Nonmarket Economy Overcapacity Reform Act
Bill: H.R.6330 | Sponsor: Rep. Higgins, Brian (D-NY)
Policy area: Foreign Trade and International Finance

Summary:
Nonmarket Economy Overcapacity Reform Act
This bill requires the U.S. International Trade Commission (USITC) to consider additional factors in determining whether an industry in the United States is threatened with material injury by reason of imports or sales for importation of subject merchandise. In particular, the USITC must consider the effects of excess production capacity of subject merchandise from nonmarket economy countries.

To amend the Tariff Act of 1930 to provide for consideration of the 
effect of excess production capacity in nonmarket economy countries to 
   determine threat of material injury to United States industry in 
countervailing duty and antidumping duty investigations under title VII 
                              of that Act.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Nonmarket Economy Overcapacity 
Reform Act''.

SEC. 2. EFFECT OF EXCESS PRODUCTION CAPACITY IN NONMARKET ECONOMY 
              COUNTRIES TO DETERMINE THREAT OF MATERIAL INJURY TO 
              UNITED STATES INDUSTRY.

    (a) In General.--Section 771(7)(F) of the Tariff Act of 1930 (19 
U.S.C. 1677(7)(F)) is amended by adding at the end the following:
                            ``(iv) Effect of excess production capacity 
                        in nonmarket economy countries.--
                                    ``(I) In general.--In addition to 
                                consideration of the relevant economic 
                                factors set forth in clauses (i), (ii), 
                                and (iii), in making a determination of 
                                whether an industry in the United 
                                States is threatened with material 
                                injury by reason of imports (or sales 
                                for importation) of subject merchandise 
                                from a nonmarket economy country due to 
                                excess production capacity, the 
                                Commission shall consider--
                                            ``(aa) the actual or 
                                        potential market effects of the 
                                        excess production capacity and 
                                        the excess production capacity 
                                        in the country; and
                                            ``(bb) whether the excess 
                                        production capacity--

                                                    ``(AA) is currently 
                                                causing or is likely in 
                                                the foreseeable future 
                                                to contribute to 
                                                adverse price effects 
                                                in the United States 
                                                market;

                                                    ``(BB) is likely in 
                                                the foreseeable future 
                                                to contribute to rapid 
                                                and significant 
                                                increases in the volume 
                                                of imports of the 
                                                subject merchandise in 
                                                the United States 
                                                market at prices at 
                                                which the normal value 
                                                of the subject 
                                                merchandise exceeds the 
                                                export price or that 
                                                are subsidized; or

                                                    ``(CC) otherwise 
                                                threatens to cause 
                                                material injury to the 
                                                United States domestic 
                                                industry.

                                    ``(II) Additional factors.--As part 
                                of its consideration of the factors set 
                                forth in items (aa) and (bb) of 
                                subclause (I), the Commission shall 
                                consider the following:
                                            ``(aa) Whether the excess 
                                        production capacity is related 
                                        to a lack of effective market 
                                        disciplines that have 
                                        contributed to increases in 
                                        such capacity.
                                            ``(bb) Whether the excess 
                                        production capacity exceeds or, 
                                        upon completion of projects 
                                        under construction to expand 
                                        such capacity, is projected to 
                                        imminently exceed 25 percent of 
                                        the excess production capacity 
                                        of the subject merchandise.
                                            ``(cc) Whether producers in 
                                        the country have demonstrated 
                                        an ability to increase exports 
                                        of the subject merchandise, as 
                                        evidenced by--

                                                    ``(AA) an increase 
                                                in exports of the 
                                                subject merchandise or 
                                                related products to 
                                                third country markets;

                                                    ``(BB) an annual 
                                                increase in the volume 
                                                of exports of the 
                                                subject merchandise or 
                                                related products that 
                                                is greater than 10 
                                                percent of the volume 
                                                of exports of the 
                                                subject merchandise or 
                                                related products in the 
                                                preceding calendar 
                                                year; or

                                                    ``(CC) other 
                                                factors demonstrating 
                                                an ability of the 
                                                country to increase 
                                                exports of the subject 
                                                merchandise or related 
                                                products globally, 
                                                including to the United 
                                                States.

                                            ``(dd) Whether the excess 
                                        production capacity currently 
                                        or in the future would likely 
                                        contribute to--

                                                    ``(AA) a 
                                                significant increase in 
                                                exports of the subject 
                                                merchandise or related 
                                                products globally, 
                                                including to the United 
                                                States;

                                                    ``(BB) depression 
                                                or suppression of 
                                                prices of the subject 
                                                merchandise sold 
                                                globally, including in 
                                                the United States;

                                                    ``(CC) reductions 
                                                in United States 
                                                investment or research 
                                                and development in 
                                                products of the same 
                                                class or kind as the 
                                                subject merchandise; or

                                                    ``(DD) a 
                                                significant increase in 
                                                the United States 
                                                market share of the 
                                                subject merchandise as 
                                                compared to the average 
                                                share held by producers 
                                                of the subject 
                                                merchandise in the 
                                                country during the 3-
                                                year period preceding 
                                                the date of the 
                                                determination under 
                                                clause (i).

