WASHINGTON, D.C. – U.S. Sens. Sherrod Brown (D-OH) and Rob Portman (R-OH) this week wrote to U.S. Department of Commerce Secretary Penny Pritzker urging full implementation of the Leveling the Playing Field Act, which was signed into law in June 2015.
Specifically, the letter presses the Commerce Department to apply adverse facts available (AFA) in trade cases in which a foreign company or government does not cooperate with Commerce’s investigation. AFA ensures the U.S. can use all the information and facts otherwise available during an investigation in which the other party is not cooperating. The Leveling the Playing Field Act marked the most significant changes to trade remedy law since 2002, and the law specifically sought to restore strength to AFA and guard it from legal challenges that have left Commerce reluctant to employ the tool during investigations.
The Leveling the Playing Field Act has made it easier for workers and businesses to petition the Commerce Department and the International Trade Commission when foreign producers cheat trade laws by selling goods in the U.S. below market price or receive illegal subsidies. It restored strength to antidumping and countervailing duty statutes. This will benefit the domestic steel industry, which has been especially hard-hit by illegal trade.
“Congress passed the Leveling the Playing Field Act to strengthen our trade remedy laws and to ensure our domestic manufacturers and their employees get the relief they deserve from unfair trading practices. But the law’s anticipated impact will be achieved only if the Department implements it properly,” said the Senators in the letter. “Failure to use AFA in the face of uncooperative respondents allows trade cheats to get away with violating international trade law and prevents American manufacturers from competing on a level playing field. The result has been devastating for domestic production and employment.”
The letter was cosigned by Jeff Sessions (R-AL), Debbie Stabenow (D-MI), Al Franken (D-MN), Richard Durbin (D-IL), Tammy Baldwin (D-WI), Michael Bennet (D-CO), Joe Donnelly (D-IN), Joe Manchin (D-W. Va.), John Boozman (R-AR), Mark Kirk (R-IL), Amy Klobuchar (D-MN), Chuck Schumer (D-NY), Shelley Moore Capito (R-W. Va.), Richard Burr (R-NC), Bob Casey (D-PA), Chuck Grassley (R-IA), Joni K. Ernst (R-IA), James Inhofe (R-OK), Daniel Coats (R-IN), and Lindsey Graham (R-SC).
Full text of the letter is below and a PDF is available here.
March 21, 2016
The Honorable Penny Pritzker
U.S. Department of Commerce
1401 Constitution Avenue, NW
Washington, D.C. 20230
Dear Secretary Pritzker:
We write to express our concerns with the Department of Commerce’s implementation of the Leveling the Playing Field Act, Title V of P.L. 114-27. As you know, Congress passed this law, with your assistance, for the purpose of restoring strength to our trade remedy laws and safeguarding the Department’s discretion to fight illegal dumping and subsidies that harm U.S. manufacturers and their workers. We are concerned, however, that the Department is not applying certain provisions of the law – specifically those addressing uncooperative respondents – as Congress intended. We urge the Department to comply fully with the Leveling the Playing Field Act and apply adverse facts available (AFA) in trade cases in which a foreign company or government does not cooperate.
AFA is a critical tool available to the Department to encourage foreign respondents’ participation in trade investigations and prevent a lack of cooperation from further harming the U.S. industry. In recent years, however, foreign respondents have litigated the Department’s use of AFA, and in turn the Department has become more reluctant to employ it in investigations. In response to these lawsuits, Congress included Section 502 of P.L. 114-27 to restore strength to the AFA provisions in statute fully consistent with our international obligations.
Section 502 clarifies the Department’s obligations when it uses AFA. Specifically, it establishes that the Department is not required to try to determine what an antidumping margin or countervailing duty rate would be if a respondent had provided information in the investigation. In addition, the language explicitly states that the Department does not have to corroborate any margin or countervailing duty applied and, moreover, has the discretion to apply the highest countervailable subsidy rates or dumping margins in a proceeding. The section also makes clear that the Department is not required to prove that the margin or rate used in the investigation reflects the commercial reality of the respondent. With these changes to law, Congress intended the Department’s use of AFA to be protected from legal challenge and for AFA to be applied in cases marked by a respondent’s refusal to provide information in either preliminary or final determinations.
Congress passed the Leveling the Playing Field Act to strengthen our trade remedy laws and to ensure our domestic manufacturers and their employees get the relief they deserve from unfair trading practices. But the law’s anticipated impact will be achieved only if the Department implements it properly. Section 502 clarifies the corroboration obligations when using AFA and safeguards the Department’s ability to use AFA to apply the highest duty rate or margin in a proceeding. With these protections in place, the strength and effectiveness of AFA have been restored, and the Department should use AFA when foreign producers or governments do not cooperate in preliminary or final investigations, including the use of dilatory tactics. Failure to use AFA in the face of uncooperative respondents allows trade cheats to get away with violating international trade law and prevents American manufacturers from competing on a level playing field. The result has been devastating for domestic production and employment.
We appreciate your support for Leveling the Playing Field Act and your commitment to U.S. manufacturers. We look forward to working with you to fully enforce U.S. trade laws. Time is of the essence on this important matter.