ANTIDUMPING AND 

COUNTERVAILING 

DUTIES

Key Challenges to 

Small and MediumSized Enterprises’ 

Pursuit of the 

Imposition of Trade 

Remedies

Report to Congressional Requesters

June 2013

GAO-13-575

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-575, a report to 

congressional requesters

June 2013

ANTIDUMPING AND COUNTERVAILING DUTIES

Key Challenges to Small and Medium-Sized 

Enterprises' Pursuit of the Imposition of Trade 

Remedies 

Why GAO Did This Study

The United States and many of its 

trading partners have enacted laws to 

remedy the unfair trade practices of 

other countries and foreign companies 

that cause or threaten to cause 

material injury to domestic producers

and workers. U.S. laws authorize the 

imposition of AD duties on certain 

imports that were dumped (i.e., sold at 

less than fair market value) and CV 

duties on certain imports subsidized by 

foreign governments. Commerce and 

ITC conduct AD/CV duty 

investigations, most of which are 

initiated based on petitions filed on 

behalf of a domestic industry. 

According to the U.S. Census, in 2010, 

small and medium-sized enterprises 

accounted for 45 percent of 

employment in the manufacturing 

sector.

GAO was asked to review SME’s 

pursuit of trade remedies. This report 

examines (1) the extent to which SMEs 

have petitioned for the imposition of 

AD/CV duties, (2) key challenges to 

SMEs’ ability to pursue the imposition 

of AD/CV duties, and (3) assistance 

provided by Commerce and ITC to 

help SMEs address these challenges. 

GAO examined petition data from ITC 

and interviewed petitioners, trade 

lawyers, trade association officials, 

academics, trade experts from the 

Congressional Research Service, and 

Commerce and ITC officials. In 

addition, GAO reviewed AD/CV duty 

petitions and reports.

What GAO Recommends

GAO is not making any 

recommendations. 

What GAO Found

Some small and medium-sized enterprises (SME)—which are defined by the 

Small Business Administration’s Office of Advocacy as independent businesses 

with fewer than 500 employees—have petitioned for the imposition of 

antidumping (AD) and countervailing (CV) duties to seek relief from unfair trade 

practices. Among the 56 petitions filed between 2007 and 2012, GAO found 21 

that included at least 1 SME petitioner. In addition, the 56 petitions represented a 

total of 147 petitioners, of which 38 were SMEs. The majority of these SME 

petitioners had annual sales revenue of at least $10 million. Close to half of the 

total SME petitioners were in the iron and steel industry. Since participation in the 

petitions is not mandatory, producers, including SMEs, may benefit from a 

successful petition even if they choose not to join as a petitioner.

Antidumping and Countervailing Duty Petitions and Petitioners, from 2007 through 2012

SMEs face three key challenges when pursuing the imposition of AD/CV duties: 

(1) high legal costs, (2) difficulty obtaining domestic and foreign pricing and 

production data, and (3) difficulty demonstrating industry support. Trade lawyers 

estimated that the cost of pursuing an AD or CV case during the petition and 

investigation phases can average between $1 million and $2 million and 

sometimes more, especially if the case involves multiple countries. It is often 

difficult for prospective petitioners to obtain domestic and foreign pricing and 

production data required by Department of Commerce (Commerce) and 

International Trade Commission (ITC) regulations and guidance. In addition, it 

can be difficult for prospective petitioners to demonstrate enough industry 

support to meet statutory requirements.

Commerce and ITC both have offices that provide information and assistance to 

SMEs to help them meet some of the administrative requirements and reduce

costs. Commerce has the authority to self-initiate an AD/CV duty investigation 

without a petition and has used this authority only once since 1991. According to 

Commerce officials, the Department uses this authority only when it has 

significant participation from the industry. Self-initiation would likely have little 

impact on SMEs’ overall costs since SMEs incur most costs during the 

investigation phase. Also, self-initiation could have adverse effects, including 

raising questions of whether the action was taken consistent with U.S. obligations 

under international trade agreements. View GAO-13-575. For more information, 

contact Lawrance Evans, Jr. at (202) 512-

4802 or EvansL@gao.gov.
Page i GAO-13-575 Trade Remedies

Letter 1 

Background 3

Some SMEs Have Petitioned for the Imposition of AD/CV Duties 

and Most SME Petitioners Had Annual Sales Revenue of at Least 

$10 Million 11

Three Key Challenges Impede SMEs’ Pursuit of the Imposition of 

AD/CV Duties 16

Commerce and ITC Assistance Can Help SMEs Address Key 

Challenges 21

Concluding Observations 25

Agency Comments 25

Appendix I Safeguards 27

Appendix II Objectives, Scope, and Methodology 29

Appendix III GAO Contacts and Staff Acknowledgments 33

Tables

Table 1: Products Represented in the Petitions Filed by Small and 

Medium-Sized Enterprise Petitioners, from 2007 through 

2012 14

Table 2: International Trade Commission Determinations and 

Presidential Determinations on Global and Chinese 

Safeguard Cases, from 2000 through 2012 28

Figures

Figure 1: Phases of the Antidumping and Countervailing Duty 

Process 10

Figure 2: Antidumping and Countervailing Duty Petitions and 

Petitioners, from 2007 through 2012 12

Figure 3: Distribution of Small and Medium-Sized Enterprise 

Petitioners by Product, from 2007 through 2012 13

Contents 
Page ii GAO-13-575 Trade Remedies

Abbreviations

AD antidumping

APO Administrative Protective Order 

CRS Congressional Research Service 

CV countervailing

ITC International Trade Commission

SME small and medium-sized enterprise

WTO World Trade Organization 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

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necessary if you wish to reproduce this material separately.
Page 1 GAO-13-575 Trade Remedies

441 G St. N.W.

Washington, DC 20548

June 25, 2013

The Honorable Sander M. Levin

Ranking Member

Committee on Ways and Means

House of Representatives

The Honorable Michael H. Michaud

House of Representatives

The United States and many of its trading partners have enacted laws to 

remedy the unfair trade practices of other countries and foreign 

companies that cause or threaten to cause material injury to domestic 

producers and workers. U.S. laws authorize the imposition of antidumping 

(AD) duties on certain imports that were dumped (i.e., sold at less than 

fair market value) and countervailing (CV) duties on certain imports 

subsidized by foreign governments. AD/CV duties are among the most 

commonly applied U.S. trade remedies. The U.S. Department of 

Commerce (Commerce) and the U.S. International Trade Commission 

(ITC) conduct AD/CV duty investigations, most of which are initiated 

based on petitions filed on behalf of a domestic industry. According to the 

U.S. Census, in 2010, small and medium-sized enterprises (SME)—

defined by the Small Business Administration’s (SBA) Office of Advocacy 

as independent businesses with fewer than 500 employees—accounted 

for 45 percent of employment in the manufacturing sector.1 Advocates for 

trade remedies contend that these remedies help ensure a level playing 

field in a global economy and mitigate the adverse impact of unfair trade 

practices on domestic industries and workers.

You requested that we review SMEs’ use of trade remedies. This report 

examines (1) the extent to which SMEs have petitioned for the imposition 

of AD/CV duties, (2) key challenges to SMEs’ ability to pursue the 

imposition of AD/CV duties, and (3) assistance provided by Commerce 

and ITC to help SMEs address these challenges. We also inquired about 

the use of safeguards—trade remedies that provide temporary relief from 

injurious surges of imports. Most ITC safeguard investigations are 

 

1

On its website, SBA’s Office of Advocacy defines an SME as an independent business 

with fewer than 500 employees. 

 
 

Page 2 GAO-13-575 Trade Remedies

conducted on the basis of a petition filed by a representative of a 

domestic industry. However, the ITC may be required to conduct 

investigations at the request of the President or U.S. Trade 

Representative, or upon resolution of the House Committee on Ways and 

Means or the Senate Committee on Finance. According to ITC officials, 

domestic industries may be less likely to seek imposition of safeguards 

than AD/CV duties because the imposition of safeguards requires 

Presidential approval and a consideration of the impact of relief on the 

national economic interest.

2 Therefore, we focus on AD/CV trade 

remedies in this report but include information on safeguards in appendix

I. Other trade remedies, such as those providing direct assistance to 

harmed domestic parties or addressing infringement of intellectual 

property, were outside the scope of our review.

