International trade commission
International trade commission (ITC) is definite by US Legal as an independent quasi-judicial federal agency with broad investigative responsibilities on matters of trade. The agency mainly focuses on the investigation that surrounds the effects of dumped and subsidized imports on the domestic market and industries and conducts some global investigation with the aim of safeguarding. ITC also deals with the cases that deal with the imports violation of property rights (Knes). Thus, the system mainly deals with providing the rules that govern the international trade.
The issue of international trade and tariffs had a great impact on the United States economy in the late 19th century. This was because the country was experiencing unprecedented industrialization and expansive trade with partners beyond the borders. Through an act of 15th May, 1882 President Chester A. Arthur appointed a tariff commission under the Treasury to investigate the country’s economic activities and make recommendations on the tariff regulation. Another commission was appointed in 5th August 1909 pursuant to Payne-Aldrich Tariff Act, with the mandate collecting useful information that would help the government administer tariff laws. However, the commission was abolished in the mid-1912. A permanent solution was required on the issue of tariffs and international trade. The process to establish a tariff commission that would easily address international trade issues in the long term was started initiated in 1914, with the realization came in 1916 (Usitc.gov).
The agency was formed by the US government, through the US congress, as an independent agency in the year 1916 and was named the Tariff Commission (Usitc.gov). The name of the agency was later changed to the United States international trade commission. The change was effected through section 171 of the Trade Act of 1974. The agency has three major elements in its mission that include: to administer US trade remedy laws within its mandate in a fair and an objective manner (Usitc.gov). The second element is to provide the president, and the congress with independent analysis, information, and support on matters of tariffs, international trade, and US competitiveness. Finally, the last element of the mission n relates to the maintenance of the Harmonized Tariff Schedule of the United States (HTS).
In this light, to achieve it mandates, the commission is run by six commissioners who are tasked with implementing the various regulations and duties mandated to the commission. The six commissioners are appointed by the president through the advice and the approval of the senate. The term of the commissioners is mainly a nine years term although the term might be shorter if a commissioner is appointed to refill an unexpired term (Usitc.gov).
The commission was set to fulfill certain mandates that were very crucial to the American economy. Mainly, the commission has five major operations which are aimed at serving the commissions clients who are mainly external clients (Usitc.gov). The operations are import injury investigations, intellectual property-based import investigations, industry and economic analysis, tariff and trade information services and trade policy support.
This operation mainly regards the investigations that are undertaken to assess the antidumping and countervailing duty or subsidy. This operation is done in collaboration with the United States department of commerce. Although the investigations are done in collaboration, both institutions address different goals in these investigations (Usitc.gov). The department of commerce main focus is on establishing whether the occurrence of the dumping and subsidizing as well as the level of dumping and subsidizing amount. On the other hand, the commission aims at establishing whether the US economy and industries are threatened by the said dumping and subsidizing (‘US Federal Trade Commission Recommends Privacy Be Put At Heart Of Facial Recognition Tech’).
Investigation on the import injury is prompted by the petitions that are filed by the US industries, who believe that the imports are sold in the US market at a price that is lower than the fair value. Prices lower than the fair value indicates dumping. Additionally, the industries petition against the imports that are advantaged in the sense that they enjoy counter available subsidies that are provided through the foreign government programs (Usitc.gov). The main reason for petitioning is because these acts make the marketing space unfair; thus the industries aim at leveling the playing field.
If the decisions are arrived at by the both agencies are affirmative of the petitions laid to them by the industries petitioners, the commerce department issues an order to restrict this imports. The omission is also responsible for conducting investigations that relate to the global safeguards and market disruptions that may cause harm to the American industries (Usitc.gov). In effect, the commission makes recommendations to the president; these recommendations are aimed at offering remedy to the injury caused and facilitate industry adjustment to competition from outside products.
Intellectual Property Based Import Investigations
The commission is highly involved in petitions regarding intellectual property rights. These petitions rate to patent and trademark infringements that are caused by imported goods. The investigation if successful results to a remedy that informs the customs prevent infringing imports from entering the boundaries (Usitc.gov). Furthermore, the commission may issue orders that bar those who are engaged in unfair acts from entering the country. According to a newspaper article written by Soder indicate that, “the commission has agreed to investigate whether 17 retailers — including big-name brands such as the Gap, American Eagle and Abercrombie & Fitch — are importing jeans made in a way that violates patents owned by RevoLaze LLC of Westlake.”
