Remember a few weeks ago when Senator Arlen Specter asked Obama the following:
The first part of my question is, would you support more effective remedies to allow injured parties -- unions which lose jobs, companies which lose profits -- by endorsing a judicial remedy, if not in U.S. courts perhaps in an international court, and eliminate the aspect of having the ITC decisions overruled by the President -- done four times in 2003 to 2005, at a cost of a tremendous number of jobs on the basis of the national interest. ...
I was a little confused about which "international courts" he wanted to get involved, but perhaps a proposal he made last week clarifies some of his concerns (although the specific point about the President overruling the ITC may not be relevant here):
U.S. Senator Arlen Specter (D-Pa.) has introduced legislation that seeks to help domestic manufacturers by enforcing trade remedy laws. The Unfair Foreign Competition Act of 2010 provides a private right of action for domestic manufacturers injured by illegal subsidization or dumping of foreign products into U.S. markets.
Senator Bob Casey (D-Pa.) and Senator Sherrod Brown (D-Ohio) are cosponsors. The bill has been referred to the Senate Committee on Finance.
...
The Unfair Foreign Competition Act of 2010 would allow petitioning parties to bring a civil action in a U.S. district court for an injury finding in lieu of a determination by the International Trade Commission (ITC). Allowing petitioners to choose between the ITC and their local U.S. district court for the injury determination would give injured domestic producers the opportunity to serve as private plaintiffs in seeking enforcement of trade remedy laws. The nonpolitical venue would also alleviate the potential for inconsistencies and partisanship in enforcement remedies.
When I heard "private right of action," my first thought was that this would be a repeat of the 1916 Act, which was found to violate WTO rules. But at least from Specter's floor statement (I haven't seen the actual text yet), it seems to be something different:
Because current administrative remedies have not been consistently and effectively enforced, I am introducing private right of action legislation to enforce the law. My legislation would allow petitioners to choose between the ITC and their local U.S. district court for the injury determination phase of their investigation. Doing so gives injured domestic producers the opportunity as private plaintiffs to control the litigation in seeking enforcement of our trade laws. If injury is found, U.S. Customs and Border Protection would then assess duties on future importation of the article in question. The legal standard for determining dumping margins, established by the Commerce Department, would remain unchanged.
This legislation is similar to legislation I have introduced as far back as 1982 when I originally sought injunctive relief. But this bill has been modified to comply with World Trade Organization rules.
In December 2004, the United States took action to comply with WTO rulings on the Antidumping Act of 1916 which provided a private cause of action and criminal penalties for dumping by prospectively repealing the act. The United States also took action in February 2006 to comply with WTO rulings on the Continued Dumping and Subsidy Offset Act which requires the distribution of collected antidumping and countervailing duties to petitioners and interested parties in the underlying trade proceedings. In both cases, the WTO panel found that U.S. law allowed an impermissible specific action against dumping and subsidization.
The legislation I introduce today has been adapted to these changes in law and allows for a determination of injury in accordance with our international obligations. Aggressive policy measures, such as this legislation, are necessary to prevent foreign producers--China in particular--from causing a major crisis for our domestic producers.
In a nutshell, it seems that he wants anti-dumping/countervailing duty petitioners to have the option to bring the injury part of the case to a U.S. court, as opposed to the ITC, with the normal injury standards still applying. I suppose the thinking is that the ITC hasn't been tough enough with enforcement.
Is there really any reason to think that federal courts would be tougher? I suppose one key point is that companies would be able to go to their "local U.S. district court." Presumably the thinking is that some local favoritism would help achieve a positive result for the domestic industry.
At first glance, I don't see anything in the AD or SCM Agreements that prohibits this approach. As long as the district courts follow the relevant WTO rules, it should be OK. I suppose there could be an argument that it is problematic to shift decision-making to local authorities with a specific goal of getting a greater number of affirmative determinations (i.e., determinations that injury exists). And if the decisions that result turn out to exhibit a pattern of bias, that would also be a problem, although I'm not sure you could condemn the whole process on that basis (you may have to go after individual decisions).
I have no idea whether this proposed law has any real chance of passing.
