were adopted subsequent to United States adherence to GATT. Accordingly, they could be challenged if they imposed stricter standards than those theretofore in effect. But the fact is that, in determining when and how third country price is to be used as a basis for price comparison, they have imposed what have been considered more liberal standards than those set forth in GATT Art. VI.

12 Antidumping Act, Sec. 201(a), 19 TJ.S.C. 160(a). This case is reported in 27 Fed. Eeg. 7367 (1962).

13 The French rayon staple fiber case was reported in the Federal ERegister as follows: Determination of sales at less than fair value, 26 Fed. Reg. 1671 (1961); Determination of no injury, ibid.4428.

14 This case was reported in the Federal Register as follows: Determination of sales at less than fair value, 25 Fed. Reg. 6657 (1960); Determination of injury, ibid.9782; Finding of dumping, ibid.9945.

15 Yugoslav cement, 28 Fed. Beg. 41 (1963).

16 See Hearings before Committee on Ways and Means, House of Representatives. 85th Cong., 1st Sess., on H. B. 6006 (1957), p. 43

17 Customs Simplification Act of 1954, P.L. 768, Title III, 42 Stat. 11, Sec. 201.

18 T. D. 53773, cited note 9 above.

19 T. D. 55118, cited note 10 above.

20 As has been pointed out above (see note 8 above) “fair value” had from 1921 to 1955 been defined by regulation (the term is undefined in the law) to mean “foreign market value.” “Fair value” is the standard used in determining whether there is price discrimination. “Foreign market value” is the standard applied in measuring dumping duties. Sec. 205 of the Antidumping Act (19 IT. S. C. 164) had during this period defined “foreign market value” in terms of the home price or, if there was none, the third country price, which was “freely offered … to all purchasers.” This was construed to mean the highestamong varying home prices or (if applicable) third country prices at any given time. The 1955 amendment to the regulation (note 18 above) for the first time established a different standard for calculating fair value from that set forth in the law for calculating foreign market value. The 1958 amendment to the Antidumping Act (P.L. 85-630, 72 Stat. 584) in general brought the definition of foreign market value into conformity with the 1955 regulation definition of fair value. Removal of a further inconsistency between the two was accomplished by the 1960 amendment to the regulations (notes 10 and 19 above). See discussion in Eeport of Secretary of Treasury Humphrey on the Operation and Effectiveness of the Antidumping Act. Feb. 1, 1957, printed in Hearings before Committee on Ways and Means (1957), referred to in note 16 above, pp. 18, 19.

21 This is set forth in Sec. 14.7(b)(7) of the regulations.

22 This is implicit from example 4, footnote 15 to Sec. 14.7(a) of the regulations. It may be noted that the example will need to be revised if the 1964 proposed amendments to the regulations, referred to at the conclusion of this article, are adopted.

23 T.D. 53773, cited note 9 above, Sec. 14.7(b)(2).

24 See for example, German rayon staple fiber, 26 Fed. Beg. 3387 (1961); Belgian cement, ibid.1971; Japanese radio tubes, ibid.6276; Canadian nepheline syenite, 25 ibid.10442 (1960); German typewriters, 26 ibid.1413 (1961); Japanese clinical thermometers, 25 ibid.8384 (1960).

25 See Sec. 5, Customs Simplification Act of 1956, P.L. 927, 70 Stat. 943; Report of Secretary of the Treasury Humphrey, Feb. 1, 1957 (printed in Hearings before Committee on Ways and Means on H. E. 6006, referred to in note 16 above, p. 10).

26 Fed. Reg. 1413 (1961).

27 T.D. 55118, cited note 10 above.

28 Regulations, 19 C.F.E. 14.7(b)(2).

29 Regulations, 19 C.F.E. 14.7(b)(1). Among examples of allowances which were made because of circumstances of sale in cases involving importations prior to the July 5, 1960, amendment to the regulations, but which were denied as to importations received thereafter, are cases involving Portuguese cement, 26 Fed. Eeg. 6605 (1961), and Japanese clinical thermometers, 25 ibid.8384(1960).

30 As indicated in the footnotes, all Tariff Commission decisions have been published in the Federal Register except for a few in the time before the 1958 amendment to the law made this mandatory. In these exceptional cases publication was by press release.