To examine the extent to which SMEs have petitioned for the imposition 

of AD/CV duties, we analyzed ITC data on AD/CV duty petitions from 

2007 through 2012, which included information on companies that were 

petitioners and non-petitioners. To determine whether a company was an 

SME, we searched two databases of U.S. businesses—LexisNexis and 

Dun & Bradstreet—to determine the number of employees and whether a 

company was a subsidiary of a larger corporation.3 We designated a 

company as an SME if it had fewer than 500 employees and was not a 

subsidiary. We analyzed the ITC data to determine the number of SME 

petitioners and non-petitioners over the past 6 years. To identify key 

challenges to SMEs’ ability to pursue the imposition of AD/CV duties, we 

interviewed Commerce and ITC officials, three academics, 

representatives from two industry associations, six trade lawyers, two 

Congressional Research Service (CRS) trade experts, and two SME 

petitioners. We selected the academics, industry association 

representatives, and trade lawyers on the basis of recommendations from 

CRS trade experts and Commerce and ITC officials. Three of the six 

trade law firms we spoke with represented 38 percent of the 21 petitions 

with SMEs filed from 2007 through 2012. We contacted 18 SMEs who 

filed petitions, but only 2 volunteered to participate in our interview. To 

 

2

If ITC makes an affirmative injury determination and the President decides to impose a 

safeguard, the safeguard may take a few different forms including an increase or 

imposition of a duty, a tariff-rate quota, or a quantitative restriction on the subject imports.

3

LexisNexis is a subscription database that provides legal, government, business, and 

high-tech information sources. Dun & Bradstreet is a leading source of commercial 

information and insight on businesses. 
 

Page 3 GAO-13-575 Trade Remedies

examine assistance provided by Commerce and ITC to help SMEs 

address key challenges, we interviewed several of the same parties as for 

the prior objective. Finally, while conducting our work, we asked 

Commerce and ITC officials, CRS experts, and trade lawyers about the 

use of safeguards. See appendix II for further details of our objectives, 

scope, and methodology.

We conducted this performance audit from June 2012 to June 2013 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe the 

evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

U.S. laws authorize the imposition of AD/CV duties to remedy unfair trade 

practices of other countries and foreign companies that cause material 

injury (or threat thereof) to domestic industries, namely dumping (i.e., 

sales at less than fair market value), and countervailable foreign 

government subsidies.4 The AD/CV duty laws implement U.S. 

international obligations under the World Trade Organization (WTO) 

Agreement on Antidumping, and the Agreement on Subsidies and 

Countervailing Measures.5 Should the United States impose AD/CV 

duties on a product, the government of the exporting country may institute 

dispute resolution proceedings against the United States pursuant to the 

 

4

19 U.S.C. §§ 1671-71h, 1673-73h. 

5

See 19 U.S.C. §§ 1671-71h, 1673-73h; Agreement on Implementation of Article VI of the 

General Agreement on Tariffs and Trade 1994, Apr. 15, 1994, Marrakesh Agreement 

Establishing the World Trade Organization, Annex 1A, 1868 U.N.T.S. 201 (AD 

Agreement); and Agreement on Subsidies and Countervailing Measures, Apr. 15, 1994, 

Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1869 

U.N.T.S. 14 (CV Agreement). 

Background 

AD/CV Duty Laws
 

Page 4 GAO-13-575 Trade Remedies

WTO Understanding on Dispute Settlement if it believes that the United 

States has violated its obligations under the WTO agreements.6

• Antidumping duty.

7 AD duty law provides relief to a domestic industry 

that is materially injured, threatened with material injury, or whose 

establishment is materially retarded by reason of imports sold in the 

United States at less than fair value. The law provides relief by 

authorizing the imposition of an additional import duty on the dumped 

imports. U.S. trade law permits the imposition of AD duties if (1) 

Commerce determines that the imported goods are or are likely to be 

sold in the United States at less than fair value; and if (2) ITC 

determines that a U.S. industry is materially injured or threatened with 

material injury, or that the establishment of an industry in the United 

States is materially retarded, by reason of imports of that 

merchandise.

• Countervailing duty.

8 CV duty law provides a similar kind of relief to a 

domestic industry that is materially injured, threatened with material 

injury, or whose establishment is materially retarded by reason of 

imported goods that have received certain foreign government

subsidies. The law provides relief by authorizing the imposition of an 

additional import duty on the subsidized imports. U.S. trade law 

provides that CV duties will be imposed if (1) Commerce determines 

that the foreign government or any public entity within the foreign 

country is providing, directly or indirectly, a countervailable subsidy 

with regard to the manufacture, production, or export of the subject 

merchandise that is imported or sold (or likely to be sold) for 

importation into the United States; and (2) if in the case of 

merchandise imported from a Subsidies Agreement country, ITC 

determines that a domestic industry is materially injured or threatened 

with material injury, or that the establishment of a domestic industry is 

materially retarded, by reason of imports or sales for imports of those 

goods.9

 

6

Understanding on Rules and Procedures Governing the Settlement of Disputes, Apr. 15, 

1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 2, 1869 

U.N.T.S. 401. 

7

Statutory authority for the imposition of AD duties is found at 19 U.S.C. §§ 1673-1673h.

8

Statutory authority for the imposition of CV duties is found at 19 U.S.C. §§ 1671-1671h.

9

A Subsidies Agreement country is defined at 19 U.S.C. § 1671(b).
 

Page 5 GAO-13-575 Trade Remedies

The process for obtaining the imposition of an AD/CV duty generally 

involves petitioners and interested parties who support and oppose the 

petition, trade law firms, Commerce, and ITC. Petitioners and interested 

parties in support of the petition may include domestic manufacturers, 

producers or wholesalers, and certain unions and trade associations.10

Parties in opposition to the petition for the imposition of duties may 

include foreign exporters and producers, U.S. importers of the articles 

under investigation, and governments of the exporting countries.

11 Law 

firms that specialize in international trade frequently represent petitioners 

and the opposing parties before Commerce and/or ITC, the two agencies 

responsible for conducting AD/CV duty investigations. Commerce 

determines whether to initiate an AD or CV duty investigation after 

examining a petition filed on behalf of a domestic industry.12 Commerce 

conducts an investigation of dumping and/or subsidies while ITC 

simultaneously conducts a separate investigation of material injury to a 

domestic industry. Both Commerce and ITC make preliminary and final 

determinations before Commerce imposes an AD or CV duty.

According to Commerce, the process for determining whether to impose 

an AD or CV duty consists of two key phases: (1) petition and (2) 

investigation.

During the petition phase, a prospective petitioner gathers and presents 

information that might provide a reasonable basis for Commerce to 

believe that dumping or subsidization of a particular product might be 

occurring and causing or threatening material injury to a domestic 

industry, according to Commerce officials. Before deciding whether to 

petition for the imposition of AD/CV duties, the prospective petitioner 

considers the costs and benefits of doing so, including the time, 

administrative requirements, and legal costs associated with the process.

 

10U.S. law specifies that an AD or CV duty proceeding shall be initiated when an 

interested party files a petition. Specifically, sections 1671a and 1673a of Title 19 of the 

U.S. code state that a petition may be filed on behalf of an industry by an “interested party 

described in subparagraph (C), (D), (E), (F), or (G) of section 771(9) of the Act (19 U.S.C. 

§ 1677(9))”.

11Ibid.

12Commerce is also authorized by statute to self-initiate investigations. 19 U.S.C. §§ 

1671a, 1673a.