                                            ``(ee) Whether any or all 
                                        of the factors described in 
                                        items (aa), (bb), (cc), or (dd) 
                                        are likely in the imminent 
                                        future, given the size and 
                                        extent of the current or 
                                        projected excess production 
                                        capacity and taking into 
                                        account current and future 
                                        levels of demand globally, 
                                        including in the United States.
                                            ``(ff) The standards of 
                                        threat of material injury 
                                        applied by the administering 
                                        authorities of the country to 
                                        imports of United States 
                                        products.
                                    ``(III) Additional factors with 
                                respect to excess production 
                                capacity.--As part of its consideration 
                                of the factors set forth in items (aa) 
                                and (bb) of subclause (I) with respect 
                                to whether the excess production 
                                capacity is real and imminent, the 
                                Commission shall consider the 
                                following:
                                            ``(aa) Whether current or 
                                        projected excess production 
                                        capacity of the subject 
                                        merchandise significantly 
                                        exceeds global demand, 
                                        particularly if the excess 
                                        production capacity results in 
                                        whole or in part from increases 
                                        in the excess production 
                                        capacity in the country and 
                                        thus creates an increased risk 
                                        the subject merchandise will be 
                                        imported into the United States 
                                        market.
                                            ``(bb) The likelihood that 
                                        the excess production capacity, 
                                        including excess production 
                                        capacity under construction in 
                                        the country, would be halted, 
                                        temporarily shut down, or 
                                        permanently closed in 
                                        accordance with market 
                                        conditions in order to prevent 
                                        the negative effects described 
                                        in subclauses (I) and (II), or 
                                        whether such actions would be 
                                        impractical given the levels of 
                                        investment, financial 
                                        commitments, employment costs, 
                                        or government policies 
                                        involved.
                                            ``(cc) Whether the excess 
                                        production capacity in the 
                                        country is planned as part of a 
                                        government industrial plan, 
                                        policy, or directive, or 
                                        benefits from significant 
                                        government subsidies, and 
                                        therefore is not subject to 
                                        market disciplines that would 
                                        restrain production or exports.
                                            ``(dd) Whether--

                                                    ``(AA) related 
                                                products are subject to 
                                                a countervailing duty 
                                                investigation or order 
                                                under subtitle A or an 
                                                antidumping duty 
                                                investigation or order 
                                                under subtitle B; or

                                                    ``(BB) related 
                                                products are subject to 
                                                a countervailing duty 
                                                investigation or order 
                                                or an antidumping duty 
                                                investigation or order 
                                                in third countries that 
                                                could lead to the 
                                                imposition of duties on 
                                                such products and 
                                                result in diversion of 
                                                increased exports of 
                                                such products to the 
                                                United States or other 
                                                countries.

                                            ``(ee) Whether, taking into 
                                        account the type of product, 
                                        technology, United States 
                                        production facilities, levels 
                                        of United States investment, 
                                        research and development costs, 
                                        product life cycle, and price 
                                        sensitivities, the United 
                                        States domestic industry is 
                                        especially vulnerable to 
                                        increased imports of the 
                                        subject merchandise so that 
                                        injury caused by prices of the 
                                        dumped or subsidized imports of 
                                        the subject merchandise likely 
                                        would occur imminently upon 
                                        entry into the United States.
                                    ``(IV) Definitions.--In this 
                                clause:
                                            ``(aa) Excess production 
                                        capacity.--The term `excess 
                                        production capacity', with 
                                        respect to subject merchandise, 
                                        means production capacity of 
                                        the subject merchandise on a 
                                        global basis that exceeds 
                                        estimated domestic demand of 
                                        the subject merchandise by 25 
                                        percent or more or is 
                                        imminently likely to do so, 
                                        including through planned 
                                        increases in capacity under any 
                                        government industrial policies, 
                                        subsidy programs, production 
                                        targets, indigenous innovation 
                                        policies, or plans or 
                                        directives regarding the 
                                        development or construction of 
                                        such capacity.
                                            ``(bb) Related product.--
                                        The term `related product', 
                                        with respect to subject 
                                        merchandise, means--

                                                    ``(AA) any like or 
                                                directly related 
                                                product within the 
                                                scope of an 
                                                investigation relating 
                                                to the subject 
                                                merchandise under this 
                                                title;

                                                    ``(BB) any upstream 
                                                product used in the 
                                                production of the 
                                                subject merchandise and 
                                                that could be used for 
                                                purposes of exports of 
                                                any like or directly 
                                                related product; or

                                                    ``(CC) any 
                                                downstream product 
                                                manufactured used in 
                                                the production of the 
                                                subject merchandise 
                                                that could lead to 
                                                excess production 
                                                capacity and used for 
                                                purposes of exports of 
                                                any like or directly 
                                                related product.''.

    (b) Effective Date.--The amendments made by subsection (a) take 
effect on the date of the enactment of this Act and apply with respect 
to investigations initiated under title VII of the Tariff Act of 1930 
on or after such date of enactment.
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