THIRD SESSION: TRADING ENVIRONMENT

Over the years many international institutions have come up facilitating trading among countries of the
world. While institutions such as World Bank, IMF indirectly influence economic tie-up, institutions like
World Trade Organization tries to regulate trade relations among the member countries. Besides, WTO
there are also certain trade blocks and bilateral trade agreements specifying broad norms guiding trade
relations among the countries. However, it is crucial to familiarize with US trade laws in view of its
commanding economic strength.

US International Trade Laws

The US Constitution grants its Congress the authority to regulate commerce with foreign countries. That
includes right to impose import tariffs. Whether foreign trade harms interests of US industry or not is
assessed through the following angles:

1. Unfair Import Practices: Whether import of products would harm interests of US industry is
assessed from an angle of competitive edge to other countries due to unfair practices,
especially, patent infringement.
2. Dumping: In case of foreign goods exported to US market at a price lower than the one at which
the same products are sold in the home market.
3. Countervailing Duty: When imported products enjoy subsidy support resulting in these goods
becoming cheaper in US market countervailing duty may be imposed to offset the undue
advantage.
4. National Security: US authorities examine whether import adversely affect national security.
5. Unfair Practices outside US: They would examine whether unfair trade practices by the foreign
government adversely affect interests of American companies.
6. Escape Clause: If imports lead to injury of US industry, then there is escape clause to come out
of the trade arrangement.

KEY GOVERNMENT AGENCIES

Though there are many agencies within the government dealing with trade related issues, the following
three offices of the government are important:

Department of Commerce: It is responsible for determination and enforcement of anti-dumping as well

as countervailing duties.

International Trade Commission [ITC]: ITC is quasi- judicial independent agency with wide powers to
investigate complaints relating to international trade. It consists of six commissioners and investigate
whether import of foreign good adversely impact domestic industry. The matter is decided on the basis
of majority. In case of tie it is considered affirmative.
US Trade Representative [USTR]: It is a part of the executive office of the President and cabinet level
position. USTR is responsible for formulation of trade policies.

KEY TERMINOLOGIS OF US TRADE LAWS

 Like Product: Every product is defined in clear-cut terms. For example, what may be termed as
“cement”.
 Domestic Industry: Only if product is manufactured within the country. Process of assembling of
components imported is not considered as domestic industry.
 Standing: Any stake-holder can file a petition with concerned trade agency.
 Injury: Domestic industry has to establish that trade has resulted in injury or adverse effect on
it.

KEY US TRADE LAWS

1. Section 201: Escape Laws: If it is found that increase in imports leads to injury of domestic
industry any stakeholder can file a petition with the ITC. This is as per the provision of erstwhile
GATT. In case of merit in complaint the ITC can recommend to the President for appropriate
measure to protect domestic industry. However, the President has the power to reject
recommendation by the ITC.
2. Section 301: Unfair trade Practices outside US: In case of unfair unjustifiable practices by foreign
government adversely affecting US companies in terms of trade in goods and services the US
authorities will take up the matter with concerned foreign government.
If unfair practice is related to a particular product thee matter may be dealt through Regular
Section 301. On the other, unfair practices affect US products and services in general, then the
matter may be taken up under Section Super 301.

3. Anti-dumping and Countervailing Duty: In case of petition by any stakeholder complaining

instance of dumping or subsidy support by the foreign government resulting in injury to
domestic industry Department of Commerce may ask ITC to investigate the matter. If found
merit in complaint through investigation by the ITC, then it will be responsibility of the
Department of Commerce to determine punitive measures in terms of countervailing duty and
also to implement the same.

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