Key Actors in the AD/CV 

Duty Process

Phases of the AD/CV Duty 

Process

Petition Phase
 

Page 6 GAO-13-575 Trade Remedies

U.S. law specifies that the petition allege the elements necessary for the 

imposition of the AD or CV duty.13 Commerce and ITC regulations require 

prospective petitioners seeking the imposition of AD/CV duties to provide 

detailed information, which is reasonably available to the petitioner, in 

their petition to Commerce and ITC.14 This information includes the 

composition of the domestic industry, identity of importers, volume and 

value of production of the domestic like product by the petitioner and each 

U.S. producer, and information concerning material injury.15 Prospective 

petitioners are also required to include information such as the proportion 

of total exports to the United States that the petitioners believe each 

producer is selling at less than fair value or benefiting from 

countervailable subsidies accounted for during the most recent 12-month 

period. For AD duty petitions, prospective petitioners should provide 

pricing and cost information relevant to calculating dumping margins. For 

CV duty petitions, prospective petitioners should provide factual 

information relevant to the alleged countervailable subsidy. In addition, 

prospective petitioners must demonstrate that they have sufficient support 

from the domestic industry.16 

As prospective petitioners and their legal representatives contemplate 

whether or not to file a petition, they may request information or 

assistance from specialized offices within Commerce and ITC, described 

below:

• Commerce Import Administration’s Petition Counseling and Analysis 

Unit. Staff in this unit of Commerce’s International Trade 

Administration are available to help companies understand U.S. trade 

remedy laws dealing with dumping and countervailable foreign 

government subsidies and to provide technical assistance with 

 

1319 U.S.C. §§ 1671a, 1673a.

1419 C.F.R. §§ 207.11, 351.202.

1519 C.F.R. § 351,202. 

1619 U.S.C. §§ 1671a(c)(1)(A), 1673a(c)(1)(A). Regarding the determination of industry 

support, statutory language for initiating either an AD or CV investigation states that: “the 

administering authority shall determine that the petition has been filed by or on behalf of 

the industry if (i) the domestic producers or workers who support the petition account for at 

least 25 percent of the total production of the domestic like product, and (ii) the domestic 

producers or workers who support the petition account for more than 50 percent of the 

production of the domestic like product produced by that portion of the industry expressing 

support for or opposition to the petition.” 
 

Page 7 GAO-13-575 Trade Remedies

preparing and filing a petition. According to Commerce officials, the 

department budgeted about $440,000 plus agency overhead for the 

Petition Counseling and Analysis Unit in fiscal year 2012.

• ITC’s Office of Investigations and Trade Remedy Assistance Office. 

Office of Investigations staff are available to counsel all companies 

seeking assistance in understanding the injury phases of AD/CV duty 

investigations, and regularly provide technical assistance and 

prepetition counseling to all companies, including SMEs. According to 

ITC officials, the agency dedicated about $59,500 plus agency 

overhead for prepetition counseling and assistance in 2012. The

Trade Remedy Assistance Office was established to provide eligible 

small businesses, small trade and worker associations, and their 

representatives with additional information and support. According to 

ITC officials, the agency dedicated about $74,000 plus agency 

overhead for the Trade Remedy Assistance Office in fiscal year 2012.

Once a petition is filed, Commerce has sole authority to initiate or not 

initiate an investigation based on its examination of the petition. In the 20 

calendar days after a petition is filed, Commerce examines the proposed 

scope of the investigation, the domestic like product, industry support for 

the petition, the adequacy of the dumping or subsidy allegation(s), and 

the information provided to demonstrate injury, according to Commerce 

officials. If Commerce decides not to initiate an investigation at this point, 

the case is closed.

During the investigation, Commerce sends a questionnaire to selected 

foreign producers and exporters (and the foreign government, in the case 

of a CV duty investigation), to collect information for its determination of 

whether imports are being dumped or subsidized. Commerce issues

supplemental questionnaires as needed, to clarify certain information or 

obtain additional information. To establish the adequacy and accuracy of 

information submitted in response to questionnaires and other requests 

for information, Commerce conducts an on-site examination of the 

records of the party that provided the information and interviews company 

personnel who prepared the questionnaire responses and are familiar 

with the sources of the data in the responses. Commerce uses the 

information obtained to determine the appropriate amount of duty. 

According to Commerce, the agency may hold a hearing, upon request,

to provide parties with an opportunity to express positions and respond to 

agency questions about factual and legal issues in the case.

Investigation Phase 
 

Page 8 GAO-13-575 Trade Remedies

During its simultaneous investigation, ITC sends out separate, detailed 

questionnaires to collect trade, pricing, and market data from all U.S. 

producers, U.S. importers, and foreign producers of the product under 

investigation to determine whether these imported goods are causing 

material injury to the domestic industry. These questionnaires ask 

responding U.S. producers to indicate whether they support, oppose, or 

take no position on the petition. According to ITC officials, all data 

submitted by firms in questionnaires are treated as business proprietary, 

and thus, individual producer responses with regard to support of the 

petition are confidential. During the investigation, ITC holds a hearing that 

allows petitioners, other domestic producers, and opposing parties, who 

are typically represented by legal counsel, to express their position on the 

case and respond to questions that ITC Commissioners may have about 

factual information or legal issues in the case. Some parties within an 

industry may not support a petition for an AD/CV duty or at least not 

publically support a petition for a variety of reasons. For example, the 

product under investigation may be an input used by a domestic 

manufacturer or the distributor may represent domestic and foreign 

producers.

Once a petition is filed, the length of time for completing an AD/CV duty 

investigation can range from 205 to 420 days, depending on whether it is 

an AD, CV, or joint AD/CV duty investigation, and the number of 

extensions applied as permitted under U.S. law. Generally, ITC makes a 

preliminary decision regarding material injury within 45 days after a 

petition is filed. If the ITC preliminary decision is negative, the 

investigation is terminated. If the ITC determination is affirmative, 

Commerce generally makes a preliminary decision regarding whether 

imports are being dumped or subsidized within 140 days after initiation for 

an AD duty case and 65 days for a CV duty case. Even if Commerce 

makes a negative preliminary decision, the investigation continues until 

Commerce makes its final decision, generally within 75 days of its 

preliminary decision. If Commerce’s final decision is negative, then the 

investigation is terminated and no further investigative action is taken by 

either agency. If Commerce’s final decision is affirmative, ITC generally 

makes a final injury decision within 45 days. If ITC’s final decision is 

affirmative, Commerce issues an AD/CV duty order within 7 days. 
 

Page 9 GAO-13-575 Trade Remedies

Figure 1 shows the petition and investigation phases of the AD/CV duty 

process and the associated time frames.17

 

17Once an order has been issued both petitioners and opposing parties have the ability to

appeal the findings of the agencies and request administrative reviews. According to trade 

lawyers and an SME petitioner, continued use of trade lawyers during this period may 

contribute to additional legal costs. 
 

Page 10 GAO-13-575 Trade Remedies

Figure 1: Phases of the Antidumping and Countervailing Duty Process

Note: This figure shows generalized time frames for the investigation process, which may be 

extended or expedited under certain circumstances. See 19 U.S.C. §§ 1671a-71e, 1673a-73e.
 

Page 11 GAO-13-575 Trade Remedies

Our analysis showed that some SMEs petitioned for the imposition of 

AD/CV duties to seek relief from unfair trade practices; over the past 6 

years, about one-third of the petitions for AD/CV duties listed SME 

petitioners and about a quarter of the total number of petitioners were 

SMEs.18 As figure 2 (left) shows, from 2007 through 2012, a total of 56 

petitions were filed for the imposition of AD/CV duties. Of these, 21 

petitions (38 percent) listed at least one SME petitioner, with 8 petitions 

listing only SME petitioners, and 13 petitions listing both SME and nonSME petitioners. The majority of the petitions (36 petitions, or 63 percent 

of the 56 total) represented non-SME petitioners. As figure 2 (right) 

shows, SMEs represented about a quarter of the 147 petitioners named 

in the 56 petitions filed for the imposition of AD/CV duties from 2007 

through 2012. Of these 147 petitioners, 38 (26 percent) were SMEs.

 

18In response to our request, ITC gathered the investigation numbers and case names of 

all AD/CV duty petitions filed during the time period of January 2007 through June 2012 

from a publicly available ITC website. ITC then collected the names and locations of the 

U.S. producers, the harmonized tariff schedule (HTS) codes for the products, and 

information on whether a producer was a petitioner based on the corresponding public ITC 

report for each petition. We obtained employment and sales revenue data from business 

databases, not from ITC questionnaires or reports. Since AD and CV duty petitions may 

be filed in a single document, we counted an AD and a CV duty petition filed at the same 

time for one product as one petition. Of the 56 petitions, approximately 66 percent 

included AD and CV duty petitions filed together, while the remaining 34 percent were 

either an AD or a CV duty petition filed separately. Once a petition is filed, it can lead to an 

affirmative or negative decision, it can be withdrawn such as in circumstances where a 

settlement is reached between the relevant parties, or the investigation can be suspended 

by Commerce. We did not include any petitions that were filed during this time period but 

were later withdrawn.

