{"database": "openregs", "table": "congressional_record", "rows": [["CREC-1994-12-20-pt1-PgE23", "1994-12-20", 103, 2, null, null, "URUGUAY ROUND AGREEMENTS ACT", "HOUSE", "EXTENSIONS", "FRONTMATTER", "E", "E", "[{\"name\": \"Philip M. Crane\", \"role\": \"speaking\"}]", "[{\"congress\": \"103\", \"type\": \"HR\", \"number\": \"5110\"}]", "140 Cong. Rec. E", "Congressional Record, Volume 140 Issue 150 (Tuesday, December 20, 1994)\n\n[Congressional Record Volume 140, Number 150 (Tuesday, December 20, 1994)]\n[Extensions of Remarks]\n[Page E]\nFrom the Congressional Record Online through the Government Printing Office [www.gpo.gov]\n\n[Congressional Record: December 20, 1994]\nFrom the Congressional Record Online via GPO Access [wais.access.gpo.gov]\n\n                      URUGUAY ROUND AGREEMENTS ACT\n\n                                 ______\n\n                               speech of\n\n                          HON. PHILIP M. CRANE\n\n                              of illinois\n\n                    in the house of representatives\n\n                       Tuesday, November 29, 1994\n\n       The House in Committee of the Whole House on the State of\n     the Union had under consideration the bill (H.R. 5110) to\n     approve and implement the trade agreements concluded in the\n     Uruguay round of multilateral trade negotiations:\n\n  Mr. CRANE. Mr. Chairman, I believe it is necessary to provide further\nclarification regarding the antidumping provisions contained in title\nII of H.R. 5110, the Uruguay Round Agreements Act. I fully expect that\nthe Commerce Department will implement the antidumping provisions of\nH.R. 5110 in a manner which is consistent with both the letter and\nspirit of our obligations under the WTO Agreement. I expect that\nCommerce will implement the following provisions in full compliance\nwith our antidumping agreement obligations, and in a fair manner that\nthe United States would have no objection to if used by foreign\ngovernments against U.S. exporters:\n\n                     evaluation of industry support\n\n  Section 212 of H.R. 5110 establishes procedures for determining\nindustry support, and provides conditions under which the petition may\nestablish adequate support. Section 212 provides that the Commerce\nDepartment may, in appropriate circumstances, exclude a domestic\nproducer of a like product from the industry where the producer is\nitself related to exporters or importers. As a general rule, Commerce\nshould not include members of the domestic industry those domestic\nproducers who oppose the petition, but are related to exporters, unless\nsuch producers demonstrate that their interests as domestic producers\nwould be adversely affected by the imposition of an order. It is\nexpected that related domestic producers must demonstrate to the\nCommerce Department how an order resulting from an investigation would\nadversely affect their interests, for example, by showing that their\ndomestic production operations would be damaged. In addition, section\n231 provides for termination of a case if Commerce determines that\nproducers accounting for substantially all of the production of a\nproduct lack interest in the case. It is expected that Commerce will\ninterpret this standard to be the same as that set forth in court\ndecisions such as Gilmore Steel Corp. versus U.S., in which the\nstandard is described as an overwhelming majority.\n\n                           captive production\n\n  Section 222 of H.R. 5110 provides for the treatment of captive\nproduction in an injury inquiry. It is expected that the Commission, in\nimplementing the captive production provision, will fully comply with\narticle 3.5 and 4.1 of the antidumping agreement and articles 15.5 and\n16.1 of the subsidies agreement, which require a finding that the\ndumped or subsidized imports are causing material injury to the\ndomestic industry as a whole. It is my understanding that when\nexamining a captive production situation, the ITC will focus primarily,\nbut not exclusively, on the factors provided in the bill. However, the\ncaptive production provision does not limit the Commission to analyzing\nthe merchant market, and an affirmative injury finding not based on an\nanalysis of the industry as a whole, including captive production,\nwould be inconsistent with the agreement. In addition, to the extent\nthe Commission focuses its inquiry on noncaptive production in\nthe domestic industry, it must also focus on noncaptive imports. It is\nexpected that the Commission will apply the same criteria in its\ndetermination of whether to focus primarily on noncaptive imports as it\napplies in its determination of whether to focus primarily on\nnoncaptive domestic production. It is also recognized that, by the\nnature of the fact that captive imports are internally consumed, such\nimports generally do not compete with the domestic like product. I\nexpect that it will be very difficult to establish that captive imports\ncompete with domestic production in a particular investigation.