31 French rayon staple fiber, 24 Fed. Reg. 10092(1959); Belgian rayon staple fiber, 26 ibid.4477(1961); French rayon staple fiber (1961) (note 13 above); Canadian cement, 24 ibid.10267(1960); Cuban rayon staple fiber, 26 ibid.4478(1961); German rayon staple fiber, ibid.6537.

32 French rayon staple fiber (1961) (note 13 above); Belgian rayon staple fiber (note 31 above); Cuban rayon staple fiber ﹛ibid.);German rayon staple fiber (ibid.).

33 French titanium dioxide, 28 Fed. Reg. 10467 (1963).

34 French titanium dioxide (note 33 above).

35 Cuban rayon staple fiber (note 31 above); German rayon staple fiber (ibid.); French titanium dioxide (note 33 above).

36 French titanium dioxide (ibid.).

37 French titanium dioxide (ibid.).The sales in the Australian chromic acid injury decision, 29 Fed. Reg. 2919 (1964) were described as “anticompetitive.“

38 Canadian vital wheat gluten,

39 Fed. Reg. 5921 (1964). By “dumping” the Commission is understood to have meant sales at less than fair value.

40 Belgian rayon staple fiber (note 31 above); French rayon staple fiber (1961) (note 13 above). For a fuller quotation of the Commission's language, see description of the French rayon staple fiber case given in the example cited in the text above of a case involving price discrimination but no injury.

41 Canadian cement (note 31 above).

42 Canadian nepheline syenite, 25 Fed. Reg. 8394 (1960).

43 Canadian vital wheat gluten (note 38 above).

44 East German potash, Tariff Commission press release dated Feb. 25, 1955; Finnish tissue paper, 23 Fed. Beg. 8891 (1958); Norwegian tissue paper, ibid.8892; French rayon staple fiber, 24 Hid.10092(1959); Canadian cement (note 31 above); Canadian nephelinesyenite (1960) (note 42 above); Canadian nepheline syenite (second case), 26 Fed. Reg. 956 (1961); Dominican cement, 27 ibid.3872 (1962); Australian cast iron soil pipe, 29 ibid.5253 (1964) (concurring opinion of two Commissioners). See reference to “predatory motives” in Viner, op. cit.note 2 above, p. 147.

45 Czech bicycles (note 14 above).

46 Australian chromic acid (note 37 above) (“triggered a price w a r “ ) ; Canadian steel reinforcing bars, 29 Fed. Reg. 2839 (1964) (depressed price levels from 9 to 24 percent).

47 Swedish cement, 26 Fed. Reg. 3002 (1961); Belgian cement, ibid.5102.

48 Swedish cement (note 47 above); Belgian cement ﹛ibid.);Portuguese cement, 26 Fed. Reg. 10010 (1961).

49 Australian chromic acid (note 37 above).

50 Canadian peat moss, 29 Fed. Reg. 4843 (1964); Australian cast iron soil pipe (note 30 above); Japanese titanium dioxide, 29 Fed. Reg. 5479 (1964).

51 Japanese titanium dioxide (note 50 above).

52 Canadian nepheline syenite (1961) (note 44 above).

53 French rayon staple fiber (1961) (note 13 above); Belgian rayon staple fiber (note 31 above); German rayon staple fiber (ibid.).

54 Czech sheet glass, 27 Fed. Reg. 11568 (1962).

55 Swedish cement (note 47 above); Australian chromic acid (note 37 above). However, the fact that the quantity of imports which entered at less than fair value was “substantial and growing” did not justify a positive determination where the other factors in the picture did not add up to what the Commission considered injury in the Canadian vital wheat gluten case (note 38 above).

56 French rayon staple fiber (1961) (note 13 above); Belgian rayon staple fiber (note 31 above); Cuban rayon staple fiber (ibid.);German rayon staple fiber (ibid.).

57 Dominican cement (second case), 28 Fed. Reg. 4047 (1963).

58 Canadian nepheline syenite (1961) (note 44 above); French titanium dioxide (note 33 above); Japanese titanium dioxide (note 50 above).