Industry and Economic Analysis
The commission is also mandated with industrial and economic analysis task. This analysis is done by two offices that are: the Office of Industries and the Office of Economics (Usitc.gov). The commission offers this two offices technical support on economic matters (Pandit, Pg. 15). A good example is when the commission was requested by the US Senate Committee on Finance to investigate the effects of the digital trade in the US and the world economy in general (USITC, Pg. 1).
The commission put the finding in three level tiers, where the findings were grouped as the firm level finding, industry level findings and economy level findings. The firm-level research was conducted on ten digital intensive industries (USITC, Pg. 32). The firms were questioned on the reason and the benefits they derived from using digital technology. The results of individual firms culminated to the results of the various industries. The economy wide findings summed the benefits of all the companies and industries and summarized them to general benefits (USITC, Pg. 33). This report gives a clear indication of the importance of the commission in providing the technical support to the various arms of government.
Tariff and Trade Information Services
The commission is also tasked with investigations that regarding tariffs. The United States economies practices some harmonized tariffs mechanism (Usitc.gov). Therefore, the commission makes recommendations regarding the modifications of the harmonized tariffs schedules so that to ensure the tariffs are in line with the World Custom Organization recommendations (Greenbaum et al., Pg. 160). A blog posted by Ngoriel indicates the commission conducted research to determine the hurdles that the US SMEs are facing when trading with the EU. The research findings indicate that the SMEs are facing various barriers that are unduly heavy on them when compared to the large companies. The commission made suggestion that the SMEs should be included in the trade negotiations between the US and the EU. Ngoriel indicated that, “among the challenges that were affecting the SMEs included high tariffs and inconsistent EU rules and testing mandates non-science-based regulations, and a lack of harmonization between U.S. and EU standards.”
Trade Policy Support
The trade policy makers, both in the executive and the legislative branch of the government, source for the technical support from the commission (Usitc.gov). Additionally, the commission offers the government information on the various international trade issues through their various researches, briefings and meetings, and testimonies at the congressional hearings. Additionally, under this operation the commission is tasked with the work of making some final decisions on behalf the office of the president as well as drafting the President’s decrees and other documents (Usitc.gov).
Benefits of the Commission to the US Economy
The commission offers significant benefits to the United States economy. One, the commission offers noteworthy advantages to the country’s industries, especially when they are facing unfair competition from Imports. According the article published by V. James Adduci II and Tom M. Schaumberg in The American Corporate Counsel Magazine, the intellectual property owners have discovered the commission offers them an efficient and cost effective mechanism for protecting their rights (Caddel).
In this regard, several jurisdictions around the globe have amended their laws and regulations in order to make them be congruent with the Act through which the Commission was founded. The Uruguay Round Agreements Act (“URAA”) amended its section 337 to make compliant with US international obligations (V. James Adduci II and Tom M. Schaumberg).
In addition, the commission is helpful in establishing fair trading environment for the firms in the United States. According to Ngoriel, the commission improved the SMEs voice on the unfair treatment in their trading with the European Union. The commission affirmed the SMEs position on the high tariffs which the SMEs have to meet in their international trade operations (Usitc.gov). The commission emphasized on the need to incorporate the SMEs in any international trade negotiations with the United States trading partners.
Furthermore, the commission is essential in ensuring that the government is furnished with proper international trade information. This is done through research that is conducted by the commission and ultimately providing precise and accurate information that would guide the government to make proper decisions (Usitc.gov). A good example is the research that the commission conducted on behalf of the Senate (Bilmes). The research enabled the commission to make conclusive arguments regarding the impact of digital technology on the US firms, industries, and the economy as well as the world at large.