\nAccordingly, only rarely, if ever, should the ITC find that captive\nimports compete with the domestic like product.\n\n                           Negligible Imports\n\n  In preliminary determinations, section 212 of the new legislation\nrequires the Commission to base its finding on a determination as to\nwhether there is a reasonable indication that imports are not\nnegligible. It is expected that the Commission will, when necessary,\nuse reasonable estimates when calculating import volumes. It is further\nexpected that the Commission will normally terminate an investigation\nwhen import levels are below the statutory threshold, except when\nimport volumes are extremely close to the statutory threshold and\nreliable data obtained in a final investigation establishes that\nimports exceed the statutory threshold.\n\n                             Sunset Reviews\n\n  Section 220 of the legislation establishes that Commerce and the\nCommission will make their determinations concerning termination of an\norder based on the facts available if responses by the parties are\ninadequate. In judging the adequacy of responses, it is expected that\nCommerce and the Commission shall apply the same standard as that\napplied in other contexts of the antidumping and countervailing duty\nlaws, such as Commerce's use of best information available.\n  Article 11.3 of the antidumping agreement permits antidumping duties\nto remain in force pending the outcome of a sunset review, even if the\nreview is not completed until after the 5-year deadline. The agreement\nthus authorizes the continued collection of duty deposits, but only up\nto the point that a sunset determination is made to revoke the order.\nIn order to comply with our agreement obligations in cases where the\ndetermination is made to revoke the order, it is expected that,\npursuant to section 751(d(3), Commerce will determine that the\nrevocation will apply to entries on or after the date of the 5-year\nanniversary, and that Commerce will direct Customs to refund\nantidumping duty deposits on merchandise entered after the 5-year\nanniversary of the order.\n  Section 221 of H.R. 5110 states that the Commission, in making its\nsunset determination, ``shall consider that the effects of revocation\nmay not be imminent, but may manifest themselves only over a longer\nperiod of time.'' Although a sunset review is necessarily prospective\nin nature, it is not intended that Commerce or the Commission use this\nfact to extend orders indefinitely. It is not expected that the\nCommission will find that injury is likely to continue or recur based\non uncertainty over the possible conditions at a point in time well\nbeyond the time of the determination. It is expected that the order\nwill be extended only in those cases where there is substantial\nevidence on the record that material injury is likely to continue or\nrecur within a reasonable period of time.\n\n                     Duty Absorption/Duty as a Cost\n\n  Sections 221 and 222 of H.R. 5110 provide for Commerce and the\nCommission to consider the issue of duty absorption. It is expected\nthat before initiating a duty absorption inquiry, Commerce shall ensure\nthat there is a reasonable basis to believe that duty absorption has\noccurred. The statement of administrative action makes clear that\n``during an administrative review initiated 2 or 4 years after the\nissuance of an order, Commerce will examine, if requested, whether\nabsorption has taken place by reviewing the data on the volume of\ndumped imports and dumping margins.'' Therefore, Commerce's inquiry\nwill result in either an affirmative or negative finding of duty\nabsorption. Nothing in the statement of administrative action or\nlegislative language provides that Commerce would determine or compute\nthe extent of duty absorption, or the magnitude of duty absorption.\nTherefore, it is expected that Commerce will not quantify the level of\nduty absorption, and that an affirmative finding will have no effect on\nthe dumping margins calculated. In making its determination, Commerce\nshould give less probative weight to dumping marging and data based on\nbest information available, as these may be a poor indicator of whether\na company is actually absorbing duties.