59 South African hardboard, Treasury Department press release, Dec. 27, 1957; Canadian hardboard, ibid.;French rayon staple fiber (1959) (note 31 above). The decision in the last-named case includes the following: “The domestic industry, in its written statement, discounted any basis for a finding that the industry is being or is likely to be injured in the circumstances of this case. The domestic producers further stated that for the industry to urge a finding of injury in this case would be only vindictive and that the Antidumping Act was intended to be preventive rather than punitive. The Commission agrees.“ It may be noted that in the South African hardboard case the foreign producer was a subsidiary of the major American producer. The regulations under the Antidumping Act do not limit institution of a dumping inquiry to cases where there has been complaint by American industry (19 C.F.E. 14.6).

60 Four European steel wire rod cases: Luxembourg steel wire rods, 28 Fed. Eeg. 6476 (1963); Belgian steel wire rods, ibid.6476; German steel wire rods, ibid.6006; French steel wire rods, ibid.7368 (1963). See also Japanese titanium dioxide, note 50 above.

61 United Kingdom cast iron soil pipe, Treasury Department press release, Oct. 27, 1955 (California); Swedish cement (note 47 above) (North Atlantic seaboard of 3 states); Belgian cement (ibid.)(East Coast of Florida); Dominican cement (1962) (note 44 above) (Puerto Rico and Metropolitan New York City); Dominican cement (1963) (note 57 above) (Metropolitan New York City); Australian chromic acid (note 37 above) (West Coast, accounting for 10 percent of domestic consumption); Canadian steel reinforcing bars (note 46 above) (Oregon and Washington, accounting for 5 percent of domestic consumption). 62 Four European steel wire rods eases (note 60 above).

63 Ibid.

64 Czech sheet glass (note 54 above).

65 ”The price spread between the [less than fair value] imports from France and domestic Ti02 is not governed by the ‘margin of difference’ determined by the Treasury for French Ti02.” French titanium dioxide (note 33 above). See also Australian chromic acid (note 37 above), where the foreign product undersold every domestic product on a “delivered price basis.” It is true that the “margin of difference“ is stated to be one of the ten different factors which the Commission “took into account“ in making its no-injury decisions in the European steel wire rod cases (note 60 above), but it seems reasonable to suppose that this margin at most would ordinarily be of secondary importance.

66 German pencil sharpeners, Treasury Department press release, Aug. 29, 1955; Finnish tissue paper (note 44 above); Norwegian tissue paper (ibid.); Czech sheet glass (note 54 above); Canadian vital wheat gluten (note 38 above).

67 South African hardboard (note 59 above); Canadian hardboard (ibid.); Finnish tissue paper (note 44 above); Norwegian tissue paper (ibid.);French rayon staple fiber (1961) (note 13 above); Belgian rayon staple fiber (note 31 above); German rayon staple fiber (ibid.); Cuban rayon staple fiber (ibid.); Canadian technical vanillin, 28 Fed. Keg. 4048 (1963).

68 German rayon staple fiber (note 31 above); Cuban rayon staple fiber (ibid.); cf. Eobinson-Patman law, 38 Stat. 730, 49 Stat. 1526, 15 U.S.C. 13, which provides that a seller may rebut a prima facie case of price discrimination in domestic commerce by “showing that his lower price … was made in good faith to meet an equally low price of a competitor.“

69 Four European steel wire rod eases (note 60 above).

70 Four European steel wire rod cases (note 60 above). Similarly, a no-injury decision was made in the Canadian vital wheat gluten case (note 38 above) where “the margin of difference was small and was not a significant factor in enabling the Canadian product to penetrate the domestic market.“

71 Czech bicycles (note 14 above) ; Australian chromic acid (note 37 above) ; Canadian steel reinforcing bars (note 46 above) (the import prices “grossly lower” than the domestic competition).

72 French rayon staple fiber (1959) (note 31 above); Canadian nepheline syenite (1961) (note 42 above). Classical economists, on the other hand, are inclined to view dumping as harmful only when it is sporadic. See, for example, Haberler, The Theory of International Trade 314 (1936): “Dumping is harmful only when it occurs in spasms and each spasm lasts long enough to bring about a shifting of production in the importing country which must be reversed when the cheap imports cease.“ Viner, op. cit.note 2 above, p. 140, is to the same general effect: “The chief menace of dumping from the point of view of the importing country arises out of intermittent or short-run dumping.“

73 In view of rail or trucking charges against the import from U. S. dock to points of delivery within the United States, the 2-cent differential would, for inland sales, be reduced or could disappear.

