Former and Current US, UK Officials Describe 'Complexifying' Global Trade Remedies Systems
A panel of trade remedy authorities including a former Commerce Department assistant secretary and two U.K. government representatives surveyed March 13 the increasingly complicated global trade remedies realm, touching on how the two countries have reacted, in Georgetown University Law Center’s annual International Trade Update.
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“I think there’s not a question we’re seeing a fundamental recalibration of U.S. trade policy,” said Ryan Majerus, who served as the assistant secretary for enforcement and compliance at Commerce’s International Trade Administration and is now a partner at King & Spalding.
The panel, moderated by Schagrin Associates partner Elizabeth Drake, discussed how the two countries’ trade remedies have evolved and grown more complex in the past few years -- the U.K. after Brexit, the U.S. amid a shift toward “very aggressive trade policy enforcement,” as Majerus described it.
Both come as the realm of international trade remedies reacts to global economic growth, the “fading gravitational pull” of the World Trade Organization and an increase in unilateral protectionist measures, said Oliver Griffiths, the chief executive of the U.K.’s Trade Remedies Authority. All governments, Majerus said, have needed to deal with “more and more” issues such as transshipment, circumvention and transnational subsidies.
Globally, the panel noted it expects to see countries continue to rely on the WTO in certain instances, but to otherwise rely more on independent measures.
Majerus and Griffiths also discussed the situations in their respective countries.
They described current remedies as falling in three different buckets: “traditional” trade remedies such as antidumping and countervailing, or, in the U.K., anti-subsidy duties; tariffs such as those authorized by U.S. sections 203 and 301 of the 1930 Tariff Act; and more recent innovations such as the U.S. reciprocal tariffs and Enforce and Protect Act and the EU’s Carbon Border Adjustment Mechanism, a carbon tariff.
Of these, in the U.S., AD/CVD at present represent “somewhat calmer waters” because they are industry-driven, Majerus said.
Noting that he can “speak more freely” now that he no longer works for Commerce, Majerus said he expects to see the U.S. rely more on sections 203 and 301 -- especially as tariffs have been a political emphasis of the new presidential administration. And Commerce is working on implementing “new methodologies” after a number of recent regulatory changes, including the lifting of the prohibition on considering transnational subsidies, he said.
Commerce deals primarily with AD/CVD cases, but has also seen an increasing number of circumvention claims, EAPA claims and similar, Majerus said.
Griffiths said the U.K.’s trade remedies system works similarly, although it is still focused on transitioning into independence in the post-Brexit era. This week, he said, the Trade Remedies Authority will have officially initiated investigations into the last few antidumping orders remaining of the 43 carried over from the EU. The office hasn’t considered any circumventing cases yet, he added.
But unlike the U.S. system, he noted that his agency also uses an “economic interest test” when determining whether to recommend duties. This test considers whether duty imposition will actually result in a net national economic loss, even if domestic producers benefit from alleviation of injury.
Although the test usually doesn’t ultimately change the final recommendation, Griffiths described a case in which it did: His agency found that the AD on e-bikes benefited domestic producers, but had resulted in an additional 260-pound cost per consumer, at least 2 million pounds overall. They also considered the fact that employment in domestic e-bike production was “diffuse,” not geographically concentrated; that people with disabilities disproportionately relied on e-bikes for transportation; and that e-bikes were good for the environment. They ended up recommending the AD order be revoked for all e-bikes except folding bikes, which represented only 10% of imports, he said.
Majerus said it would be difficult, and potentially not desirable, for Commerce to implement a similar test.
The department has to maintain consistency, he said. That task is already made more difficult by a lack of resources, he claimed; although Commerce’s case load has tripled in the past 10 years, its staffing and resources have remained stagnant.
Oliver Payne, the assistant director of the U.K.’s Department for Business and Trade, noted that the U.K.’s economic position differs from other countries’ due to its heavy reliance on imports.
Majerus also said it is unlikely the U.S. will pass a regulation similar to the EU’s CBAM, although the country might have to respond to level the playing field if the carbon tariff sees enough widespread use.