Challenges Faced by the Commission
The most significant challenge or difficult the difference of the trade laws among the various US trading partners. Some trade partners are very crucial to the running and success of the United States economy (Usitc.gov). Therefore, difficulty arises when the commission tries to harmonize the trading laws that govern the partners and the United States. This is seen in Caddel (Pg. 9) research paper, where the Caddel states that, “The Customs Court Act of 1980 created a special U.S. Court of International Trade with exclusive jurisdiction over appeals from the ITA and ITC. This act specifically provides standing for foreign companies and other domestic industries to challenge decisions and even allows the Court to hold hearings in foreign countries to ensure that foreign companies have the opportunity to respond. The result is a court that commonly rules against decisions of the ITA and ITC and maintains a rough balance between protectionism and free trade.”
Additionally, although the commission is an independent institution, it faces some restriction in its operations. One the commission acts as an arbitration court for various issues it handles. After the commission makes a determination, the ruling is subjected to additional reviews by the US Court of Appeals (McDermott Will & Emery, Pg. 7). Moreover, all the determinations made by the commission are subjected to the presidential review. Although the presidential reviews are limited in scope by the public policy concerns, there have been a handful of instances when the commission recommendations and determinations have been rejected or overturned by the president (McDermott Will & Emery, Pg. 7). Also, the commission faces some challenges through political interference. Caddel (Pg 1) states that, “Research on the U.S. International Trade Commission (ITC), an independent agency responsible for adjudicating AD/CVD claims, finds mixed evidence of political influence in these cases.” This demonstrates the political influence on the commission activities; the political influence is attributed to the congressional dominance. The congress influence is seen through its oversight powers over the commission (Caddel, 5).
Recommendation to the Challenges
The commission is very crucial to the running of the countries affairs in the international arena. Therefore, the government should work tirelessly to improve the trade relationship with its partners which will easily ease the operations the commission operation (Knes, Baldwin and Steagall). Due to the free trade agreements with partners like Canada and Mexico, the commission easily deals with these economies when dealing with trade harmonization operations (Knes). Moreover, the commission should be given a strong judicial framework that will earn the confidence of many individual, companies and economies. This judicial strength will enable the commission ruling to be taken as final, thus minimizing the appeals of the commission rulings. In effect, the consequential results will be an increase confidence in the commission.
The United States International Trade Commission is an important organ in the US economy and the relations with the global players. The commission has gone through significant metamorphosis that started in the late 19th century. The commission has increasingly been helpful in solving various issues that are face the United States industries. The commission has been in the forefront of protecting the economy’s players from unfair trade practices.
Adduci II, V. James Adduci II, and Tom M. Schaumberg. ‘Section 337 Offers Significant Advantages When Facing Unfair Competition From Imports | Adduci, Mastriani & Schaumberg LLP’. Adduci.com. N.p., 2013. Web. 8 Dec. 2014.
Baldwin, Robert E, and Jeffrey W Steagall. Analysis Of US International Trade Commission Decisions In Antidumping, Countervailing Duty And Safeguard Cases. London: Centre for Economic Policy Research, 1994. Print.
Bilmes, Jack. ‘Generally Speaking: Formulating An Argument In The US Federal Trade Commission’. Text & Talk – An Interdisciplinary Journal of Language, Discourse Communication Studies 28.2 (2008): 193-217. Web.
Caddel, Jeremy. ‘Domestic Competition Over Trade Barriers In The US International Trade Commission’. International Studies Quarterly 58.2 (2013): 260-268. Web.
Greenbaum, Noam et al. ‘Paleohydrology Of Extraordinary Floods Along The Swakop River At The Margin Of The Namib Desert And Their Paleoclimate Implications’. Quaternary Science Reviews 103 (2014): 153-169. Web.
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Pandit, Ram. ‘US Trade Barriers And Import Price Of Canadian Softwood Lumber’. The International Trade Journal 23.4 (2009): 399-421. Web.
Soder, Chuck. ‘U.S. International Trade Commission To Investigate If Retailers Are Importing Jeans Violating Revolaze Patents’. Crain’s Clevleand Business 2014. Web. 9 Dec. 2014.
‘US Federal Trade Commission Recommends Privacy Be Put At Heart Of Facial Recognition Tech’. Biometric Technology Today 2012.10 (2012): 1-2. Web.
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Usitc.gov,. ‘E-Discovery Limits — USITC Considers Proposal To Streamline Section 337Investigations’. Usitc.gov. N.p., 2014. Web. 8 Dec. 2014.