Some SMEs Have 

Petitioned for the 

Imposition of AD/CV 

Duties and Most SME 

Petitioners Had 

Annual Sales Revenue 

of at Least $10 Million

SMEs Were Listed on a 

Third of the Petitions for 

AD/CV Duties and 

Represented a Quarter of 

Petitioners over the Past 6 

Years
 

Page 12 GAO-13-575 Trade Remedies

Figure 2: Antidumping and Countervailing Duty Petitions and Petitioners, from 2007 

through 2012

The majority (21) of the 37 SME petitioners, for whom we had data on 

annual sales revenue, had annual sales revenue of at least $10 million. 

Two of the 21 SME petitioners had annual sales revenue of at least $50 

million.19 In contrast, 3 SME petitioners had annual sales revenue of 

under $1 million.

Close to half (17) of the 38 SME petitioners were in the iron and steel 

industry (see fig. 3). Similarly, close to half (54) of the 109 non-SME 

petitioners (i.e., those petitioners that did not meet the SBA criteria) were 

also in the iron and steel industry.20 SME petitioners in the iron and steel 

 

19We were able to obtain annual sales revenue data for 37 of the 38 SME petitioners from 

the LexisNexis and/or Dun & Bradstreet business databases. When sales revenue 

numbers were available in both LexisNexis and Dun & Bradstreet, but did not match, we 

designated the petitioners to a category (at least $10 million, at least $50 million, and

under $1 million) only when the sales revenues fell in the same category according to both 

databases. This methodology helped us avoid over-counting the number of petitioners in 

a category because we counted petitioners only if both sources supported the 

categorization. For example, we did not count 5 petitioners with sales revenue of below 

$10 million according to one database but at least $10 million according to the other 

database. When sales revenue numbers were available in either LexisNexis or Dun &

Bradstreet but not in both, we used that database to designate the petitioners to a 

category (at least $10 million, at least $50 million, and under $1 million).

20We used the harmonized tariff schedule (HTS) codes in the database ITC provided in 

response to our request to group the products. Specifically, we aggregated the products at 

the 2-digit level. We combined HTS Chapter 72 (“Iron and Steel”) and HTS Chapter 73 

(“Articles of Iron and Steel”) in one category that we called “iron and steel.” 

The Majority of SME 

Petitioners Had Annual 

Sales Revenue of at Least 

$10 Million and Close to 

Half Were in the Iron and 

Steel Industry
 

Page 13 GAO-13-575 Trade Remedies

industry included producers of steel garment hangers, steel nails, drill 

pipes, and welded stainless steel pressure pipes. Other SME AD/CV duty 

petitioners included producers of wood products, aluminum products, and 

machinery, among other things. Table 1 lists the products included in the 

petitions filed by SME petitioners from 2007 through 2012.

Figure 3: Distribution of Small and Medium-Sized Enterprise Petitioners by Product, 

from 2007 through 2012

Note: “Other” includes different types of products such as matchbooks, carrier bags, and woven 

sacks.
 

Page 14 GAO-13-575 Trade Remedies

Table 1: Products Represented in the Petitions Filed by Small and Medium-Sized Enterprise Petitioners, from 2007 through 

2012

Product group Products

Number of

SME petitioners

Other Matchbooks from India 1 

Certain sodium and potassium phosphate salts from China 1 

1-Hydroxyethylidene-1,1-diphosphonic acid (HEDP) from China and India 1 

Polyethylene retail carrier bags from Indonesia, Taiwan, Vietnam 1 

Laminated woven sacks from China 1 

Subtotal (5) 

Iron and steel Circular welded pipe from China 1 

Drill pipe from China 2 

Light-walled rectangular pipe and tube from China, Korea, Mexico, and Turkey 3 

Steel garment wire hangers from Taiwan and Vietnam 3 

Steel nails from the United Arab Emirates 1 

Steel nails from China 2 

Steel wire garment hangers from China 2 

Welded stainless steel pressure pipe from China 1 

Galvanized steel wire from China and Mexico 2 

Subtotal (17) 

Wood Multilayered wood flooring from China 5 

Subtotal (5) 

Machinery Large power transformers from Korea 2 

Raw flexible magnets from China and Taiwan 1 

Ni-Resist piston inserts from Argentina and Korea 1 

Tow-behind lawn groomers from China 1 

Subtotal (5)

Aluminum Aluminum extrusions from China 4 

Subtotal (4) 

Furniture Wire decking from China 2 

Subtotal (2)

Total 38

Source: GAO analysis based on ITC data.
 

Page 15 GAO-13-575 Trade Remedies

Producers of goods under investigation, including SMEs, can benefit from 

successful AD/CV duty petitions even if they are not petitioners. 

Producers may support the petition but choose not to join as petitioners to 

avoid bearing the cost, including petition preparation and representation 

throughout the proceeding.21 In some cases individual petitioners may 

cover all or most of the legal costs, thereby sparing co-petitioners from 

paying for any or much of the cost. Additionally, according to Commerce, 

it is possible that some non-petitioners may support the petition by 

assuming some of the cost. Trade remedy duties add to the price of 

foreign imports and can benefit domestic producers of the competing like 

products, regardless of whether or not they choose to be petitioners. 

When deciding whether to become a petitioner, a producer weighs the 

expected benefits against the cost, according to our literature review and 

interviews we conducted with experts. For a producer with a small share 

of the market, the expected benefits from a successful petition might be 

small, leading to a stronger incentive not to share the cost by becoming a 

petitioner. Petitioners also have to weigh the benefit against the cost of 

having additional producers join as petitioners.22 For example, more 

petitioners could help an industry obtain greater resources to use for 

advocacy and increase the likelihood of a successful petition, but having 

more petitioners would also require more effort and cost.

It is difficult to measure the extent to which non-petitioners, including 

SMEs, have benefited from successful AD/CV duty petitions without 

knowing either how producers allocated the cost among themselves or 

the specific reasons why certain producers chose not to be named on a 

petition. Those reasons could include the fear of retaliation from 

internationally active producers and not wanting to share the cost, as 

discussed earlier. Public ITC reports do not disclose the position of the 

non-petitioning domestic producers, unless a non-petitioning producer 

has publicly disclosed that information. However, we can estimate the 

maximum number of producers who may have benefited from a duty 

associated with a successful petition without becoming a petitioner, by 

calculating the share of non-petitioners within the industry and assuming 

 

21While firms can choose whether to be named on a petition, ITC sends questionnaires to 

all U.S. producers of the goods under question. Completion of the questionnaire is 

mandatory so non-petitioners will incur some cost as company resources are needed to 

complete the questionnaire. 

22Olson, Kara M. “Free Riders Among the Rent-Seekers: A Model of Firm Participation in 

Antidumping Petitions.” American University (2004).

Producers Can Benefit 

from Trade Remedies Even 

If They Do Not File a 

Petition 
 

Page 16 GAO-13-575 Trade Remedies

that all non-petitioners benefit from successful petitions without having to 

share the cost. As discussed earlier, ITC typically sends questionnaires to 

all producers (petitioners and non-petitioners) in the industry during its 

material injury investigation. Of the 93 SMEs surveyed by ITC for the 

petitions filed from 2007 through 2012, 38 were petitioners and 55 were 

non-petitioners. These 55 non-petitioners represent the maximum number 

of producers that may have benefited from the duty without having to sign 

on as petitioners and share the cost.

Knowledgeable parties we interviewed—including Commerce and ITC 

officials, three academics, representatives from two industry associations, 

six trade lawyers, two Congressional Research Service trade experts, 

and two SME petitioners—identified key challenges to SMEs’ ability to 

pursue the imposition of AD/CV duties. The challenges most frequently 

cited were (1) high legal costs, (2) difficulty obtaining domestic and 

foreign pricing and production data, and (3) difficulty demonstrating 

industry support. Other challenges cited less frequently included fear of 

retaliation and lack of knowledge regarding AD/CV duties.23

Legal costs associated with pursuing an AD/CV duty case are a key 

challenge for SMEs. Agency officials and trade lawyers we spoke with 

stated that it is expensive for SMEs to pursue AD/CV duty cases because 

the process generally involves trade lawyers. Five of the six trade lawyers 

we interviewed roughly estimated that the average legal cost for pursuing 

an AD or CV duty case from petition through the investigation was 

between $1 million and $2 million, with approximately 70 to 75 percent of 

the cost incurred during the investigation phase.24 One trade lawyer 

stated that the average cost for pursuing a case could be considerably 

more than $2 million, depending on the complexity of the case or whether 

it involves multiple countries. According to agency officials, prospective 

 

23We selected knowledgeable parties to interview on the basis of their expertise and to 

represent the range of interested parties in the area of AD/CV duties; however, they did 

not constitute a representative sample developed through a comprehensive or systematic 

selection process.