74 French titanium dioxide (note 33 above). The Japanese titanium dioxide case (note 50 above) involved similar facts.

75 See note 61 above.

76 United Kingdom cast iron soil pipe (note 61 above) (this was a 3-2 decision).

77 German pencil sharpeners (note 66 above).

78 Netherlands nicotine sulphate, Treasury Department press release, Aug. 29, 1955.

79 Finnish tissue paper (note 44 above); Norwegian tissue paper (ibid.).Similarly, in the Australian cast iron soil pipe case (ibid.),where imports were “insignificant compared with the quantity of domestic consumption and entered the United States market only over a short period of time.“

80 Norwegian tissue paper (ibid.).

81 Finnish tissue paper (ibid.).

82 See notes 77 to 81 above.

83 Czech bicycles (note 14 above).

84 South African hardboard (note 59 above); Canadian vital wheat gluten (note 38 above).

85 Czech bicycles (note 14 above); Swedish cement (note 47 above); Belgian cement (ibid.).

86 The Tariff Commission's mission, as set forth in Sec. 201(a) of the Antidumping Act is “ t o determine … whether an industry in the United States is being or is likely to be injured, or is prevented from being established, by reason of the importation of such merchandise into the United States.” “Such merchandise” refers to “ a class or kind of foreign merchandise” which the Treasury “determines … is being, or is likely to be, sold in the United States or elsewhere at less than its fair value.“ The Tariff Commission has passed on no eases so far involving the claim that an industry in the United States “ i s prevented from being established.“

87 Dominican cement (1963) (note 57 above). In the first (1962) Dominican cement case (note 44 above), the Commission had found ground to believe “ t h a t continued effort is being made on behalf of the parties concerned to avoid future sales at less than fair value.” In a later similar decision involving Canadian steel reinforcing bars (note 46 above), the Commission noted the potentially injurious imports were expected to increase if there was a negative decision. As in the 1963 Dominican cement case, the Commission found both the “capacity and incentive” for continuing sales at less than fair value.

88 Canadian cement (note 31 above); French rayon staple fiber (1959) (ibid.); French rayon staple fiber (1961) (note 13 above); Belgian rayon staple fiber (note 31 above); Canadian nepheline syenite (1960) (note 42 above); Canadian nepehline syenite (1961) (note 44 above); Canadian peat moss (note 50 above). These cases came to the Tariff Commission instead of being closed out by the Treasury Department without reference to the Commission on a “ p r i c e revision” basis because the quantities involved or differences in price had been considered “more than insignificant” within the meaning of Sec. 14.7(b)(8) of the regulations.

89 Canadian cement (note 31 above); Canadian nepheline syenite (1961) (note 44 above); French rayon staple fiber (1961) (note 13 above); Belgian rayon staple fiber (note 31 above); Dominican cement (1962) (note 44 above); Canadian vital wheat gluten (note 38 above).

90 French rayon staple fiber (1959) (note 31 above); French rayon staple fiber (1961) (Mid.);Belgian rayon staple fiber (ibid.); Canadian nepheline syenite (1961) (note 44 above); Dominican cement (1962) (ibid.).

91 Australian cast iron soil pipe (note 44 above).

92 French rayon staple fiber (1961 (note 13 above); Belgian rayon staple fiber (note 31 above); Dominican cement (1962) (note 44 above); German rayon staple fiber (note 31 above).

93 Antidumping Act, Sec. 201(a), 19 U.S.C. 160(a), provides that the “Commission shall determine within three months” after being advised by the Treasury Department of a determination of sales at less than fair value “whether an industry in the United States is being or is likely to be injured… . “

94 Canadian nepheline syenite (1960) (note 42 above). It may be noted that the Commission's rules of procedure are set forth in 19 C.F.B. 208.

95 See discussion on price revision cases in the text above in connection with Yugoslav cement.

96 This time period is used since the split of authority between the Treasury and the Tariff Commission became effective Oct. 1, 1954, and no Tariff Commission decisions were made until 1955.

97 See discussion on price revision cases above. Included in this group were cases in which shipments ceased. 98 29 Ted. Reg. 5474 (1964).

98 29 Ted. Eeg. 5474 (1964).