International Trade Mechanisms

An Overview of International Trade Mechanisms
David Wemhoff

As we all know, it is an election year, and there is a lot of rhetoric flying around. Various candidates for the United States Presidency are promising to restrict trade or change the term of trade deals. That seems to tap into and at the same time stir up dissatisfaction with international trade. So, this may be a good time to provide a little information about the mechanisms established by US law for conducting international trade and at the same time protecting American industries.

American businesses and organizations are very hardworking and productive, and recently the United States Secretary of Commerce Penny Pritzker honored 123 of these companies that export goods and services overseas during the 2016 President’s “E” Awards ceremony. The Department of Commerce blog reports that for “the first time in the award’s 54-year history, winners represent every state and the District of Columbia.”1 In addition, the Department of Commerce reported that the US exported $ 2.23 trillion worth of goods and services in 2015, and that about 11.5 million jobs are provided by US trade. All of this, and a lot more, would not be possible without the US International Trade Law and the necessary structures to regulate and insure its fair and smooth functioning.

Perhaps the foundational US trade laws are the Tariff Act of 1930, as amended, and the Trade Act of 1974, as amended, though a number of other laws and treaties have been added over the years to the legal regimen governing US trade. There are three bodies established by US law, in addition to the Office of the United States Trade Representative (USTR) who works directly for the President of the United States, that are very important in regulating international trade. First, there is the US International Trade Administration (ITA) and administrative agency which is part of the US Department of Commerce. Second, the US International Trade Commission (ITC) , an independent agency. Third, the US Court of International Trade (CIT) which is a court established under Article III of the US Constitution. What follows is a brief sketch of each of these three important entities.2

The ITA’s mission is threefold: to create “prosperity by strengthening the international competitiveness of U.S. industry, promoting trade and investment, and ensuring fair trade and compliance with trade laws and agreement.”3 The ITA does this by providing an enormous amount of important information to include data on exports, global markets, and quantitative as well as qualitative studies on various industries and opportunities. The ITA also makes available educational programs both in the US and abroad, and it helps businesses in a variety of practical ways which include determining the requirements for a “particular trade license, forms for an international license agreement or procedures to start a business in a foreign country.”4 The ITA works to promote and protect American businesses and works with each industry sector. An important part of the ITA’s work is to decide important issues in countervailing duty cases and in antidumping duty cases, namely whether there are subsidies provided by foreign governments to foreign companies or whether there are sales at less than fair value by foreign competitors, respectively.5

This is where the ITC comes into the picture in an important way. A quasi-judicial, bipartisan, and independent Federal agency, it has investigative powers that allow it to look into the effects of subsidized imports and dumped imports on US domestic industries as well as imports that may infringe intellectual property rights. A very important part of the ITC’s mission is to conduct what are called Section 337 proceedings or investigations into unfair import trade practices. This is a detailed procedure that begins with a complaint alleging the unfair practices, and proceeds in accordance with certain ITC rules and under the eye of an Administrative Law Judge. The ITC also gathers information and provides analysis that is related to the international trade policies of the US, and then submits this work to the President of the United States and to the USTR. Finally, on an administrative note, the ITC is led by six commissioners who serve nine year terms after appointment by the President and confirmation by the Senate, and the ITC’s budget is submitted directly to the Congress to further assure its independence.6

The CIT consists of nine judges appointed by the President and confirmed by the Senate, and its jurisdiction extends throughout the US with authorization to conduct hearings throughout this country and also in foreign countries. The CIT has exclusive subject-matter jurisdiction in a number of areas. These are actions commenced against the US, its agencies or its officers “arising from any law pertaining to revenue from imports, tariffs, duties or embargoes or enforcement of these and other customs regulations.” This involves things like “disputes regarding trade embargoes, quotas, customs classification and valuation country of origin determinations and denials of protests by the US Customs Service.” Clear in all of this is the CIT’s ability to review US international trade law. The CIT is allowed to review final agency determinations pertaining to countervailing duty matters and antidumping matters, to resolve disputes concerning the release of confidential business information, decisions to revoke or suspend custom broker licenses, and assistance for workers, businesses, and communities harmed by foreign imports. The CIT has all of the powers of a US District Court in fashioning the appropriate remedy, and, like all other US District Courts, adheres to a certain standard of review for the various cases before it.7

Needless to say there is a lot more that can be written of each of these three entities and of US international trade law. As many commentators have noted, international trade is a powerful and competitive force, and US laws and agencies certainly play an important role in regulating or controlling this force.

David Wemhoff is an attorney in South Bend, Indiana and Chairman of the International Trade and Customs Law Committee.

Endnotes
1“Showing the World that America is – and will remain – open for Business,” Tradeology, International Trade Administration, May 16, 2016.
2Ralph H. Folsom, Principles of International Trade Law (St Paul, Minnesota: West Academic Publishing, 2014), 57-62.
3“About the International Trade Association,” www.trade.gov as accessed May 18, 2016. 4Folsom, Principles of International Trade Law, 58-59; “About the International Trade Association”
5Id.
6“About the USITC,” www.usitc.gov, as accessed May 18, 2016; “Section 337 Investigations: Answers to Frequently Asked Questions,” US International Trade Commission (Pub. No. 4105, March 2009); Folsom, Principles of International Trade Law, 59.
7Folsom, Principles of International Trade Law, 58-60;”About the Court,” United States Court of International Trade, www.cit.uscourts.gov as accessed May 18, 2016.

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