24To obtain information on legal costs, we asked representatives from each of the six 

trade law firms for a range of the approximate costs of pursuing AD/CV duties. One 

declined to respond and the remaining five offered estimates rather than examples of 

actual fees charged to clients.

Three Key Challenges 

Impede SMEs’ Pursuit 

of the Imposition of 

AD/CV Duties

Legal Services Provided 

during the Petition and 

Investigation Phases Are 

Costly 
 

Page 17 GAO-13-575 Trade Remedies

petitioners are not required to hire a trade lawyer to file a petition, but 

legal representation is advantageous because trade lawyers can obtain 

confidential information from multiple domestic producers and foreign 

respondents and have the expertise to guide a case through the 

investigation phase. Trade lawyers or authorized representatives also 

have the ability to obtain confidential information collected by Commerce 

or ITC by entering that agency’s Administrative Protective Order (APO)

system.25 A company would not be able to obtain this information 

because producers typically seek to protect their pricing and production 

data from disclosure to their competitors. In addition, trade lawyers or 

other representatives are able to provide advocacy and guidance through 

the often complicated proceedings before Commerce and ITC. For 

example, trade lawyers advocate for their clients and challenge those 

who oppose the case at public ITC hearings where ITC Commissioners 

ask witnesses numerous detailed questions to gather more information. 

Commerce officials were only aware of one instance where a petitioner 

did not hire a trade lawyer until the investigation phase. In this case, the 

officials said the petitioner was the sole producer in its industry.

Legal costs may be incurred during each phase of an AD/CV duty 

investigation, as well as after the investigation is completed. 

Representatives from all six trade law firms we spoke with told us that the 

overall legal cost of pursuing an AD/CV duty varies according to the 

nature of the case. Factors affecting the overall cost include the number 

of respondent countries and companies, the complexity of the case, the 

number of products involved, and how much data are available. In 

addition to the costs associated with pursuing a case through the petition 

and investigation phases, additional costs may be incurred after the 

completion of a case during appeals and administrative reviews. For 

example, SMEs may hire a trade lawyer to represent them if the final 

Commerce or ITC determination is appealed to the U.S. Court of 

 

25An APO is a legal mechanism that controls the limited disclosure of business proprietary 

information to interested parties. Since most foreign respondents in AD/CV duty 

investigations typically request (and receive) business proprietary treatment of their 

sensitive price, cost, and financial information, interested parties without access to 

proprietary information under an APO would only be able to review information that is on 

the public record of the proceeding. Only representatives of interested parties are 

permitted access to business proprietary information under an APO. The APO prevents 

companies from receiving each other’s sensitive information during the course of AD/CV 

duty proceedings. Therefore, members of the U.S. industry could not obtain APO access 

themselves and would require legal counsel (or similar representation) to review this 

information and comment effectively on the industry’s behalf. 
 

Page 18 GAO-13-575 Trade Remedies

International Trade, or further appealed from that court to the U.S. Court 

of Appeals for the Federal Circuit. SMEs may also use trade lawyers to 

assist with any requested yearly administrative reviews of a case, which 

determine the final amounts of duties owed on past imports and set new 

duty deposit rates for future imports. Trade attorneys look at a range of 

trade remedy options to potentially address a trade issue, and may advise 

potential petitioners that seeking the imposition of an AD/CV duty is not in 

their best interest.

Petitioners are generally responsible for paying their legal costs, and the 

amount each entity pays depends on the particular circumstances of the 

case. Two trade lawyers we spoke with stated that in some instances, 

petitioners may agree to allocate costs according to each petitioner’s 

share of production in the given industry. Another trade lawyer explained 

that a petitioner with higher revenue may assume most or all the costs. 

One SME petitioner we spoke with said that his company covered the 

majority of costs associated with its case because it was the largest 

producer in a small industry composed of relatively few other companies. 

In some instances, outside sources such as trade associations may cover 

some of the costs. For example, a trade association representative 

shared an example of a case where the association financed legal costs 

using Continued Dumping and Subsidy Offset Act distributions from a 

previous case.26

During the petition and investigation phases, it is often difficult for 

prospective petitioners to obtain domestic and foreign pricing and 

production data required by Commerce and ITC regulations and 

guidance. Both Commerce and ITC post guidance on their websites to 

help prospective petitioners understand the types of data required for a 

petition and the manner in which it should be presented and organized. 

Petitioners are required to provide general data such as their name, 

 

26Between fiscal years 2001 and 2004, the Continued Dumping and Subsidy Offset Act 

(CDSOA) provided over $1 billion funded from AD/CV duties to U.S. companies deemed 

injured by unfair trade. Some supporters of the act asserted that CDSOA helped U.S. 

companies compete in the face of continuing unfair trade. Some opponents, however, 

asserted that CDSOA recipients received a large, unjustified windfall from the U.S. 

Department of the Treasury. Eleven WTO members initiated dispute resolution 

procedures concerning CDSOA. The WTO Dispute Settlement Body (DSB) concluded that 

CDSOA was not consistent with the WTO agreements, and Congress subsequently 

repealed the act.

Pricing and Production 

Data Required during the 

Petition and Investigation 

Phases Are Difficult to 

Obtain
 

Page 19 GAO-13-575 Trade Remedies

address, and some background information describing the extent of their 

involvement in the industry. In addition, they must state whether they 

have filed within the past 12 months, are now filing, or are planning to file 

for other forms of import relief involving the good in question. Several 

types of pricing, production, and injury data are also required for the 

submission of a petition, as follows:

• Pricing data: For a CV duty case, prospective petitioners must provide 

reasonably available information regarding the law, regulation, or 

decree under which the alleged countervailable subsidy is provided 

along with the value of the subsidy to the exporters or producers of 

the subject merchandise. For an AD duty case, prospective petitioners 

must provide reasonably available data relevant to the calculation of 

the U.S. price of the merchandise and the normal value of the foreign 

like product.

• Production data: Prospective petitioners must provide a detailed 

description of the imported merchandise, which should include the 

classification of the merchandise in the Harmonized Tariff Schedule of 

the United States. In addition, to the extent reasonably available to 

them, prospective petitioners should provide the names, addresses, 

and telephone numbers of the foreign producer(s) and exporter(s) 

believed to be selling the good at less than fair value or benefiting 

from a countervailable subsidy. These data must also include the 

volume and value of each firm’s exports of the merchandise to the 

United States. The same data are required of the firms believed to be 

importing the merchandise into the United States, to the extent that it 

is reasonably available. Prospective petitioners should also provide 

data on domestic production of the merchandise in question and 

information relating to the degree of industry support for the petition.

• Injury data: The petition should contain data to support the allegation 

that a domestic industry has been materially injured, or threatened 

with material injury, as a result of the alleged unfair imports. As a part 

of the injury data, each prospective petitioner should list all sales and 

revenues lost resulting from the alleged unfair imports during the 3 

years preceding the filing of the petition. 

Collecting and reviewing detailed pricing and production data during the 

petition and investigation phases places an administrative burden on 

SMEs. SMEs have fewer employees than larger firms and generally lack 

the expertise needed to take on the additional tasks of data collection, 

according to agency officials. Representatives from all six law firms and 

agency officials we spoke with agreed that SMEs face challenges when 
 

Page 20 GAO-13-575 Trade Remedies

collecting the pricing and production data for a petition because the data 

required are extensive and difficult to obtain. An SME petitioner explained 

that his company employed legal counsel because his company lacked 

the resources and expertise required to research and gather the data 

required to file a petition. The SME petitioner further explained that it is 

particularly difficult to collect and review domestic and foreign pricing 

data, which are composed of several inputs—such as electricity, water, 

and raw materials—whose price varies based on geographic location. 

One trade lawyer we spoke with hired Chinese nationals to assist with 

data collection for AD/CV duty cases involving China.

