*EPF207 08/05/2003
U.S. Trade Panel Ends Safeguard Case Against Parts from China
(But advances two other cases involving China, Malaysia, Thailand) (500)

Washington -- The U.S. International Trade Commission (USITC) has ruled that imports of certain brake drums and rotors from China do not cause market disruptions affecting U.S. producers.

As a result of an August 5 negative determination, the investigation of the imports will end.

All commissioners voted in the negative in the case filed under Section 421 of U.S. trade law. The section was added by the U.S.-China Relations Act of 2000, which implemented the bilateral agreement relating to China's accession to the World Trade Organization (WTO).

The "transitional bilateral safeguard" provision of the agreement allows U.S. domestic producers to obtain relief if USITC finds that Chinese products are being imported into the United States in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of similar or directly competitive products.

According to the statute, market disruption "exists whenever imports of an article like or directly competitive with an article produced by a domestic industry are increasing rapidly, either absolutely or relatively, so as to be a significant cause of material injury, or threat of material injury, to the domestic industry."

When USITC determines that market disruption exists it recommends to the president potential remedies under which domestic producers can obtain relief. The president, who makes the final decision, may provide relief or forgo any action.

Since the U.S.-China Relations Act of 2000 went into force, USITC has considered at least two investigations launched under Section 421 -- one concerning wire hangers and another certain electromechanical devices. In both cases it determined that U.S. imports of those goods from China caused market disruption affecting U.S. producers and recommended imposing higher tariffs or quotas on those imports. However, President Bush decided against safeguard measures in both cases citing the "national economic interest" in one and a negative impact on the U.S. economy in another as grounds for his decision.

In a separate action, USITC advanced the case against U.S. imports of tetrahydrofurfuryl alcohol from China, which is allegedly being dumped on the U.S. market. In an August 5 preliminary ruling the commission said it had found a reasonable indication that those imports "materially" injured domestic producers.

Imposition of antidumping duties requires affirmative final determinations both from the
Commerce Department that dumping occurred and from USITC that U.S. industry was injured or threatened.

The department is expected to issue its preliminary determination by December 1, 2003.

One day earlier, USITC made an affirmative preliminary ruling in an antidumping investigation of U.S. imports of polyethylene retail bags from China, Malaysia, and Thailand. In this case, Commerce is expected to make a preliminary ruling by November 28, 2003.

Dumping is the sale of an export good at a price below the home-market or a third-country price, or below the cost of production.

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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