2d Session

98TH CONGRESS HOUSE OF REPRESENTATIVES I 98-725

REPORT

TRADE REMEDIES REFORM ACT OF 1984

MAY 1, 1984.-Committed to the Committee of the Whole House on the State of the
Union and ordered to be printed

Mr. ROSTENKOWSKI, from the Committee on Ways and Means,

submitted the following

REPORT
together with

DISSENTING AND ADDITIONAL VIEWS

[To accompany H.R. 4784]

[Including cost estimate of the Congressional Budget Office]

The Committee on Ways and Means to whom was referred the

bill (H.R. 4784) to reform the remedies available to United States
producers regarding unfair import competition, and for other pur-
poses, having considered the same, report favorably thereon with
amendments and recommend that the bill as amended do pass.
The amendments are shown in the reported bill, with the matter
proposed to be stricken shown in linetype and the matter proposed
to be inserted shown in italic type.
BACKGROUND AND PURPOSE

OVERVIEW
H.R. 4784, the "Trade Remedies Reform Act of 1984," as amend-
ed and ordered reported by the Committee on Ways and Means,
contains comprehensive amendments to Title VII of the Tariff Act
of 1930 (as amended by the Trade Agreements Act of 1979). Title
VII sets forth the basic definitions, terms, and procedures for im-
posing countervailing and antidumping duties, which represent the
fundamental remedies for U.S. industries against injurious foreign
*31-006 0
subsidization or dumping. These laws are administered by the De-
partment of Commerce as the "administering authority" for deter-
mining the existence of subsidies and dumping, and by the U.S.
International Trade Commission (ITC) for determining whether a
U.S industry is materially injured or threatened with material
injury by reason of imports which are subsidized or sold at less
than fair value.
H.R. 4748 strengthens and improves Title VII in several impor.
tant respects. First, it clarifies and expands the scope of these laws
to cover newer forms of unfair trade practices, such as foreign in.
dustrial targeting, upstream subsidies, natural resource subsidies,
and downstream dumping. Second, it provides several needed defi-
nitions and guidelines to govern the agencies responsible for ad-
ministering these laws on such issues as threat of injury, cumula.
tion of imports, and coverage of likely sales or leases. Third, H.R.
4784 limits present discretion to terminate or suspend investiga-
tions on the basis of settlement agreements, including quantitative
import restrictions, rather than imposing offsetting duties and en-
couraging elimination of the unfair practice. Fourth, the bill man-
dates several significant procedural changes that will lower legal
costs, simplify investigations for all parties, and greatly reduce the
burdens on the agencies administering these laws. Fifth, it estab-
lishes a centralized Trade Remedy Assistance Office in the Interna-
tional Trade Commission to assist industries in understanding and
utilizing the many trade remedies available under U.S. law. It also
mandates greater assistance to qualifying small business in prepar-
ing and filing trade remedy petitions. Sixth, it creates a Targeting
Subsidy Monitoring Program in the ITC so that the government
will engage in a comprehensive and coordinated effort of monitor-
ing and analyzing the industrial policies of our trading partners
that may involve export targeting.
NEED TO IMPROVE EXISTING LAW

Together, these changes strengthen and streamline the basic

regime in U.S. law governing injurious unfair trade practices. The
countervailing duty and antidumping laws are vital to the mainte-
nance of fair trade, because they offset and deter the use of preda-
tory dumping and subsidization in the U.S. market by foreign gov-
ernments or exporters. However, during its extensive hearing
review of the operation of the various trade remedy statutes during
the spring of 1983 (see Committee on Ways and Means Serials 98-
14 and 98-15), the Subcommittee on Trade was made aware of the
widespread attitude throughout American industry that the anti-
dumping and countervailing duty laws need various improvements
to make them more effective in deterring the injurious practices
they were intended to address. Principal criticisms center around
the inadequate coverage of emerging and more subtle practices
such as targeting, and the enormous costs and procedural delays
associated with these laws.
Targeting
A major concern of many industries is the issue of foreign indus-
trial targeting and its coverage under present law. Many foreign
governments are actively targeting export industries by bestowing
upon them the benefit of several government actions which, al-
though not comprised of cash subsidies in the form of direct grants,
loans or debt forgiveness, are nevertheless based on the principle of
active government intervention and support. It is clear that the
rigid construction of present law is inadequate to the task of disci-
plining these government policies, which unquestionably have the
same effect as a normal cash subsidy. These practices-whether
they be special home market protection, preferential procurement,
or government control over private financing-must be quantified
and brought under some effective discipline when they are part of
an overall plan or scheme to promote exports in a specific industry.
In this connection, domestic industries stress the need for more
comprehensive and continuous monitoring by the U.S. Government
of the very complex industrial policies of our trading partners in
order to anticipate and deter the potentially injurious effects of
export targeting practices.
Upstream subsidies and downstream dumping
Another major area of concern is unfair trade at prior stages of
manufacture or production-the problem of so-called "upstream
subsidies" and "downstream dumping"-of products which are sub-
sequently incorporated into the final imported product. These prob-
lems have, in the view of many industries, multiplied in scope
without any effective discipline under present law. Some domestic
industries believe these policies and practicies are being adopted
specifically to circumvent U.S. trade laws. But because of the rigid
definitions of "like product" and "domestic industry" in these laws
(which are partly a result of international obligations), they have
been very difficult issues to address.
Natural resource subsidies
Growing concern is also being expressed by U.S. manufacturers
of natural resource-based products which face increasing import
competition from energy rich countries pricing their natural re-
sources for domestic use below their prices for export or the fair
market value. The Subcommittee on Trade held a separate hearing
solely on the issue of foreign natural resource pricing practices and
their impact, in particular to develop more appropriate standards
under the countervailing duty law for determining the existence
and amount of such subsidies.
Settlement agreements
Many in the private sector argue that acceptance of offsets has
allowed foreign subsidies to continue and that greater discipline
must be exercised over the use of quantitative restriction agree-
ments as a means of settling unfair trade cases. Under present
practice such arrangements are entered into without any require-
ment that the foreign government or exporters achieve the basic
objectives of these laws by eliminating their subsidies or dumping.
The consequences of import quotas relative to duties in terms of
higher prices, reduced availability of supplies, and the impact on
industry competitiveness should be fully assessed before such quota
arrangements are accepted. Moreover, quotas should be used only
in limited circumstances as an interim solution and should not
become a generalized alternative to normal remedies under the
law.
Proceduralsimplification; clarificationof standards
The need for procedural simplification and clearer standards are
perennial ones, and it was not surprising that many groups believe
improvements are necessary in these areas. In particular, the need
to simplify and rationalize price adjustments in antidumping inves-
tigations and to eliminate unnecessary interlocutory court review
have been addressed. There is general consensus on the need to
revamp totally the unsatisfactory manner in which these two laws
presently deal with the pricing policies of nonmarket economies.
The Committee sought a solution to this problem, but after consid-
erable discussion and analysis was unable to reach a consensus on
an appropriate and equitable alternative.
Small business assistance
A particular concern of many groups is the nearly insurmount-
able burden experienced by small business entities in trying to file
and litigate cases. In some instances, the legal fees and other start-
up costs have deterred small business entities from pursuing ac-
tions. Another problem of equal magnitude is the widespread lack
of information among small business groups as to the many types
of trade remedies available under U.S. law and the particular law
under which a given complaint might best be pursued. Several
hearing witnesses expressed the need for a central office in the gov-
ernment to disseminate and explain basic information about the
various trade remedies available under U.S. laws.
PRINCIPLES UNDERLYING H.R. 4784, AS AMENDED