Petitioners also face an administrative burden during AD/CV duty 

investigations. For example, they are required to respond to detailed ITC 

questionnaires that collect the trade, pricing, and financial data ITC uses 

in making its determination of whether a domestic industry is materially 

injured by reason of the imports under investigation. According to ITC 

officials, the questionnaire is comprehensive and takes approximately 50 

hours to complete, which may place a strain on SMEs’ limited resources. 

Two trade lawyers noted that during the investigation phase they review 

data collected by Commerce from foreign respondents. For example, a 

trade lawyer may conduct research leading to a discovery that data 

reported by a foreign producer may not be accurate. In such an instance, 

the trade lawyer may ask Commerce to send a supplemental 

questionnaire to collect additional data from the foreign producer. 

According to Commerce officials, this information is important because 

Commerce uses data in the questionnaire to calculate whether there is 

dumping or countervailable subsidization and at what level. Trade lawyers 

also help petitioners determine the precise description of the imported 

goods, which according to Commerce, it uses to ascertain the scope of 

an investigation. For example, a 2010 AD order on seamless refined 

copper pipe and tube from China and Mexico defined the product very 

narrowly as “seamless circular refined copper pipes and tubes, including 

redraw hollows, greater than or equal to 6 inches (152.4mm) in length 

and measuring less than 12.130 inches (308.102 mm) (actual) in outside 

diameter...” The scope definition went on to define the product with even 

greater specificity.27

 

27See “Seamless Refined Copper Pipe and Tube from Mexico and the People’s Republic 

of China: Antidumping Duty Orders and Amended Final Determination of Sales at Less 

Than Fair Value from Mexico,” 75 Fed. Reg. 71070 (Nov. 22, 2010).
 

Page 21 GAO-13-575 Trade Remedies

It can be difficult for prospective petitioners to garner sufficient support 

from other producers to demonstrate to Commerce that the petition will 

meet the statutory requirement of industry support. A petition meets this 

requirement if the domestic producers or workers who support the petition 

account for (1) at least 25 percent of the total production of the domestic 

like product, and (2) more than 50 percent of the production of the 

domestic like product produced by that portion of the industry expressing 

support for, or opposition to, the petition.28 According to four trade lawyers 

and agency officials, it can be difficult for SMEs in an industry with 

numerous producers to organize themselves in order to meet the 

statutory requirement for industry support. For example, SMEs in 

geographically dispersed industries with numerous producers—such as 

aquaculture and agriculture—may need to coordinate with hundreds of 

domestic producers to obtain the support required for their petition. SMEs 

may form an industry association to help them coordinate and establish 

support for a petition. For example, several hundred shrimp producers 

formed the Coalition of Gulf Shrimp Industries to file a petition on behalf 

of their industry.29 These producers would have had more difficulty 

undertaking the necessary steps to file a petition if they had remained an 

unorganized, geographically dispersed collection of individual companies, 

according to an SME petitioner from the coalition.

Both Commerce and ITC have staff that respond to inquiries and provide 

information and assistance to SMEs to relieve some of the administrative 

challenges and costs of filing a petition. Commerce and ITC officials 

stated that much of the assistance they provide involves helping SMEs 

obtain the data needed to file a petition and reviewing draft petitions. If a 

 

2819 U.S.C. §§ 1671a, 1673a.

29The domestic producers supporting the petitions accounted for the vast majority of 

domestic production; they represented the industry across the coastal states of Alabama, 

Florida, Georgia, Louisiana, North Carolina, Mississippi, South Carolina, and Texas. 

Demonstrating Industry 

Support for a Petition to 

Commerce Can Be 

Difficult

Commerce and ITC 

Assistance Can Help 

SMEs Address Key 

Challenges 

Commerce and ITC Staff 

Help SMEs Obtain Data 

Required to File a Petition 

and Review Draft Petitions
 

Page 22 GAO-13-575 Trade Remedies

petition does not establish that it has the support of domestic producers 

or workers accounting for more than 50 percent of total domestic 

production, after a petition is filed Commerce staff will send a polling 

questionnaire to domestic producers tailored to the product and industry 

in question, or rely on other information, to determine if the original 

support criterion is met.30 According to Commerce officials, in cases 

where the industry is dispersed, they can provide assistance to petitioners 

in their efforts to form a coalition. For example, after discussing options 

with Commerce, the numerous shrimp fishing companies and processers 

formed an association that enabled them to file six AD petitions in 2004, 

according to Commerce officials and a representative for shrimp 

producers.31 Officials from both Commerce and ITC also stated that staff

are on hand to help SMEs obtain publically available data. For example, if

prospective petitioners do preliminary work and data gathering with the 

assistance of Commerce staff in advance of hiring law firms, this may 

reduce legal costs, according to Commerce officials. In addition, officials

from both agencies stated that they frequently review draft petitions and 

comment on how the petitions can be improved to ensure that they 

include all the required detailed data to support initiation of an AD/CV 

duty investigation. According to officials from both Commerce and ITC, 

the assistance they provide during pre-petition counseling can help 

reduce the amount of time that trade lawyers would otherwise bill to the 

client.

 

30Commerce will poll the domestic industry to determine if the domestic producers or 

workers who support the petition account for (1) at least 25 percent of the total production 

of the domestic like product, and (2) more than 50 percent of the production of the 

domestic like product produced by that portion of the industry expressing support for, or 

opposition to, the petition. 19 U.S.C. §§ 1671a(c), 1673a(c). 

31According to Commerce officials, the agency counts each petition filed against each 

country as an individual, separate petition. While certain general information (scope, 

industry support, and injury) will be the same, the allegation of dumping and/or 

subsidization must be specific to the pricing and evidence of subsidization in that country.
 

Page 23 GAO-13-575 Trade Remedies

U.S. law authorizes Commerce to initiate an AD/CV duty investigation 

without a petition, but according to Commerce officials, the department 

reserves the use of this authority to special circumstances consistent with 

international trade agreements.32 Commerce has used this authority once 

since 1991, under special circumstances. In 1991, when Canada 

unilaterally terminated a 1986 trade agreement with the United States, 

Commerce self-initiated a softwood lumber investigation.33 The United 

States and Canada had entered into an agreement in 1986 regarding the 

importation of softwood lumber that required the U.S. industry to withdraw 

its CV duty petition and Commerce to terminate its ongoing CV duty 

investigation. According to Commerce officials, because the initiation of 

the softwood lumber case followed a bilateral dispute between the two 

governments, it is an example of how Commerce applies special 

circumstances as criteria for using its self-initiation authority.34

Because self-initiation opens an investigation without a petition, it could 

reduce some initial costs to SMEs but could also have adverse effects, 

including raising questions of whether the action was taken consistent 

with U.S. obligations under international trade agreements. Opening an 

investigation without a petition could reduce the costs that SMEs incur 

during the petition phase, but would likely have little impact on overall 

costs because most legal costs are incurred during the investigation 

phase. For example, one trade lawyer and an official representing a 

coalition of SMEs suggested that self-initiation could lead to decreased 

legal costs because less time would be billed and lawyers’ involvement 

 

32See 19 U.S.C. §§ 1671a, 1673a and The Uruguay Round Agreements Act Statement of 

Administrative Action, attached to H.R. Rep. No. 103-826(I) (1994), reprinted in 1994 

U.S.C.C.A.N. 3773, 4182. See also Articles 5.1 and 5.6 of the AD Agreement and Articles 

11.1 and 11.6 of the CVD Agreement.

33Self-Initiation of Countervailing Duty Investigation: Certain Softwood Lumber Products 

from Canada, 56 Fed. Reg. 56055 (Oct. 31, 1991).

34The United States and Canada have been involved in a longstanding dispute regarding 

the softwood lumber trade. Canada is the primary exporter of softwood lumber to the 

United States.