\n  Commerce will notify the International Trade Commission of its\nfindings made during the 4-year review. The Commission should take\nthese findings into account in determining the likelihood of\ncontinuation or recurrence of material injury in the sunset review. It\nis expected that the Commission will not consider duty absorption to\nthe exclusion of other statutory factors. Further, it is expected that\nthe weight accorded by the Commission to Commerce's duty absorption\nfinding will depend on the extent to which it bears on the issue of the\nlikelihood of continuation or recurrence of material injury in light of\nthe facts of each case.\n  Finally, the duty absorption provision in no way permits the\ntreatment of antidumping duties as a cost to be deducted from the U.S.\nprice. The treatment of antidumping duties as a cost has been\nrepeatedly rejected by Commerce and U.S. reviewing courts. Moreover, in\nthe U.S. retrospective duty assessment system, treatment of duties as a\ncost would violate the WTO Antidumping Agreement, result in the over-\nassessment of antidumping duties, and serve as a disincentive to\ninvestment in the United States.\n\n              basis for determination of threat of injury\n\n  Article 3.7 of the antidumping agreement, regarding the determination\nof threat of material injury, is unchanged from the 1979 antidumping\ncode. It is expected that, as provided in the statement of\nadministrative action at page 184, the Commission's practice in threat\ndeterminations will remain unchanged from current practice. As noted in\nthe statement of administrative action, revision of the threat language\nof the statute in section 771(7)(F)(ii) in no way change Commission\npractice or judicial interpretations of the statute.\n\n         export price and constructed export price definitions\n\n  The statement of administrative action at page 152 states that the\nchange in terminology from ``purchase price'' and ``exporter's sales\nprice'' to ``export price'' and ``constructed export price'' will in no\nway change the criteria now used to categorize U.S. sales as one or the\nother. Commerce's decisions will be monitored closely to ensure that no\nchange is, in fact, made in the Department's methodology for\ncategorizing U.S. sales.\n\n                  reimbursement of antidumping duties\n\n  The statement of administrative action expresses the administration's\nintent to continue to apply, when appropriate, the current regulation\n[19 C.F.R. Sec. 353.26] providing for antidumping duties to be\nincreased when Commerce finds that an exporter has directly paid the\nantidumping duties due, or has reimbursed the importer for the\nimporter's payment of the antidumping duties. The legislation makes no\nchange in this regulation. It is not intended that this provision be\nextended to apply to countervailing duties. Countervailing duties\ndiffer from antidumping duties, and it is not intended that Commerce\nwill deduct countervailing duties from export price or constructed\nexport price when calculating the margin of dumping.\n\n                fair comparison/normal value adjustments\n\n  Section 224 of H.R. 5110 implements the requirement in antidumping\nagreement article 2.4 that ``a fair comparison shall be made between\nexport price and normal value.'' It is expected that Commerce will\nensure that a fair, apples-to-apples comparison is made in all cases.\nIn particular, a fair comparison requires that, as a general rule,\nnormal value shall be adjusted for the same costs and expenses for\nwhich adjustments are made to the export price or constructed export\nprice. When U.S. price is based on constructed export price, it is\nexpected that Commerce will make either a level of trade adjustment or\na CEP offset adjustment to normal value. It is my understanding that an\nadjustment will be made to normal value in order to ensure a fair\ncomparison to the export price or constructed export price, as the case\nmay be.\n  In measuring the effect on price comparability and interpreting the\nstatutory requirement that a pattern of consistent price differences be\nshown, it is expected that Commerce will follow the statement of\nadministrative action, which states that ``while the pattern of pricing\nat the two levels of trade under section 773(a)(7)(A) must be\ndifferent, the prices at the levels need not be mutually exclusive;\nthere may be some overlap between prices at the different levels of\ntrade.''