H.R. 4784, as amended and ordered reported, seeks to address le-

gitimate concerns about the scope and administration of the anti-
dumping and countervailing duty laws while at the same time
maintaining the basic principles of due process, transparency, and
fairness which underlie these statutes. In particular, a basic crite-
rion guiding the Committee in including amendments of these laws
in the bill was to maintain their consistency with the letter and
the spirit of the General Agreement on Tariffs and Trade (GATI),
particularly with Articles VI and XVI, which govern the use of
these remedies, and the Agreement on Antidumping Measures and
the Agreement on Subsidies and Countervailing Measures negotiat-
ed under the auspices of the GATT and signed by the United States
in 1979.
A second basic principle of H.R. 4784, as amended, is to maintain
present standards of material injury to a U.S. industry as a basic
requirement in applying a remedy for all of the unfair practices set
forth in the bill (except when the injury test does not apply under
present law in cases of subsidy practices maintained by countries
that have not signed the Agreement on Subsidies and Countervail-
ing Measures or undertaken substantially equivalent obligations).
Therefore, the bill only addresses practices with a materially inju-
rious effect in the U.S. market. It does not deal with the effects on
U.S. industry of such practices in third-country markets or with
the need for reciprocity in the market of the exporting country.
The Committee believes that the GATT agreements obligate sig-
natory countries to refrain from using the types of practices ad-
dressed by H.R. 4784 in a manner that injures or impairs trade
benefits of other signatories. Expansion of the scope of the counter-
vailing and antidumping laws to cover these subtle and rapidly
growing forms of unfair behavior should not be viewed as a unilat-
eral departure by the United States from its international under-
standings. Rather, the amendments recognize the fact that condi-
tions of commerce are rapidly changing; government intervention
throughout the world is growing at a disturbing pace and is also
changing form. If the United States fails to respond to the chal-
lenge of new unfair trade practices, the entire concept of free trade
and market forces will eventually erode beyond repair.
With respect to the inclusion of procedural improvements and
other streamlining measures, it should be noted that H.R. 4784, as
amended, is designed to make the antidumping and countervailing
duty laws more accessible, less costly, less complex and time-con-
suming, and easier for the respective agencies to administer. At the
same time, the bill does not eliminate any fundamental procedural
safeguards that parties to investigations now enjoy, and it main-
tains full adherence of these laws to the substantive and procedur-
al requirements of the GATT agreements. In fact, the bill retains
the basic framework of open procedures-hearings, access to infor-
mation, and judicial reviews-that characterize present law. The
bill does eliminate needless procedural complexities, however, and
provides a much better basis for efficient administration with
fewer costs to the litigants and the prospect of more timely relief
for petitioners. These streamlining measures are essential if the
process is to avoid becoming overburdened with legalisms.
Finally, the Committee deliberately confined the scope of H.R.
4784, as amended, to revisions of the countervailing duty and anti-
dumping statutes and related issues. The Subcommittee on Trade
received many suggestions during its hearings and in subsequent
written comments about the need for reforms in the import relief
and retaliatory authorities under sections 201-203 and section 301
of the Trade Act of 1974. The decision to restrict the scope of H.R.
4784 to laws dealing with injurious unfair trade practices in the
U.S. marketplace recognizes that (1) domestic industry generally
regards unfair import competition as the primary trade problem
that needs priority attention; and (2) as a practical matter, success-
ful passage requires legislation that is manageable and limited in
controversial content. At the same time, the Committee recognizes
the need to address the adequacy and operation of other trade
remedy laws and intends to make whatever improvements are nec-
essary in a subsequent bill at the earliest opportunity.
SUMMARY OF H.R. 4784,AS AMENDED-THE TRADE REMEDIES
REFORM ACT OF 1984
H.R. 4784, as amended and ordered reported by the Committee
on Ways and Means, consists of two titles: Title I amends the scope
and certain administrative elements of the countervailing duty and
antidumping duty laws under Title VII of the Tariff Act of 1930 as
amended by the Trade Agreements Act of 1979; Title II makes re-
lated procedural improvements through the addition of two new
sections to the Tariff Act of 1930.
TITLE I.-AMENDMENTS TO COUNTERVAILING DuTY AND
ANTIDUMPING DUTY LAWS

SECTION 101.-CLARIFICATION OF GENERAL RULE

Section 101 clarifies that the countervailing duty and antidump-

ing laws cover likely sales and certain leasing arrangements, as
well as sales and imports that have already occurred.
SECTION 102.-TERMINATION OR SUSPENSION OF INVESTIGATION

The Committee deleted section 102 of H.R. 4784 as introduced,

which expedited the timetable for antidumping investigations and
shortened extensions of investigations in 'extraordinary circum-
stances." Section 102 of H.R. 4784 as ordered reported amends the
authorities to suspend countervailing duty investigations or to ter-
minate antidumping or countervailing duty investigations based
upon settlement agreements:
A. Offsets and grace periods
The use of export taxes or other types of "offsets" is eliminated
as a basis for suspending countervailing duty cases. The 6-month
grace period for eliminating a subsidy or dumping practice under a
suspension agreement is eliminated.
B. Quantitative restriction agreements
The bill as introduced limited the authority to enter into import
quota-type arrangements as a basis for suspending countervailing
duty investigations or terminating either antidumping or counter-
vailing duty cases only to circumstances in which the President de-
termined that import quotas would not have a greater adverse
effect on consumer prices and the availability of supplies than im-
position of duties. Also, the authority to accept quantitative restric-
tion agreements was shifted from the Secretary of Commerce as ad-
ministering authority to the President.
The Committee amended the provisions on quantitative restric-
tion agreements to maintain the authority of the Secretary of Com-
merce, rather than the President, to accept such agreements. The
Committee amendment also includes other public interest factors
in addition to consumer impact which the administering authority
must take into account in deciding whether to suspend or termi-
nate an investigation.
SECTION 103.-REVIEWS AND DETERMINATIONS REGARDING CERTAIN
AGREEMENTS

The Committee amended H.R. 4784 as introduced to add section

103 requiring the President to enter into negotiations within 90
days after the administering authority accepts quantitative restric-
tion agreement with the foreign government to seek elimination of
the subsidy or dumping or its reduction to a level that removes the
injurious effects. Countervailing or antidumping duties must be im-
posed to offset any remaining injurious subsidy or dumping margin
upon the expiration date, if any, of the agreement.
Annual reviews of outstanding antidumping and countervailing
duty orders are required only if requested by an interested party,
rather than in all cases as under present law.
SECTION 104.-INITIATION OF ANTIDUMPING DUTY INVESTIGATIONS

The Committee amended H.R. 4784 as introduced to add a new

section 104 to deal with the problem of persistent dumping involv-
ing several different producers in several different countries. Sec-
tion 104 strengthens guidelines for self-initiation of antidumping
investigations and requires further monitoring by the administer-
ing authority of imports from other countries once a domestic in-
dustry has proven injurious dumping from one source and then has
reason to believe that additional dumping is occurring.
SECTION 105.-DEFINITIONS AND SPECIAL RULES REGARDING UPSTREAM
AND OTHER SUBSIDIES, DOWNSTREAM DUMPING, MATERIAL INJURY,
AND INTERESTED PARTIES