Self-Initiation of AD/CV 

Duty Investigations May 

Reduce Some Initial Costs 

but Could Also Have 

Adverse Effects

Commerce Reserves Use of its 

Authority to Self-Initiate 

Investigations to Special 

Circumstances 

Self-Initiation Could Help SMEs 

Reduce Some Initial Costs but 

Could Also Have Adverse 

Effects
 

Page 24 GAO-13-575 Trade Remedies

could start at the investigation phase. However, according to Commerce 

officials, changing the department’s practice to permit increased use of its 

self-initiation authority could be vulnerable in U.S. courts. In addition, 

Commerce officials stated that the limited use of self-initiation is 

consistent with language in the World Trade Organization (WTO) 

Antidumping Agreement, the Subsidies and Countervailing Measures 

Agreement, and the General Agreement on Tariffs and Trade, which 

limits the ability to self-initiate investigations to instances in which there 

are “special circumstances.” According to Commerce, the department has 

limited resources to self-initiate investigations, and self-initiation without 

significant participation of the industry is unlikely to result in the imposition 

of duties. Finally, Commerce noted that when it initiates an investigation 

based on a petition or by self-initiation, its decision is based on 

information available to it that indicates that a formal investigation is 

warranted. Therefore, when Commerce initiates an investigation by 

petition or by self-initiation, it needs the cooperation of the affected 

industry to help gather information that is generally the same as that 

required in a petition. According to Commerce officials, the data needed 

to show that a domestic industry is experiencing injury as a result of 

dumping or subsidization are most readily available to that same industry. 

Therefore, Commerce would need significant cooperation and data from 

domestic producers to meet the requirements to initiate an investigation.

Commerce officials also stated that the United States tries to serve as a 

role model for other WTO signatory countries, so any increased use of 

self-initiation could lead to additional adverse effects. For example, other 

countries might open investigations without the data supporting 

allegations of unfair trade practices, which are normally included in a 

petition. In addition, both Commerce and ITC officials expressed 

concerns that without support and direct participation from domestic

producers affected by unfair trade practices, it would be difficult for ITC to 

obtain the detailed, company-specific information in the 45 days available 

to it to make a preliminary determination. According to ITC officials, the 

questionnaires they send to domestic producers to obtain the data that 

support allegations of material injury are based on product definitions 

usually included in the petitions. Therefore, if an investigation is initiated 

without a petition, ITC would lack key information it needs to develop its 

questionnaires. 
 

Page 25 GAO-13-575 Trade Remedies

U.S. AD/CV duty laws implement U.S. international obligations under the 

World Trade Organization (WTO). If the United States imposes AD/CV 

duties on a product, a foreign government may institute dispute resolution 

proceedings against the United States pursuant to the WTO 

Understanding on Dispute Settlement if it believes that the United States 

has violated its obligations under the WTO agreements. Commerce and 

ITC require detailed information to generate sufficient evidence to 

substantiate a case. High legal costs, difficulty obtaining pricing and 

production data, and garnering industry support may prove too much of a 

challenge for many SMEs to overcome. However, these challenges are 

part of a process designed to ensure that the imposition of AD/CV duties 

on foreign exports is backed by sufficient evidence of unfair trade 

practices and is consistent with U.S. law and internationally agreed-upon 

standards. 

Whether or not a U.S. industry ultimately files an AD/CV duty petition is a 

complex decision made after considering the resources required for the 

petition and investigation process, whether there is sufficient industry 

support, and the probable outcome. While both Commerce and ITC 

provide some assistance to SMEs, in the absence of additional public 

resources to help SMEs address the challenges of high legal costs and 

difficulty obtaining pricing and production data, limited options exist to 

address challenges to pursuing the imposition of AD/CV duties. While

increased use of Commerce’s authority to self-initiate AD/CV duty 

investigations could lower some initial costs, its impact would be limited 

and could strain resources and have other adverse effects, such as 

foreign governments initiating investigations without data to support 

allegations of unfair trade practices. 

We provided a draft of this report to the International Trade Commission 

(ITC) and the Department of Commerce (Commerce) and requested 

comments, but none were provided. ITC and Commerce both provided 

technical edits that were incorporated, as appropriate. 

We are sending copies of this report to the appropriate congressional 

committees, the Department of Commerce, the International Trade 

Commission, the Office of the United States Trade Representative, and 

the United States Small Business Administration. In addition, this report 

will be available at no charge on the GAO website at http://www.gao.gov. 

Concluding 

Observations 

Agency Comments 
 

Page 26 GAO-13-575 Trade Remedies

If you or your staff have any questions about this report, please contact 

Lawrance Evans at (202) 512-4802 or evansl@gao.gov. Contact points 

for our Offices of Congressional Relations and Public Affairs may be 

found on the last page of this report. GAO staff who made major 

contributions to this report are listed in appendix III.

Lawrance Evans, Jr.

Director, Financial Markets and Community Investment
Appendix I: Safeguards

Page 27 GAO-13-575 Trade Remedies

Safeguard laws give domestic producers relief from surges of imported 

goods. The principal safeguard laws that the International Trade 

Commission (ITC) administers include the global safeguards law, the 

China safeguards law, and various safeguards laws implementing free 

trade agreements to which the United States is a party, according to ITC 

officials. Most ITC safeguard investigations are conducted on the basis of 

a petition filed by a representative of a domestic industry. However, ITC 

may be required to conduct investigations at the request of the President 

or U.S. Trade Representative, or upon resolution of the House Committee 

on Ways and Means or the Senate Committee on Finance. Safeguard 

laws require action by the President to put relief into effect.

In contrast to the antidumping (AD) and countervailing (CV) duty laws, 

safeguard laws do not require the finding of an unfair trade practice. 

Instead, ITC must first find that increased imports are a substantial cause 

of serious injury (or threat thereof) to a domestic industry producing an 

article like or directly competitive with the imported article.1 If ITC makes 

an affirmative injury determination, it recommends a remedy to the 

President. The President makes the final decision on whether to apply a 

remedy measure, and if so, the type, amount, and duration of the remedy. 

The President may accept or modify ITC’s remedy recommendation, or 

may elect not to impose a safeguard.

According to ITC and Department of Commerce (Commerce) officials, 

trade experts, and trade lawyers, requests for safeguard investigations 

have been far less frequent than for AD/CV duty investigations in recent 

years because of the political uncertainty of whether relief will be granted. 

Since 2001, safeguard measures have been imposed twice. In 2002, 

safeguard measures were imposed on imports of certain steel products 

under the global safeguards provisions following an affirmative ITC injury 

determination and remedy recommendations in response to a request for 

investigation made by the U.S. Trade Representative and a subsequent 

resolution by the Senate Committee on Finance. These measures were in 

effect from March 2002 until December 2003, when they were terminated 

by the President following an adverse report by the World Trade 

Organization Dispute Settlement Body. In 2009 the President imposed 

higher tariffs on imports of certain passenger vehicle and light truck tires 

from China under the China safeguard provision following an affirmative 

 

1

19 U.S.C. § 2251.

Appendix I: Safeguards
Appendix I: Safeguards

Page 28 GAO-13-575 Trade Remedies

ITC injury determination and remedy recommendation in response to a 

petition from a labor union representing U.S. workers producing tires. The 

safeguard measure on tires from China was in effect between September 

2009 and September 2012. China challenged the safeguard measure 

before the World Trade Organization Dispute Settlement Body, which 

upheld the measure. Table 2 below shows the final determinations of both 

ITC and the President for all safeguard cases investigated by ITC from 

2000 through 2012.

Table 2: International Trade Commission Determinations and Presidential Determinations on Global and Chinese Safeguard 

Cases, from 2000 through 2012

Product Year ITC disposition

Presidential

disposition 

Global safeguards 

Crabmeat from swimming crabs 2000 Negative NA

Extruded rubber tread 2000 Negative NA

Steela 2001 Affirmative Affirmative

Chinese safeguards 

Pedestal actuators 2002 Affirmative Negative 

Steel wire garment hangers 2002 Affirmative Negative 

Brake drums and rotors 2003 Negative NA

Ductile iron waterworks fittings 2003 Affirmative Negative 

Innersprings 2004 Negative NA

Circular welded non-alloy steel pipe 2005 Affirmative Negative 

Passenger vehicle and light truck tires 2009 Affirmative Affirmative

Total affirmative decisions 6 2 

Source: ITC report on import injury investigations.

Notes: 

NA = Not applicable

a

The safeguard measures encompassed 10 different product categories: (1) certain carbon and alloy 

flat-rolled steel, (2) tin mill products, (3) hot-rolled bar and light shapes, (4) cold-finished bars, (5) 

rebars, (6) certain welded pipes and tubes, (7) fittings and flanges, (8) stainless steel bars, (9) 

stainless steel rods, and (10) stainless steel wires.
Appendix II: Objectives, Scope, and 

Methodology

Page 29 GAO-13-575 Trade Remedies

Our objectives were to examine (1) the extent to which small and 

medium-sized enterprises (SME) have petitioned for the imposition of 

antidumping (AD) and countervailing (CV) duties, (2) key challenges to 

SMEs’ ability to pursue the imposition of AD/CV duties, and (3) 

assistance provided by Commerce and ITC to help SMEs address these 

challenges. 

