The United States and many of its trading partners have long used laws known as “trade remedies” to mitigate the adverse impact of certain trade practices on domestic industries and workers, notably dumping (i.e. sales at below fair market value), and foreign government subsidies that lower producers’ costs or increase their revenues. In both situations, U.S. law provides that a duty intended to counter these advantages be imposed on imports. Such duties are known as AD/CV duties. The process involves the filing of a petition for relief by domestic producer interests, or self- initiation by the U.S. Department of Commerce (Commerce), followed by two separate investigations: one by Commerce, which determines if dumping or subsidies are occurring, and the other by the ITC, which determines whether a domestic U.S. industry is materially injured by such unfairly traded imports. If both agencies make affirmative determinations, Commerce issues an order to CBP directing it to collect the additional duties on imports. These are known as AD/CV duty orders. No later than 5 years after publication of these orders, Commerce and the ITC conduct a “sunset review” to determine whether revoking the order would likely lead to the continuation or recurrence of dumping and/or subsidization and material injury. Congress enacted CDSOA on October 28, 2000, as part of the Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations Act to strengthen the remedial nature of U.S. trade laws, restore conditions of fair trade, and assist domestic producers. Congress noted in its accompanying findings that “continued dumping and subsidization . . . after the issuance of antidumping orders or findings or countervailing duty orders can frustrate the remedial purpose” of U.S. trade laws, potentially causing domestic producers to be reluctant to reinvest or rehire and damaging their ability to maintain pension and health care benefits. Consequently, Congress enacted the CDSOA, reasoning that “U.S. trade laws should be strengthened to see that the remedial purpose of those laws is achieved.” CDSOA instructs Customs to distribute AD/CV duties directly to affected domestic producers. Previously, CBP transferred such duties to the Treasury for general government use. Two agencies are involved in CDSOA implementation. The law gives each agency—ITC and CBP—specific responsibilities for implementing CDSOA. The ITC is charged with developing a list of producers who are potentially eligible to receive CDSOA distributions and providing the names of these producers to CBP. CBP has overall responsibility for annually distributing duties collected to eligible affected domestic producers. CDSOA also makes CBP responsible for several related actions. Specifically, it charges CBP with establishing procedures for the distribution of payments and requires that CBP publish in the Federal Register a notice of intent to distribute payments and, based on information provided by the ITC, a list of affected domestic producers potentially eligible for the distribution. Both agencies had some start-up challenges and have made improvements in response to reports by their Inspectors General (IG). In September 2004, ITC’s IG found that the ITC had effectively implemented its part of the act but made several suggestions for enhancing the agency’s CDSOA efforts. For example, it suggested that the ITC better document its policies and procedures for identifying and reporting eligible producers to CBP and improve its communication with companies regarding eligibility. In response, the ITC implemented these suggestions to, among other things, formalize and strengthen its procedures for identifying eligible producers, developing a list of potentially eligible producers, and transmitting the list to CBP. For example, the ITC updated its desk procedures, clarified certain responsibilities to support the staff responsible for maintaining the ITC list, and added additional guidance on CDSOA requirements to its website. In June 2003, the Treasury’s IG issued a report finding several major deficiencies in CBP’s implementation of CDSOA and made several recommendations. The Treasury’s IG found that CBP was not in compliance with the law because it did not properly establish special accounts for depositing and disbursing CDSOA payments, did not pay claimants within the required time frame, and did not institute standard operating procedures or adequate controls for managing the program. Specifically, Treasury’s IG noted that the absence of proper accounts, accurate financial data, and adequate internal controls had resulted in “overpayments of at least $25 million, and likely more.” Treasury’s IG also emphasized that several other issues warranted attention, including no routine verification of claims and significant amounts of uncollected AD/CV duties. In response, CBP consolidated the processing of claims and payments by establishing a CDSOA team in Indianapolis, Indiana; instituted procedures for processing claims and disbursements, and for