The Committee deleted section 105 of H.R. 4784 as introduced,

which amended the antidumping provisions applicable to nonmar-
ket economies. Section 105 of H.R. 4784 as amended broadens the
coverage of subsidy and dumping practices subject to the counter-
vailing duty and antidumping laws, clarifies application of the
injury test, and expands the scope of parties with standing in inves-
tigations:
A. Subsidies
The list of practices specifically defined in the statute as subsi-
dies actionable under the countervailing duty law is expanded to
include export targeting subsidies, natural resource subsidies, and
upstream subsidies. The material injury test as applied under
present law must be met for countervailing duties to be imposed.
1. Export targeting subsidies.-"Export targeting subsidies" are
defined as government plans or schemes involving coordinated ac-
tivities that are bestowed on specific enterprises or industries and
have the effect of assisting the beneficiaries to become more com-
petitive in exporting particular products. The provision is intended
to deal with indirect forms of government assistance that do not
involve a cash transfer but nevertheless have a subsidizing effect.
An illustrative list of such practices is included in the bill.
2. Natural resource subsidies.-"Natural resource subsidies" in-
volve a government controlled or regulated natural resource price
that is lower for domestic use than the export price or the fair
market value, is not freely available to U.S. purchasers for export,
and constitutes a significant component cost of the product under
investigation.
A Committee amendment applies fair market value rather than
export price as the basis for measuring the level of subsidy when
there are no "significant" exports, rather then no exports at all, of
the product or when the export price is distorted.
 3. Upstream subsidies.-"Upstream subsidies" are subsidies at
prior stages of production than the final imported article made in
the same country which result in a price for the input that is lower
than the generally available price and which have a significant
effect on the cost of manufacturing the final product.
The Committee amended the definition to clarify that customs
unions would be treated as one country and that the calculation of
the amount of upstream subsidy would include only the actual ben-
efit to the manufacturer of the final product.
B. Downstream dumping
"Downstream dumping" is defined as sales of materials below
their fair market value which are incorporated into the final im-
ported product that is subsidized or dumped if the dumped price of
the input is below the generally available price of that input and
has a significant effect on the cost of manufacturing the final prod-
uct.
The Committee amended the method of calculating downstream
dumping to include only the amount of actual benefit to the manu-
facturer of the final product.
C. Clarificationof injury test provisions
1. Cumulation.-As amended by the Committee, the principle of
cumulation of imports of like products from two or more countries
under simultaneous investigation is mandated for purposes of as-
sessing injury if such imports compete with each other and with
like products of the domestic industry in the U.S. market.
2. Threat of injury.-Statutory guidelines are established for de-
termining threat of material injury, based upon previous legislative
history.
D. Interested party
The definition of an interested party with standing to file anti-
dumping or countervailing duty petitions is expanded to include
coalitions of firms, unions, or trade associations that have individ-
ual standing.
SECTION 106.-HEARINGS

The Committee amended H.R. 4748 as introduced to add section

106 which eliminates the requirement in present law that the
International Trade Commission hold duplicate hearings during its
injury investigations when antidumping and countervailing duty
cases involve the same merchandise from the same country. Oppor-
tunity is provided for submission of written comments.
SECTION 107.-VERIFICATION OF INFORMATION

Section 107 extends present requirements for verification of in-

formation to decisions by the administering authority to revoke
outstanding antidumping or countervailing duty orders.
A Committee amendment also requires verification in annual re-
views of outstanding antidumping or countervailing duty orders if
timely requested, except the requirement applies only upon good
cause shown if verification has taken place in the preceding two
annual reviews.
SECTION 108.-RELEASE OF CONFIDENTIAL INFORMATION

Section 108 establishes a new standardized method for releasing

confidential information, based upon the filing of "standing re-
quests" by all parties at the outset of an investigation and routine
decisions on release as confidential information is submitted. Cor-
porate in-house counsel could receive confidential information
under protective order as retained counsel can under present law.
SECTION 109.-SAMPLING AND AVERAGING IN DETERMINING UNITED
STATES PRICE AND FOREIGN MARKET VALUE

Section 109 authorizes sampling and averaging techniques uti-

lized by the administering authority in determining foreign market
value under the present antidumpng law also to be used in deter-
mining United States price in dumping investigations and in all as-
pects of the annual review of outstanding countervailing and anti-
dumping duty orders. The authority to select appropriate samples
and averages would reside exclusively with the administering au-
thority.
SECTION 110.-ELIMINATION OF INTERLOCUTORY APPEALS

Section 110 eliminates all interlocutory judicial review by the

U.S. Court of International Trade during the course of countervail-
ing duty and antidumping investigations. All challenges to agency
determinations would be combined and reviewable by the court
after final agency action has been taken.
TITLE II.-MISCELLANEOUS PROVISIONS

SECTION 201.-ESTABLISHMENT OF TRADE REMEDY ASSISTANCE OFFICE

AND TARGETING SUBSIDY MONITORING PROGRAM IN THE UNITED
STATES INTERNATIONAL TRADE COMMISSION
Section 201 adds two new sections to the Tariff Act of 1930 estab-
lishing new functions for the International Trade Commission.
A. Trade remedy assistance office
A central office is created in the ITC to assist U.S. industries
with information and advice on the various trade remedy laws.
Also, each agency responsible for administering trade laws is re-
quired to provide special assistance to qualifying small businesses.
B. Targetingsubsidy monitoringprogram
The International Trade Commission must establish a program
for continuous and coordinated monitoring and analysis of the in-
dustrial plans and policies of foreign governments. Regular reports
would be issued on the information obtained.
SECTION 202.-ADJUSTMENTS STUDY

Section 202 requires the Secretary of Commerce to conduct a

study of its current practices in making adjustments to various
prices used under the antidumping law and submit a report to the
Congress within one year containing recommendations as appropri-
ate for simplifying and modifying these practices.
SECTION 203.-EFFECTIVE DATES

The provisions of H.R. 4784, as amended, would take effect on

date of enactment except as otherwise specified.
COMMITTEE ACTION

The Subcommittee on Trade held seven days of hearings on

March 16 and 17, April 13, 14, and 19, and May 4 and 11, 1983, to
consider options to improve the various trade remedy statutes, in.
cluding the countervailing duty and antidumping laws (published
in Committee on Ways and Means Serials 98-14 and 98-15). During
those hearings, the Subcommittee received extensive testimony
from Members of Congress, officials of Executive branch agencies,
trade associations, labor unions, retail and consumer groups, indi-
vidual companies, legal practitioners, academicians, and other indi-
viduals describing problems with existing laws and proposing modi-
fications. The Subcommittee held an additional day of hearings on
October 20, 1983, to receive testimony specifically on issues relating
to subsidization of natural resources.
On September 28, October 3 and 4, 1983, and on February 2 and
7, 1984, the Subcommittee held markup sessions on conceptual
amendments to the antidumping and countervailing duty laws,
based upon suggestions received during the hearings, extensive
written comments received subsequent to the hearings, and other
pending legislation. H.R. 4784 was introduced on February 8, 1984,
to reflect Subcommittee decisions during these markup sessions. In
a final markup session on February 9 the Subcommittee agreed to
three substantive amendments in H.R. 4784. On February 29, 1984,
the Subcommittee ordered H.R. 4784 favorably reported by voice
vote to the full Committee on Ways and Means with the amend-
ments agreed to on February 9.
On April 3, 4, and 10, the Committee on Ways and Means consid-
ered H.R. 4784 as reported in markup sessions. On April 10, the
Committee ordered H.R. 4784 favorably reported with amendments
by nonrecorded vote.
SECTION-BY-SECTION ANALYSIS, JUSTIFICATION, AND COMPARISON
WITH PRESENT LAW

