King & Spalding Partner Quoted in Committee To Support U.S. Trade Laws Release

Thursday, January 1, 2009 - 01:00

The Committee to Support U.S. Trade Laws (CSUSTL) filed written comments with the United States Trade Representative (USTR) on December 12, 2008 urging the U.S. government to vigorously defend its interests before the World Trade Organization (WTO) in a dispute settlement proceeding brought by China against the United States. China has requested the establishment of a dispute settlement panel in connection with the application of the antidumping and countervailing duty laws to China in certain cases covering circular welded pipe, laminated woven sacks, light-walled rectangular pipe and certain off-the-road tires.

In all these investigations, the U.S. Department of Commerce found that Chinese producers and exporters of these products were dumping in the U.S. market and were also receiving large subsidies from the Chinese government. These subsidies took the form of low-cost loans and debt forgiveness from state-owned banks; tax breaks for companies falling into categories favored by the government or that are located in special economic development zones; free or discounted land for companies operating pursuant to government industrial policies; and government provision of inputs including steel, rubber, and petrochemicals at below-market prices. The International Trade Commission also found that competing U.S. industries were injured by these unfair trade practices.

Gilbert Kaplan, partner at King & Spalding, chairman of the CSUSTL Lawyer's Group and counsel to circular-welded pipe producers, said, "the Chinese effort to use the WTO as a shield behind which to engage in unfair trade practices and harm U.S. industries must be countered strongly by the U.S. government. The WTO is supposed to promote fair trade, not protect unfair trade activities, such as distortive subsidies."

Roger Schagrin, chairman of the CSUSTL Government Relations Group and counsel to circular-welded and light-walled rectangular pipe producers, noted, "the trade deficit with China last month topped $28 billion, the highest monthly deficit ever, and the Chinese government is devising new ways to help their exporters maintain export levels in the face of global recession. U.S. companies need to be able to count on the trade remedy laws to counter subsidies and dumping."

"The dispute settlement process in Geneva has often resulted in the weakening of U.S. trade remedy laws," noted Terence Stewart, chairman of the CSUSTL Membership Committee and counsel to the petitioners in the tires investigation. "China made certain commitments when it joined the WTO, including abiding by the WTO subsidy and dumping agreements. Now it is trying to undo certain of those commitments through its challenge of the antidumping and countervailing duty determinations at issue."

China's WTO challenge is expected to take up to a year to complete.

The Committee to Support U.S. Trade Laws is an ad hoc coalition representing American manufacturers, food producers, and workers who are committed to preserving the U.S. trade laws as a vital protection against unfair foreign trade practices.