\n\n              Initiation of Cost Investigations in Reviews\n\n  As noted in the statement of administrative action [page 163],\nsection 224 amends section 773(b) to provide that Commerce must have\nreasonable grounds to initiate a cost of production investigation in an\nadministrative review, if Commerce excluded below-cost sales of a\nparticular exporter or producer from the determination of normal value\n``in the most recently completed segment of the antidumping\nproceeding.'' Thus, in an administrative review, Commerce may initiate\na cost investigation if it has excluded below cost sales in the most\nrecently completed administrative review, or, if no review has been\ncompleted, in the original investigation.\n\n                           Anticircumvention\n\n  Section 230 of H.R. 5110 amends the anticircumvention provision of\nthe law, which currently provides for a test of whether the difference\nbetween the value of parts imported from the subject country and the\nvalue of the finished product is small. The legislation replaces this\ntest with two inquiries: whether minor or insignificant assembly or\ncompletion is occurring in the United States or the third country, and\nwhether the value of parts imported to the United States or third\ncountry from the country subject to the order is a significant\nproportion of the total value of the finished product. The structure of\nthe statute is based on the anticircumvention provisions of the\n``Dunkel Text.'' It is expected that Commerce will adhere to the\nstatutory requirement that the value of the parts is a significant\nproportion of the value of the finished product. For example, the value\nof a flat panel display in relation to the value of a finished laptop\ncomputer would not be significant, and thus would not be found to\ncircumvent an antidumping order on laptops. Further, it is expected\nthat only in very rare instances would Commerce find circumvention to\nbe occurring between unrelated parties.\n  It is expected that Commerce will not interpret these criteria such\nthat the value added in the United States becomes the essential\ndeterminant of whether circumvention is occurring. The\nanticircumvention rules must not operate as a domestic content rule, or\nas a critical component rule. Moreover, in order to comply with the\nantidumping agreement and article VI of the GATT 1994, Commerce must\nonly apply antidumping duties to merchandise for which a final\ndetermination of dumping and injury has been made.\n\n                             Start-Up Costs\n\n  Section 224 of H.R. 5110 implements the adjustment for startup\noperations provided for in article 2.2.1.1 of the antidumping\nagreement. This provision was one of the agreement's most important\naccomplishments on behalf of U.S. exports, in particular, high-\ntechnology exports. Commerce must not undercut this accomplishment by\nprematurely ending the start-up period or by limiting the start-up\nadjustment. It is expected that Commerce will determine the start-up\nperiod to end at the point at which commercial production levels\ncharacteristic of the product, producer or industry under investigation\nare achieved, based on production of merchandise of quality levels\nsufficient for sale. Further, when making the start-up adjustment,\nCommerce is expected to amortize all start-up costs only after the end\nof the start-up period and over the life of the product or equipment.\n\n                              Short Supply\n\n  While I continue to support separate short supply legislation, the\nadministration has stated that there are mechanisms under current law\nto address short supply situations. Specifically, the fact that a\nproduct is not being produced in the United States should be reflected\nin the ITC's determination of whether the imports are a cause of injury\nto the domestic industry. That is, if petitioning companies are not\nproducing a competing product, there will be no adverse effect with\nrespect to the imported merchandise, and the ITC must take this into\naccount in its injury determination. After an order is in effect,\nCommerce can declare a product outside the scope of an order if it has\nsubstantially different characteristics or uses than the subject\nmerchandise, or if it is unclear whether the order included the\nspecific product. It is my expectation that Commerce and the ITC will\nactively use their existing authority to address short supply\nsituations.\n\n                          ____________________"]], "columns": ["granule_id", "date", "congress", "session", "volume", "issue", "title", "chamber", "granule_class", "sub_granule_class", "page_start", "page_end", "speakers", "bills", "citation", "full_text"], "primary_keys": ["granule_id"], "primary_key_values": ["CREC-1994-12-20-pt1-PgE23"], "units": {}, "query_ms": 42.13368985801935, "source": "Federal Register API & Regulations.gov API", "source_url": "https://www.federalregister.gov/developers/api/v1", "license": "Public Domain (U.S. Government data)", "license_url": "https://www.regulations.gov/faq"}