SHORT TITLE

H.R. 4784, as amended, may be cited as the "Trade Remedies

Reform Act of 1984."
SECTION 2.-REFERENCE
Section 2 states that any amendment or repeal in H.R. 4784 of a
title, subtitle, part, section, or other provision refers to such provi-
sions in the Tariff Act of 1930, unless otherwise expressly provided.
 SECTION 101.-CLARIFICATION OF GENERAL RULE

Present law
Section 701(a) states the general rule that a countervailing duty
shall be imposed where (1) the administering authority finds a sub-
sidy with respect to merchandise "imported into the United States"
and (2) the ITC finds that an industry is materially injured or
threatened with such injury "by reason of imports of that merchan-
dise." Section 731 requires the administering authority to deter-
mine in antidumping investigations that "foreign merchandise is
being, or is likely to be, sold in the United States at less than its
fair value." [Emphasis added]
Explanationof provision
Section 101 of H.R. 4784 clarifies the applicability of countervail-
ing duty law to situations where a product has been or is likely to
be sold for importation but has not actually been imported. Subsec-
tion (a) amends section 701(a) to include the phrase "or sold (or
likely to be sold) for importation" after the present enabling lan-
guage of the statute, which refers solely to merchandise imported.
Subsections (a) and (b) make conforming changes in sections 701
and 705(b)(1).
Section 101 also clarifies the applicability of both the countervail-
ing duty and antidumping laws to leasing arrangements that are
the equivalent of sales. Subsections (a) and (c) amend sections 701,
705, 731, and 735 by providing that any reference to sales also in-
cludes such leases.
Reasons for change
Section 101 is intended to eliminate uncertainties about the au-
thority of the Department of Commerce and the ITC to initiate
countervailing duty cases and to render determinations in situa-
tions where actual importation has not yet occurred but a sale for
importation has been completed or is imminent. Antidumping law
has, since its inception, applied not only to imports but to sales or
likely sales. However, there has been uncertainty as to the applica-
bility of countervailing duty law to such situations because of the
limiting language which refers solely to imports.
The amendment is particularly important in cases involving
large capital equipment, where loss of a single sale can cause im-
mediate economic harm and where it may be impossible to offer
meaningful relief if the investigation is not initiated until after im-
portation takes place. In cases where injury or threat of injury
from a subsidy may occur prior to actual importation, the investi-
gation should not await such importation.
The addition of language regarding leases is intended to clarify
the applicability of both laws to sham leases or leases which are
tantamount to sales. Because of tax considerations or other busi-
ness reasons, leasing arrangements are often utilized to accomplish
what are in effect transfers of ownership. The Committee intends
that the coverage of both laws extend to such arrangements if the
Department of Commerce finds them to be equivalent to sales.
 SECTION 102 (OF H.R. 4784 AS INTRODUCED).-PERIOD FOR CERTAIN
PRELIMINARY DETERMINATIONS; CONGRESSIONAL NOTIFICATION

Section 102 of H.R. 4784 as introduced provided simultaneous

timetables for investigations and determinations in antidumping
and countervailing duty cases based on the shorter deadlines appli-
cable to countervailing duty cases under present law. Specifically,
section 102 amended section 733(b) to require a preliminary deter-
mination by the administering authority within 85 days after an
antidumping petition is filed or an investigation self-initiated,
rather than within the 160 days provided under present law. Sec-
tion 102 of the bill as introduced also amended sections 703(c) and
733(c) to limit further the authority to extend the deadline for pre-
liminary determinations by declaring a countervailing duty or anti-
dumping investigation "extraordinarily complicated." Such exten-
sions would be reduced to 30 days and the administering authority
would be required to notify the appropriate Committees of Con-
gress, in addition to the parties to the investigation as under
present law, of an intention to postpone any preliminary determi-
nation, including an explanation of the reasons.
These amendments were included in the bill as introduced in
order to accelerate antidumping determinations and thereby pro-
vide earlier provisional relief, and to end the almost routine prac-
tice of extending deadlines for preliminary determinations without
due regard to Congressional intent that the case be extraordinarily
complicated. In particular, the provision of simultaneous timetables
was intended to reduce costs and the administrative burden and
delay for both interested parties and the ITC by eliminating the ne-
cessity for two hearings on injury in cases involving petitions filed
under both laws on the same merchandise from the same country.
The Committee deleted this section after receiving evidence from
the Department of Commerce and from domestic industries oppos-
ing the amendments and indicating that the current length of time
for antidumping investigations is necessary to ensure adequately
supported decisions, to provide a meaningful opportunity for peti-
tioners to comment on information presented by foreign parties,
and to reduce the possibilities of expensive and lengthy judicial
review. The Department also has not extended deadlines in a single
case since August 1, 1983. In lieu of this section, the Committee
amended the bill to add section 106 addressing the issue of dupli-
cate ITC hearings.
SECTION 102 (OF H.R. 4784 AS REPORTED).-TERMINATION OR
SUSPENSION OF INVESTIGATION

