Date: 2012-03-06
Speaker: JACKSON LEE (democrat)
Chamber: H
State: Texas

Madam Speaker I rise today in order to debate H.R. 4105. "To apply the countervailing duty provisions of the Tariff Act of 1930 to nonmarket economy countries." would ensure that the Department of Commerce can continue to apply countervailing duty law (CDV) to nonmarket economies (NME). such as China and Vietnam. Countervailing duties aim to offset the benefits of government subsidies to industries. Antidumping (AD) duties apply to goods sold overseas at or below the price in the home country. As we enter the first full week of spring and trees are regaining their leaves. We are once again faced with finding ways to help strengthen our economy. After years of witnessing a decline in manufacturing. before us this year there has been a revival. This legislation that would further enhance the economic viability of our manufacturing industries against unfair competition is welcome news. The measure before us would enable U.S. manufactures to fairly compete with goods which enter our stream of commerce. Goods supplied to the United States from nonmarket economies have a significant market advantage. Those goods receive multiple subsidies from their governments that allow them to be sold at a steeply discounted price in the United States and thereby gain a competitive advantage against products that are unsubsidized and manufactured in the United States. Just think of a main street which employs hundreds of local workers. The main manufacturing plant on main street supplies both goods and services to the community. When outside goods and manufacturers. from nonmarket economies. compete with main street manufacturers by undercutting prices the result will be that manufacturers on main street will close. American workers will lose jobs and it will cause the death of main streets all over the country. We must continue to support measures that will establish and ensure a level playing field for American workers and American companies. The issue before us is how to address goods from countries like China and Vietnam that have entered our stream of commerce. and compete with our business but have a significant market advantage because they are heavily subsidized. I firmly believe in the importance of continuing a balanced trade relationship with China. Trade between the United States and China has expanded dramatically in the years since China acceded to the World Trade Organization in December 2001. In 2009. bilateral trade in goods totaled $366 billion. with U.S. imports from China totaling $296 billion and U.S. exports to China totaling $70 billion. In my home State of Texas we have also increased our exports of goods to China. In the District I represent. the 18th Congressional District of Texas. we export chemicals. machinery. computers & electronics. fabricated metal products. and primary metal manufacturing. Yet. I can attest that more can be done to ensure that our trading relationship must improve. Experts agree that the disparity in imports and exports has resulted in a U.S. goods trade deficit with China. In 2009. there was a trade deficit with China for $227 billion in which accounts for 45.3 percent of the overall U.S. goods trade deficit. In trade in services. the United States runs a surplus with China. with exports to China of $16 billion in 2008 (the latest year for which numbers are available) and imports from China valued at $10 billion. The United States bilateral goods trade imbalance with China may be attributed to a variety of factors such as alleged unfair trade practices and their undervalued currency and their impact on the U.S. economy. Chinese officials. who cite different figures for the bilateral trade deficit provided by the United States. routinely seek to shift some of the blame for the trade deficit to the United States by criticizing U.S. controls on exports of advanced technology. They further argue that the sharp increase in exports to the United States reflects the shifting of production from other countries to China and many "madeinChina" products contain components from other countries. Since 2006. the U.S. government has repeatedly raised concerns about alleged backsliding in Chinas implementation of commitments it made as part of its 2001 accession to the World Trade Organization. Most prominently the problem of "excessive tradedistorting government intervention intended to promote or protect Chinas domestic industries and stateowned enterprises." Chinas inadequate protection of intellectual property rights has also been a major concern. Under the Obama Administration. there have been four cases filed against China with the World Trade Organization. including three in 2010. Those four cases relate to Chinas import substitution subsidies in the wind energy sector. its antidumping and countervailing duties on grainoriented electrical steel from the United States. its restrictions on foreign suppliers of electronic payment services. and its restraints on exports of raw materials used in the steel. aluminum. and chemical sectors. The White House reports. however. that it made progress on some longstanding trade issues with China at the December 2010 meeting of the U.S.-China Joint Commission on Commerce and Trade in Washington. D.C. Currently. there are more than 300 antidumping and countervailing duty orders to shield Americanmade goods. from honey to bedroom furniture. against global competition it deems unfair and damaging to U.S. companies. About half the orders target iron and steel products. China accounts for a third of all U.S. unfair trade cases. the most of any country. including about 100 antidumping and two dozen countervailing duty orders. according to the U.S. International Trade Commission. The U.S. Commerce Department would be allowed to apply duties to offset government subsidies in nations such as China and Vietnam under this bipartisan bill. H.R. 4105. overturns the decision of the Court of Appeals for the Federal Circuit and preserves the validity of the countervailing duty proceedings against imports from China and Vietnam. beginning in 2006. This would ensure that the Department of Commerce can continue to apply countervailing duty law (CDV) to nonmarket economies (NME). such as China and Vietnam. Countervailing duties aim to offset the benefits of government subsidies to industries. Antidumping (AD) duties apply to goods sold overseas at or below the price in the home country. The legislation also addresses an adverse World Trade Organization (WTO) finding that there may be "double remedies" in situations where countervailing duties are applied to NME exports at the same time that antidumping duties calculated using the socalled "surrogate value" methodology are applied to the exports. As a senior Member of the Judiciary Committee it is not without hesitation that I join my colleagues in overturning a court ruling. I believe in the deliberative process from the judiciary and I was pleased that the court entrusted Congress to act. In 2007. the Department of Commerce began applying countervailing duty laws (CVD). This was after nearly 20 years of not applying CVD laws to import from NME countries. In 2007. Commerce began to impose CVDs to imports from China. a country which it has long been considered to be a NME for the purposes of Antidumping /CVD laws. The legality of applying both CVD/and AD laws to Chinese goods was first tested in the U.S. Court of International Trade (CIT) in 2009. when the CIT found that Commerces approach unreasonable. GPX Intl Tire Corp. v. United States. 645 F. Supp. 2d 1231. 12421243 (Ct. Intl Trade 2009). The CIT ruled that the prospect of a double remedy is likely when CVD duties are imposed at the same time as the NME AD duties. As the CIT explained. "the NME AD statute was designed to remedy the inability to apply the CVD law to NME countries. so that subsidization of a foreign producer or exporter in a NME country was addressed through the NME AD methodology." The CIT instructed Commerce ".. . to forego the imposition of CVDs on the merchandise at issue or for Commerce to adopt additional policies and procedures to adapt its NME AD and CVD methodologies to account for the imposition of CVD remedies on merchandise from the PRC." GPX Intl Tire Corp. v. United States. Commerce was unable to find a reasonable methodology to prevent the likely doublecounting outcome and. under protest. it complied with the CITs order not to apply CVDs on imports of tires from China. but appealed the CIT decision. The Federal Circuit affirmed the holding of the Court of International Trade that such countervailing duties could not be collected but did so on different grounds. Without this legislation the Department of Commerce will be required to stop imposing countervailing duties on goods imported from nonmarket economies (NME). Rather. in affirming the CITs judgment. the CAFC held more broadly that the legislative history of the U.S. CVD laws. Commerces longtime practice up to 2007 of not applying CVD law to NMEs. and the CAFCs 1986 opinion in Georgetown Steel Corp. v. United States. compel the interpretation that the CVD statute cannot be applied to NME countries.