conducting claim verification audits; and started proceedings to secure reimbursements from the companies that had received overpayments. Despite these efforts, CBP still faces issues raised by the Treasury IG, such as the issue of uncollected duties. The United States has an obligation that its trade remedy actions conform to its legal commitments as part of the WTO, an international body based in Geneva, Switzerland. The WTO agreements set forth the agreed-upon rules for international trade. The WTO provides a mechanism for settling disputes between countries, and serves as a forum for conducting trade negotiations among its 148 member nations and separate customs territories. WTO trade remedy rules involve both procedural and substantive requirements, and a number of U.S. trade remedies have been challenged at the WTO. WTO members that believe other members are not complying with their WTO obligations can file a dispute settlement case. The resulting decisions by a dispute settlement panel, once adopted, are binding on members who are parties to the dispute, and WTO rules create an expectation of compliance. Under WTO rules and U.S. law, however, compliance is not automatic. WTO dispute settlement panels cannot order the United States to change its law. Alternatively, the United States may choose not to comply with WTO agreements and instead may choose to offer injured members mutually-agreed upon trade compensation or face retaliatory suspension of trade concessions by the complainant members. A new round of global trade talks aimed at liberalizing trade barriers is now underway and includes discussions of possible clarifications and improvements to the WTO rules on antidumping and on subsidies and countervailing measures. U.S. trade with members of the WTO totaled $2.1 trillion in 2004, giving the United States a considerable stake in these WTO negotiations, which aim to liberalize trade in agriculture, industrial goods, and services. Three key features of CDSOA guide and affect agency implementation. These features (1) determine company eligibility to receive CDSOA disbursements, (2) shape the allocation of CDSOA disbursements among companies based on their claimed expenditures, and (3) specify milestones that agencies must achieve when implementing the act, including a tight time frame for disbursing funds. CDSOA establishes criteria that restrict eligibility for CDSOA disbursements. As guidance for agency implementation, these criteria raise issues because (1) two-thirds of the orders in effect predate CDSOA, (2) ITC investigative procedures were not designed to, and do not result in, collecting information on support of petitions from all industry participants, and (3) other factors further limit company eligibility. Some companies deemed ineligible regard these criteria as unfair, and several have initiated legal action to secure eligibility. The law restricts eligibility to “affected domestic producers”—namely, any “manufacturer, producer, farmer, rancher, or worker representative (including associations of these persons)” that (1) petitioned the ITC or supported a petition for relief to the ITC that resulted in an AD/CV duty order and (2) remains in operation. The law also requires the ITC to prepare a list of potentially eligible producers for CBP, which publishes it in advance of each annual distribution. The law only applies to orders in effect on or after January 1, 1999. CDSOA further specifies that support must be communicated to the ITC through a letter from the company or a response to an ITC questionnaire. Successor companies or members of an association may also be eligible for CDSOA distributions. Conversely, CDSOA deems as ineligible those companies that (1) opposed a petition, (2) ceased production of a product covered by an order, or (3) were acquired by companies that opposed a petition. These eligibility criteria create special problems when older AD/CV orders are involved. Our analysis of ITC data reveals that roughly two-thirds of (234 out of 351) AD/CV duty orders in effect as of April 15, 2005, precede CDSOA. The application of CDSOA to orders that predate the law’s enactment raises concern. This is because, for AD/CV relief petitions that were investigated before CDSOA was enacted, producers had no way of knowing that their lack of expression of support for the petition would later adversely affect their ability to receive CDSOA disbursements. Moreover, firms that began operations or entered the U.S. market after the ITC’s original investigation are not eligible to receive CDSOA distributions. For petitions that have been investigated since CDSOA was enacted, producers would likely be aware of this linkage. The ITC and CBP told us that in a recent case involving shrimp, industry associations reached out broadly to ensure producers were aware of the need to communicate support to the ITC. Similarly, officials from a law firm that works with importers told us they were aware of such industry association efforts in cases involving live swine.