Present law
Sections 704(a) and 734(a) of the countervailing duty and anti-
dumping laws respectively authorize the administering authority
or the ITC to terminate an investigation, after notice to all parties,
upon withdrawal of the petition. The ITC cannot terminate before
a preliminary determination by the administering authority. The
law does not specify or limit the circumstances under which a peti-
tion may be withdrawn and the investigation thereby terminated,
although to date there have been no petitions withdrawn and cases
thereby terminated prior to a preliminary determination.
Settlement of countervailing duty or antidumping cases through
suspension of investigations may result from agreements either (1)
to eliminate (or offset) the practice or to cease the exports; or (2) in
"extraordinary circumstances," to eliminate the injurious effect of
the exports.
The administering authority may suspend a countervailing duty
investigation under section 704(b) at any time before its final deter-
mination if the government of the subsidizing country agrees, or
exporters who account for substantially all of the imports of the
merchandise agree (1) to eliminate the subsidy completely or to
offset completely the amount of the net subsidy on exports to the
United States within six months after the suspension, or (2) to
cease exports of the subsidized merchandise to the United States
within six months after the suspension.
The administering authority may suspend an antidumping inves-
tigation under section 734(b) before its final determination if the
exporters who account for substantially all of the imports of the
merchandise agree (1) to cease exports of the merchandise to the
United States within six months after the suspension, or (2) to
revise their prices to eliminate completely any dumping margin.
No suspension agreement can be accepted under either law
unless it provides a means of ensuring that the quantity exported
to the United States during the interim period before complete
elimination or offset of the subsidy or cessation of exports does not
exceed the quantity exported to the United States during the most
recent representative period.
In "extraordinary circumstances," the administering authority
may also suspend a countervailing duty investigation under section
704(c) before its final determination upon acceptance of an agree-
ment from the government or from exporters accounting for sub-
stantially all of the imports that will eliminate completely the inju-
rious effect of exports of the merchandise to the United States. Sus-
pension may take the form of an agreement with the foreign gov-
ernment (not with exporters) to restrict the volume of imports.
In "extraordinary circumstances," the administering authority
may suspend an antidumping investigation under section 734(c)
before its final determination upon acceptance of an agreement to
revise prices from exporters accounting for substantially all of the
imports that will eliminate completely the injurious effect of ex-
ports of the merchandise to the United States. The agreement must
also prevent the suppression or undercutting of price levels of do-
mestic products by imports of the merchandise, and for each entry
of each exporter the amount by which the estimated foreign
market value exceeds the U.S. price cannot exceed 15 percent of
the weighted average excess for all less-than-fair-value entries of
the exporter. Unlike countervailing duty cases, the administering
authority is not authorized to suspend antidumping investigations
on the basis of quantitative restriction agreements.
Legislative history states the "injurious effect" standard is lower
than material injury; there must be no discernable injurious effect
by reason of any remaining net subsidy or dumping margin. Agree-
ments with exporters must be with the U.S. Government, not
among exporters or with U.S. private parties.
Before suspending any countervailing duty or antidumping inves-
tigation, sections 704(e) and 734(e) require the administering au-
thority (1) to notify and consult the petitioner of its intention, and
give 30 days advance notice to other parties and to the ITC; (2) to
provide a copy of the proposed agreement to the petitioner at the
time of notification, including an explanation of how it will be car-
ried out and enforced and how it meets the statutory requirements;
and (3) to permit all parties to submit comments and information
for the record before the notice of suspension is published.
No form of suspension agreement can be accepted unless the ad-
ministering authority is satisfied suspension is in the public inter-
est and effective monitoring of the agreement by the United States
is practicable. The administering authority must publish notice of
any suspension of investigation and issue an affirmative prelimi-
nary determination unless it was previously issued.
Within 20 days after suspension of an investigation under an
agreement to eliminate injurious effects, a domestic interested
party may request under section 704(h) or section 734(h) a review
by the ITC, within 75 days after the petition filing, to determine
whether the injurious effect of imports of the merchandise is elimi-
nated completely by the agreement. If affirmative, suspension con-
tinues as long as the agreement remains in effect, is not violated,
and meets the statutory requirements. If negative, the agreement
is void and the investigation resumes on the date notice is pub-
lished, as if the affirmative preliminary determination was made
on that date.
An investigation must be continued if the administering author-
ity receives, within 20 days after notice of suspension is published,
a request for continuation under section 704(g) or section 734(g)
from a domestic interested party or from the foreign government
involved in a countervailing duty investigation, or from the export-
ers in an antidumping investigation. If the final determination is
negative, the agreement and investigation terminate. If the final
determinations are affirmative, a countervailing or antidumping
duty order is not issued so long as the agreement remains in force
and continues to meet the statutory requirements and the parties
carry out their agreement obligations.
If the administering authority determines under section 704(i) or
section 734(i) that an agreement is being or has been violated or no
longer meets the requirements (other than elimination of injury),
the administering authority must (1) suspend liquidation of unliqui-
dated entries; (2) resume its final investigation if it was not com-
pleted; (3) issue a countervailing duty or antidumping order imme-
diately if the investigation was continued upon request and the
final determinations were affirmative; and (4) notify the petitioner,
interested parties, and the ITC. Any intentional violation is subject
to a civil penalty as if it were a section 592 fraud case. If suspen-
sion is terminated or an investigation continued, any final determi-
nation or annual review considers all imports without regard to
the effect of any agreement.
Explanation of provision
Section 102 of H.R. 4784 as ordered reported amends the authori-
ties to terminate or suspend countervailing duty or antidumping
investigations in three major respects: (1) It eliminates the author-
ity to suspend countervailing duty investigations based on offsets of
net subsidies by the foreign government or exporters; (2) it removes
the 6-month grace period for eliminating subsidies or dumping
margins under suspension agreements; and (3) it requires the ad-
ministering authority to take various public interest factors into
account in deciding whether to terminate or suspend countervail-
ing duty investigations or to terminate antidumping investigations
based on quantitative restriction agreements. In addition, section
102 requires notification of the Commissioner of Customs if the ad-
ministering authority considers violation of an agreement to be in-
tentional.
Section 102 eliminates the authority under section 704(b)(1) to
suspend a countervailing duty investigation based on an agreement
by the foreign government involved or by exporters who account
for substantially all of the merchandise subject to the investigation
to offset completely the amount of the net subsidy on merchandise
exported to the United States. Investigations could be suspended on
the basis of agreements to eliminate the subsidy completely or to
cease exports of the subsidized merchandise to the United States as
under present law.
Section 102 also amends section 704(b) and (d) and section
734(b)(1) and (d) to eliminate the 6-month period after the date on
which a countervailing duty or antidumping investigation is sus-
pended within which the foreign government or exporters agree to
eliminate the net subsidy involved or to cease exports of the mer-
chandise to the United States. As a result of these amendments in-
vestigations could be suspended under these authorities only if the
foreign government or exporters involved agree to eliminate any
net subsidy or to cease exports of the merchandise to the United
States on the date of the suspension.
Section 102 of H.R. 4784 as introduced amended the authority
under section 704(c) to suspend countervailing duty investigations
in extraordinary circumstances on the basis of quantitative restric-
tion agreements in two respects. First, the authority to accept any
quantitative restriction agreement was shifted from the adminis-
tering authority under present law to the President. Second, as a
condition for accepting such an agreement, the President was re-
quired to determine, following consultations with potentially affect-
ed consuming industries and with all U.S. producers of like mer-
chandise, that entry into force of the quantitative restriction would
not, based upon the relative impact on consumer prices and the
availability of supplies of the merchandise, have a greater adverse
effect on U.S. consumers than the imposition of countervailing
duties. Sections 704 and 734 were also amended to include these
same two limitations with respect to the termination of counter-
vailing duty or antidumping investigations on the basis of import
quota agreements.
The Committee amended the provisions of section 102 as intro-
duced relating to quantitative restriction agreements in two re-
 spects. First, the Committee restored the authority of the adminis-
tering authority as under present law to accept quantitative re-
striction agreements in all cases, rather than shifting this author-
ity to the President. Second, the Committee included other factors
which the administering authority must take into account in addi-
tion to consumer impact in deciding whether termination of a
countervailing duty or antidumping investigation or suspension of
a countervailing duty investigation is in the public interest.
As ordered reported, section 102 amends section 704(d) by enu-
merating certain factors which the administering authority must
take into account in deciding whether suspension of a countervail.
ing duty investigation on the basis of a quantitative restriction
agreement is in the public interest. As under present law, the ad-
ministering authority cannot accept import restrictions or any
other form of agreement under section 704(b) or (c) as a basis for
suspending a countervailing duty investigation unless it is satisfied
that suspension of the investigation is in the public interest. In the
case of quantitative restriction agreements, section 704(d) as
amended by the Committee requires the administering authority to
take into account the following factors, in addition to such other
public interest factors as are considered necessary or appropriate:
(1) Whether, based upon the relative impact on consumer
prices and the availability of supplies of the merchandise, the
agreement would have a greater adverse impact on U.S. con-
sumers than the imposition of countervailing duties;
(2) The relative impact on the international economic inter-
ests of the United States; and
(3) The relative impact on the competitiveness of the domes-
tic industry producing the like merchandise, including any
such impact on employment and investment in that industry.
Before making a decision regarding the public interest, the ad-
ministering authority must consult with potentially affected con-
suming industries and with potentially affected producers and
workers in the domestic industry producing the like merchandise,
including such producers and workers not party to the investiga-
tion.
The requirement under section 704(d) of present law that effec-
tive monitoring of the agreement by the United States is practica-
ble would continue to apply as the second condition for acceptance
of any form of suspension agreement, including import quotas.
There would still be no authority to suspend antidumping investi-
gations under any circumstances on the basis of quantitative re-
striction agreements.
Since petitions have been withdrawn and investigations termi-
nated in the past on the basis of quantitative restriction agree-
ments, section 102 as ordered reported also amends sections 704(a)
and 7 3 4(a) to conform the authorities to terminate countervailing
duty or antidumping investigations as a result of quantitative re-
striction agreements to the amendments described above in the au-
thority to suspend countervailing duty investigations. Invesatiga-
tions under either law could not be terminated by the administer-
ing authority accepting any agreement to limit the volume of im-
ports into the United States of the merchandise under investiga-
tion unless the administering authority is satisfied that termina-
tion on the basis of that agreement is in the public interest. In
making a decision regarding the public interest, the administering
authority must take into account the same three factors described
above with respect to suspension of countervailing duty investiga-
tions based on import quota agreements, after consulting with po-
tentially affected consuming industries and with potentially affect-
ed U.S. producers and workers in the domestic industry producing
the like merchandise. Any such agreement to terminate counter-
vailing duty investigations must be offered by the foreign govern-
ment involved, not by exporters, consistent with suspension agree-
ments. The administering authority and the ITC would retain their
present authority to terminate investigations in any circumstances
not involving import restrictions.
Any quantitative restriction agreement to terminate a counter-
vailing duty or antidumping investigation or to suspend a counter-
vailing duty investigation also includes any understanding accepted
by the administering authority that restricts the volume of imports
of the merchandise under investigation into the United States,
such as voluntary export restraints.
The authorities to accept agreements with foreign governments
or exporters exist solely as a basis for terminating or suspending
antidumping or countervailing duty investigations. Agreements
apply only to the products and countries under investigation, and
consist only of those measures enumerated in sections 704 and 734
of present law undertaken by the foreign government or exporters
involved to eliminate or limit their injurious practices. These exist-
ing authorities and the amendments to them in section 102 of the
bill do not contemplate or authorize any separate or additional ad-
ministrative action to regulate U.S. interstate commerce or the
export of U.S. goods. The sole result of such agreements is the sub-
stitution for potential imposition of duties of either quantitative
import restrictions or the cessation of the exports or of the offend-
ing practice by the foreign government. The only recourse in the
absence of such agreements is either termination upon withdrawal
of the petition or continuation of the investigation and, if appropri-
ate, imposition of antidumping or countervailing duties. The bill
also does not in any way expand authority to enforce such agree-
ments or to impose penalties for violations of such agreements
beyond such authorities in present law.
Finally, section 102 amends sections 704(i)(1) and 734(i)(1) by
adding a requirement that the administering authority notify the
Commissioner of Customs if it considers a violation of an agree-
ment suspending a countervailing duty or antidumping investiga-
tion to be intentional. The Commissioner would then take appropri-
ate action as provided under section 704(i)(2) or section 734(i)(2) of
present law.
Reasons for change
The Committee is concerned that the authorities under present
law to terminate or suspend investigations based on settlement
agreements contain too much flexibility and discretion. As a result,