To examine the extent to which SMEs have petitioned for the imposition 

of AD/CV duties, we obtained data from ITC public reports on a total of 

406 companies.1 The ITC data included certain characteristics of 

petitioners and non-petitioners, which ITC identified as part of the 

industry, for AD/CV duty petitions filed from 2007 through 2012. These 

data contained the names and locations of the companies, and the 

products in question in the petitions. To identify which companies were 

SMEs, we used a combination of both LexisNexis and Dun & Bradstreet 

databases to search for the number of employees and affiliation 

information. Our method for collecting and assessing the information on 

company employment size and their affiliation to determine whether a 

company was an SME was as follows:

• We first searched the LexisNexis database for the number of 

employees and affiliation information of each of the 406 companies.

• If LexisNexis did not contain the company or the number of 

employees, we then searched Dun & Bradstreet. We were able to find 

the number of employees for 386 of the 406 companies.

• Based on the information obtained from these two databases, we 

determined whether the company was an SME using the following 

criteria: (1) the Small Business Administration (SBA) Office of 

Advocacy’s definition of SME based on the number of employees (i.e. 

fewer than 500 employees), and (2) the company affiliation 

information. In other words, we designated companies that were not 

subsidiaries of a larger company and had fewer than 500 employees 

as SMEs. If we were unable to determine whether a company was a 

subsidiary, we did not designate it as an SME. This methodology 

reflects the overall conservative approach we developed to avoid 

 

1

ITC provided us with a list of 389 companies. Subsequently, we checked their public 

website and added 17 more companies from a petition filed in 2007 which was missing 

from ITC’s initial list. 

Appendix II: Objectives, Scope, and 

Methodology 
Appendix II: Objectives, Scope, and 

Methodology

Page 30 GAO-13-575 Trade Remedies

over-counting the number of SMEs. We identified 46 SME petitioners 

at the end of this step.

• As a check on the reliability of the data, for the 46 SME petitioners we 

identified in the prior step, we conducted a second search in Dun & 

Bradstreet for the number of employees and affiliation information. For 

the companies where the number of employees differed, we used the 

larger employment number to make the final determination as to 

whether a company was an SME. After this check, we concluded that 

38 petitioners were SMEs.2 Information on the number of employees 

for 7 of the 38 SME petitioners came from one database, which we 

determined to be adequate because there was a high level of 

correspondence between the two databases. For the 42 companies 

for which we had employment numbers from both data sources, the 

employment numbers were largely consistent. There were only two 

companies for which one source showed under 500 employees and 

the other showed 500 and over.

To assess the characteristics of the SME petitioners, we analyzed the 

annual sales revenue and the industry distribution of the 38 SME 

petitioners. We collected sales revenue data from LexisNexis and Dun & 

Bradstreet on SME petitioners to determine whether they had annual 

revenues of $10 million or more and, whether they had annual revenues 

of $50 million or more, or less than $1 million. Our method for collecting 

and assessing the information on company sales revenue was as follows:

• We first used LexisNexis and Dun & Bradstreet to find the annual 

sales revenue for the 38 SME petitioners and were able to find it for 

37 companies. Annual sales revenue data for 30 of the 37 companies 

were in both databases, for 7 in either LexisNexis or Dun & 

Bradstreet, for 33 in LexisNexis, and for 34 in Dun & Bradstreet.

• For the 30 companies for which we had revenues from both sources, 

if both the Lexis and Dun & Bradstreet values fell into the same 

category, we assigned the company to that category. For the category 

$10 million and above, 19 companies fell in the same category 

according to both databases. For the category $50 million and above, 

2 companies fell in the same category according to both databases. 

 

2

We only counted the company as an SME if both databases showed that they had fewer 

than 500 employees. 
Appendix II: Objectives, Scope, and 

Methodology

Page 31 GAO-13-575 Trade Remedies

For the category below $1 million, 1 company fell in the same 

category according to both databases. This way of counting the 

number of companies reflects the overall conservative approach we 

developed to avoid over-counting the number of SMEs—in this case, 

those with sales revenues of $10 million and above or $50 million and 

above. As a check on the reliability of the revenue data, we compared 

the categorization of whether the company had sales revenues of at 

least $10 million for the 30 companies for which we had data from 

both sources. Overall, the level of correspondence in this 

categorization was 25 out of 30 companies—i.e., the two sources 

showed 5 companies belonging to different categories and 25 

belonging to the same category.

• For the 7 companies for which we had annual sales revenue data 

from only one database, we used the value obtained from that source. 

We determined this to be a valid decision based on the relatively high 

level of concurrence between the two data sources when assessing 

SME sales revenue. We found 2 companies with annual sales 

revenue of $10 million and above, 2 companies with annual sales 

revenue of less than $1 million, and no company with annual sales 

revenue of $50 million or above.

• We then summed up the number of companies in each category 

based on the counts we obtained in the two steps described above.

We assessed the reliability of the ITC data on petitions filed from 2007 

through 2012 by interviewing agency officials who were knowledgeable 

about the data. We assessed the reliability of the information obtained 

from LexisNexis and Dun & Bradstreet by reviewing ITC data to ensure 

that the company names and locations were consistent. We also 

reviewed existing information about the databases. When we found 

inconsistencies between the two databases, we applied a methodology 

as described above to ensure that we were conservative in our count of 

SMEs and their revenues. On the basis of these steps we determined that 

the data were sufficiently reliable for our purposes.

To identify key challenges to SMEs’ ability to pursue the imposition of 

AD/CV duties, we interviewed Commerce officials in the Import 

Administration Office, Petition Counseling and Analysis Unit, and Office of 

General Counsel and ITC officials in the Trade Remedy Assistance 

Office, Office of the Inspector General, and Office of Investigations. In 

addition, we interviewed three academics, representatives from two

industry associations, six trade lawyers, two Congressional Research 
Appendix II: Objectives, Scope, and 

Methodology

Page 32 GAO-13-575 Trade Remedies

Service trade experts, and two SME petitioners. We selected the 

academics, industry association representatives, and trade lawyers on 

the basis of recommendations from CRS trade experts and Commerce 

and ITC officials. We selected a sample of SMEs to interview based on a 

range of different products represented on petitions. We contacted 18 

SMEs who filed petitions, but only 2 volunteered to participate in our 

interview. The trade lawyers we spoke with represented 38 percent of the 

21 petitions with SMEs filed from 2007 through 2012. We administered a 

set of standard questions to all six trade lawyers we interviewed. To 

obtain information on legal costs, we asked representatives from each of 

the six trade law firms for a range of the approximate costs of pursuing 

AD/CV duties. One declined to respond and the remaining five offered 

estimates rather than examples of actual fees charged to clients. To

identify the data requirements for filing a petition, we reviewed relevant 

requirements and guidance, including ITC’s 2008 Antidumping and 

Countervailing Duty Handbook and applicable statutes and federal code. 

We also reviewed a sample of petitions submitted by prospective 

petitioners and ITC reports.

To examine assistance provided by Commerce and ITC to help SMEs 

address these challenges, we interviewed the same parties as for the 

prior objective. To obtain information on self-initiation, we reviewed 

applicable U.S. statutes and international agreements. We analyzed 

Commerce documents to determine the extent to which self-initiation had

been used recently. In addition, we gave Commerce a set of written 

questions regarding increased use of self-initiation and we examined the 

department’s written responses. Afterwards, we discussed the issue 

further with trade lawyers, and with Commerce and ITC officials.

We conducted this performance audit from June 2012 to June 2013 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix III: GAO Contacts and Staff 

Acknowledgments

Page 33 GAO-13-575 Trade Remedies

Lawrance Evans, Jr., (202) 512-4802 or evansl@gao.gov

In addition to the contact named above, Christine Broderick (Assistant 

Director), Tom Zingale, Ming Chen, and Heather Hampton made key 

contributions to this report. Vida Awumey, Debbie Chung, David 

Dornisch, Etana Finkler, Alfredo Gomez, Grace Lui, and Erin McLaughlin 

provided additional assistance.

Appendix III: GAO Contacts and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(320919)
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