subsidy or dumping practices have been permitted to continue and
the antidumping and countervailing duty laws have been used as a
device to implement quantitative import restrictions, including vol-
untby istraints, without sufficient consideration of their econom-
ic consequences, and contrary to Congressional intent that the pri.
mary remedy be offsetting duties. The amendments under sections
102 and 103 of H.R. 4784, as ordered reported, place further condi-
tions on the use of the settlement authorities with a view to seek-
ing elimination of the unfair practices, while at the same time rec.
ognizing that termination or suspension agreements may be in the
national interest under certain limited circumstances.
The Committee has received many complaints from the private
sector about the acceptance of agreements from foreign govern.
ments to offset the complete amount of net subsidies as a basis for
suspending countervailing duty investigations under section 704(b).
Normally offsets take the form of the foreign government agreeing
to impose an export tax equal to the amount of the net subsidy,
theoretically equivalent to an import duty. However, there is no re-
quired verification that the tax is actually being collected. In the
case of State-owned enterprises there is no guarantee that the gov-
ernment is not funneling funds into the enterprise through various
indirect assists as a substitute for the subsidy in order to ensure
export competitiveness. Any delays in the calculation of an export
tax will increase benefits to exporters if there are frequent and
sharp devaluations of the currency.
Consequently, the Committee believes elimination of the author-
ity to accept agreements to impose offsets as a basis for suspending
countervailing duty investigations is necessary in order to close the
present loophole which permits foreign governments to continue
their subsidy practices. In turn, use of offsets could not constitute
changed circumstances for purposes of review and possible revoca-
tion of a countervailing order under section 751. However, existing
export taxes, duties, or other charges, if they are verifiable, could
still be applied as offsets to reduce the amount of gross subsidy in
order to determine the net subsidy under section 771(b) on which a
countervailing duty is based.
The Committee also believes that the ability of a foreign govern-
ment or exporters to continue to subsidize or to sell at less than
fair value for up to six months under a suspension agreement is
unwarranted, exposing domestic industry to the effects of contin-
ued unfair competition without a remedy during this period. Pre-
cluding suspension of an investigation until the foreign subsidy or
dumping actually ceases is also intended to provide an incentive
for the foreign government or exporters to eliminate the unfair
practice as quickly as possible.
The limitation placed by section 102 of the bill as amended on
existing authorities to terminate or suspend investigations based
on agreements to restrict imports arise from the Committee's con-
cern that the countervailing duty and antidumping laws can be
used by domestic industries and foreign governments to obtain
cartel or orderly marketing arrangements that may be contrary to
the public interest, including the interest of the domestic industry
itself and its workers, while allowing unfair trade practices to con-
tinue. For example, certain segments of the steel industry have
complained that they were not even consulted in advance about the
United States-European Communities (EC) Steel Arrangement, con-
cluded in 1982 as a basis for withdrawal of petitions by other por-
tions of the industry and termination of investigations. They main-
tain the Arrangement has had a detrimental impact in terms of
higher prices and reduced supplies of basic steel for steel finishers
and fabricators.
Under present law, a domestic industry may withdraw its peti-
tion and the administering authority terminate an investigation as
a result of an import quota arrangement without any consideration
of the relative economic consequences. The amendments under sec-
tion 102 seek to prevent abuse of the termination and suspension
authorities by limiting settlement of cases based on quantitative re-
strictions only to the circumstances in which the administering au-
thority decides that import quotas will not be more adverse to the
public interest than imposition of duties. The Committee amended
section 102 as introduced to expand the public interest factors
which must be taken into account to include not only the impact
on consumer prices and supplies but also other relevant effects,
such as the impact on the competitiveness of the domestic industry,
including its workers and investment, and on international eco-
nomic interests. The amendments also ensure that all segments of
the industry potentially affected, including its workers, would be
consulted in deciding the public interest.
Basically, the countervailing duty and antidumping laws should
be used as Congress intended to try to ensure free and fair trade
competition. In most cases the investigation should be completed
and duties imposed rather than permitting the foreign country to
continue unfair trade practices and using these laws to guarantee
either the domestic industry of foreign producers a share of the
U.S. market. At the same time, however, the Committee recognizes
that settlement of cases based on import quotas may be warranted
and have less adverse effects on the public interest than imposition
of duties in certain circumstances. While the Committee believes it
is necessary to limit the administering authority's discretion, sec-
tion 102 maintains sufficient flexibility to permit quotas as one
method of limiting the adverse effects of unfair trade in appropri-
ate cases.
The Committee also decided there was not sufficient justification
based on performance to date to shift the authority to accept quan-
titative restriction agreements from the Department of Commerce
to the President. The Committee was concerned that such a shift
would necessarily involve other agencies in decisions whether to
accept agreements, such as the Department of the Tresury in
which the Congress lost confidence prior to 1979 in its administra-
tion and enforcement of the trade remedy laws.
SECTION 103.-REVIEWS AND DETERMINATIONS REGARDING CERTAIN
AGREEMENTS
Present law
Section 751(a) requires that at least once during each 12-month
period following publication of a countervailing duty or antidump-
ing order, or notice of suspension of an investigation, the adminis-
tering authority must (1) review and determine the amount of any
net subsidy; (2) review and determine the amount of any antidump-
ing duty; and (3) review the current status of, and compliance with,
any suspension agreement including the amount of any net subsidy
or dumping margin involved.
Section 751(b) requires the administering authority or the ITC to
review any suspension agreement of affirmative determinations
whenever it receives information or a request showing changed cir.
cumstances sufficient to warrant a review. The Commission consid-
ers whether, in light of changed circumstances, an agreement sus-
pending a countervailing duty or antidumping investigation contin.
ues to eliminate completely the injurious effects of imports of the
merchandise. Without good cause shown, no suspension agreement
or final affirmative determination can be reviewed for changed cir-
cumstances within less than 24 months after its publication. A
hearing is held by the administering authority or the Commission
during the review upon the request of any interested party. After
the review, the administering authority may revoke a countervail-
ing duty or antidumping duty order, in whole or in part, or termi-
nate a suspended investigation, applicable to unliquidated entries
entered, or withdrawn from warehouse, for consumption after a
date it determines. If the Commission determines a suspension
agreement no longer eliminates completely the injurious effect of
imports, the agreement is then treated as not accepted and the ad-
ministering authority and the Commission proceed with the coun-
tervailing duty or antidumping investigation as if the agreement
had been violated on that date.
Explanation of provision
The Committee amended H.R. 4784 as introduced to add a new
section 103 in conjunction with the amendments in section 102 con-
cerning the authorities to terminate countervailing duty or anti-
dumping investigations or to suspend countervailing duty investi-
gations based on quantitative restriction agreements. Section 103
adds two requirements that (1) during the first year any quantita-
tive restriction agreement is in effect the President seek complete
elimination of the subsidy or dumping practices or of their injuri-
ous effects; and (2) countervailing or antidumping duties in the
amount of any residual subsidy or dumping margin on imports
causing material injury replace the quantitative restriction agree-
ment upon its expiration. Section 103 also amends section 751 to
require annual reviews of outstanding countervailing duty or anti-
dumping orders only upon request.
Section 103 amends subtitle C of title VII of the Tariff Act of
1930 to add a chapter 2 containing new sections 761 and 762 and to
make conforming changes in section 751 of present law.
New section 761 requires the President, within 90 days after the
administering authority accepts a quantitative restriction agree-
ment as a basis for terminating or suspending a countervailing
duty investigation under section 7 04(a)(2) or (c)(3) as amended, or
for terminating an antidumping investigation under section
734(a)(2) as amended, to enter into negotiations with the foreign
government that is party to the agreement. The objective of the ne-
gotiations is to obtain (1) elimination of the subsidy or dumping
practice, or (2) reduction of the net subsidy or the dumping margin
to a level that eliminates completely the injurious effect of exports
of the merchandise to the United States.
 The administering authority may not implement any modifica-
tion to a quantitative restriction agreement as a result of these ne-
gotiations unless within one year after the date it accepted the
agreement the following conditions are met:
(1) The President submits to the administering authority and
provides at the same time to persons who were, or are, peti-
tioners and interested parties in the related proceedings (a) a
description of the proposed actions the government is willing
to take in order to achieve the negotiating objective; and (b)
the proposed modifications to the quantitative restrictions in
the agreement that the President believes are justified in re-
sponse to implementation of those actions.
(2) The administering authority decides, on the basis of the
best information available to it, that the proposed actions will
either eliminate completely the subsidy or dumping practice or
reduce the net subsidy or dumping margin.
(3) If the administering authority decides that the subsidy or
dumping margin will be reduced, the ITC decides, on the basis
of the best information available to it, that the proposed ac-
tions and proposed modifications in the quantitative restric-
tions are likely to eliminate completely the injurious effect of
exports of the merchandise to the United States.
(4) The administering authority invites the comment of the
present or former petitioners and other interested parties re-
garding the proposed actions and proposed modifications and
takes into account all such comments that are submitted in a
timely fashion.
(5) The administering authority is satisfied that the govern-
ment concerned has actually implemented actions to eliminate
the subsidy or dumping practice or to reduce the net subsidy or
dumping margin to a level that eliminates completely the inju-
rious effects.
Elimination of the subsidy or dumping practice or of its injurious
effects must occur within the first 12 months that a quantitative
restriction agreement is in effect if any modification is to be made
by the administering authority in the import quota levels. The pro-
visions regarding negotiations and possible modification of quanti-
tative restrictions also cease to apply in the case of any such agree-
ment suspending a countervailing duty investigation at such time
as the agreement ceases to have force and effect because of a final
negative determination in a requested continuation of the investi-
gation under section 704(f) or because of a violation of the agree-
ment found under section 704(i). While the annual review provi-
sions of section 751(a) would continue to apply in the case of sus-
pension agreements, section 103 amends section 751(b)(1) to exempt
suspension agreements involving quantitative restrictions from the
provisions for review due to changed circumstances given the inter-
im review required under new section 761.
New section 762 requires that before the expiration date, if any,
of any quantitative restriction agreement two determinations must
be made:
(1) The administering authority must determine whether any
subsidy is being provided, or whether the merchandise is being
sold in the United States at less than fair value. If so, the ad-
 ministering authority must also determine the amount of the
net subsidy or the dumping margin as under present law.
(2) The ITC must determine whether imports of the kind of
merchandise subject to the agreement will, upon its termina.
tion, cause or threaten to cause material injury to the domestic
industry or materially retard establishment of such an indus.
try.
These two determinations must be made on the record under
procedures the two respective agencies prescribe by regulations.
These determinations would be treated as final determinations
made under section 705 or section 735 for purposes of judicial
review under section 516A. The administrating authority and the
Commission would hold hearings in accordance with section 774, as
amended by section 106, at the request of any interested party in
connection with its proceedings. If the determinations by both
agencies are affirmative, the administering authority must issue a
countervailing duty or antidumping duty order under section 706
or section 736 effective with respect to merchandise entered on or
after the termination date of the agreement. Section 103 also
amends section 751(b)(1) to apply the provisions for review due to
changed circumstances to any affirmative determinations made
under new section 762(a).
Finally, section 103 amends section 751(a)(1) to require annual re-
views of outstanding countervailing duty or antidumping duty
orders and of suspension agreements only if a request for such a
review has been received by the administering authority.
Reasons for change
Under present law, there is no procedure following the accept-
ance of a quantitative restriction agreement to seek elimination of
the unfair practice; the import quotas in effect, permits the unfair
practice to continue as long as a specified volume of imports is not
exceeded. In the past, settlement of countervailing duty or anti-
dumping investigations has occurred on the basis of import quotas
because of the existence of subsidies or dumping margins so large
that a product likely would be totally withdrawn from the U.S.
market should the countervailing or dumping duties be applied.
The requirements to conduct negotiations and to replace import
quotas with duties of offset the amount of any injurious residual
subsidy or dumping margin if a quantitative restriction agreement
expires are directed toward seeking an end to extensive subsidy
and dumping practices. The possibility of modifications in the
import quota levels provides an incentive to a foreign country to
eliminate or reduce its unfair trade practices before the agreement
expires and countervailing or antidumping duties are imposed. At
the same time, the interests of the domestic industry in maintain-
ing a remedy are protected by prohibiting any modification in the
import quota except by the administering authority after it has
taken into account any comments from the private sector and is
satisfied that the foreign country has actually eliminated the of-
fending practice or its injurious effects.
The purpose of amending the annual review requirement is to
reduce the administrative burden on the Department of Commerce
of automatically reviewing every outstanding order even though
circumstances do not warrant it or parties to the case are satisfied
with the existing order. The increasing number of outstanding
orders subject to review each year imposes an unnecessarily heavy
burden on limited staff resources.
SECTION 104.-INITIATION OF ANTIDUMPING DUTY INVESTIGATIONS

Present law
Section 732(a) requires the administering authority to self-initi-
ate an antidumping duty investigation whenever it determines,
from information available to it, that a formal investigation is war-
ranted into the question of whether the elements necessary for the
imposition of a duty under section 731 exist. There is no formal re-
quirement regarding monitoring of products subject to existing
antidumping orders to determine whether self-initiation with re-
spect to additional suppliers is warranted.
Explanation of provision
The Committee amended H.R. 4784 as introduced to add a new
section 104, which pertains to situations where persistent dumping
of the same product from several different countries may be occur-
ring, and where injury to the domestic industry from dumping
practices has already been established within the previous two
years. Seciton 104 amends section 732(a) to establish a procedure
for the administering authority and the ITC to monitor imports
from additional supplier countries in order to determine whether
possible self-initiation of additional dumping cases is warranted. In
order for monitoring to be required, three conditions must be met.
First, there must have been a prior case within the previous two
years resulting in final affirmative determinations of dumping and
injury regarding the product in question. Second, the peititioner
must file a formal petition under section 732(b) with respect to im-
ports of the same product from another country. Third, the subse-
quent petition must also allege that the elements necessary to
impose duties exist with respect to the same product imported, or
likely to be imported, from one or more additional supplier coun-
tries.
Upon receipt of the subsequent petition alleging persistent dump-
ing, the administering authority must decide within 20 days wheth-
er supporting information reasonably available to the petitioner
supplied in the petition and any relevant information available to
the agency regarding each additional supplier country is sufficient
to warrant self-initiation of investigations. If so, it must commence
such investigations. If the adminstering authority finds that self-
initiation with respect to an additional supplier country is not war-
ranted, both the administering authority and the Commission must
monitor imports from that country for such period of time (but not
less than one year) as may be necessary for the administering au-
thority to decide whether an investigation is warranted. If, at any
time during such monitoring, there is sufficient evidence to com-
mence a formal investgation, then the administering authority is
required to self-initiate an investigation immediately.
The scope and extent of monitoring activities will depend upon
the fact and circumstances of each case and the resources available
to the agencies. However, monitoring activities could include peri.
odic comparisons (using appropriate sampling techniques and rely.
ing on information reasonably available to the agencies) of U.S. sales
prices with estimated foreign market values, and may also include
monitoring of the level and growth of imports. Such monitoring
should include each additional supplier country, unless, during the
course of such monitoring, the administering authority finds that
allegations regarding a particular country are frivolous.
The new provision also requires that self-initiated prooceedings
resulting from the monitoring activities described above be expedit
ed "to the extent practicable" by the administering authority and
the Commission. The extent to which procedures can be expedited
will depend upon the amount of information already collected
during monitoring and the degree to which normal antidumping
investigation procedures can thereby be shortened.
Reasons for change
Section 732(a) as amended by section 104 is intended to reduce
the burdens and costs on U.S. industry of obtaining relief from per.
sistent dumping. The amendment does not change any of the basic
requirements of providing dumping and injury for imposing duties
on products from subsequent supplier countries. The monitoring ac-
tivity should not be interpreted as a formal investigation, and is
merely a necessary form of pre-investigative activity which the
Committee believes is justified where a pattern of persistent dump-
ing has emerged from the filing of consecutive petitions and from
the existence of a previous affirmative finding. The Committee ex-
pects the Department of Commerce to take an activist role against
persistent dumping, and the monitoring is intended to form a
better framework for self-initiation so that the Department will be
more active in addressing this problem.
The Committee's concern over more effective monitoring of per-
sistent dumping allegations arises because several domestic produc-
ers have brought successful cases only to find that the source of
dumped imports has shifted to additional supplier countries. The
domestic producers do not always have the resources to pursue
action against every foreign producer engaging in dumping activi-
ties, and the U.S. Government should share more of the burden of
gathering information and initiating cases where appropriate if an
industry has already demonstrated that it has been injured from
foreign dumping. At the same time, the Committee does not intend
that an unnecessary burden be placed on Department of Commerce
resources and expects petitioning industries to base allegations of
persistent dumping on supporting evidence reasonably available.
SECTION 105. DEFINITIONS AND SPECIAL RULES REGARDING UPSTREAM
AND OTHER SUBSIDIES, DOWNSTREAM DUMPING, MATERIAL INJURY,
AND INTERESTED PARTIES

Section 105 of H.R. 4784 as amended expands the scope of prac-

tices subject to countervailing duty or antidumping investigations,
clarifies application of the material injury test, and expands the
definition of parties with standing in investigations.
 DEFINITION OF SUBSIDIES

Present law
Section 771(5) defines the term "subsidy" as having the same
meaning as "bounty or grant" under section 303 of the Tariff Act
of 1930 bestowed or paid with respect to an imported product, and
including but not limited to:
(1) any export subsidy in the illustrative list contained in
Annex A of the GATT Agreement on Subsidies and Counter-
vailing Measures; and
(2) the following domestic subsidies, if provided or required
by government action to a specific enterprise or industry, or
group of enterprises or industries, whether publicly or private-
ly owned, and whether paid or bestowed directly or indirectly
on the manufacture, production, or export of any class or kind
of merchandise:
(a) The provision of capital, loans, or loan guarantees on
terms inconsistent with commercial considerations;
(b) The provision of goods or services at preferential
rates;
(c) The grant of funds or forgiveness of debt to cover op-
erating losses sustained by a specific industry;
(d) The assumption of any costs or expenses of manufac-
ture, production, or distribution.
Explanation ofprovision
Section 105(a)(1) of H.R. 4784 amends the definition of the term
"subsidy" by including a new subparagraph (A) under section
771(5) to add specifically any "export targeting subsidy," any "nat-
ural resource subsidy,' or any "upstream subsidy," as described
below, to the coverage of export subsidies and domestic subsidies
which are presently subject to the countervailing duty law.
Reasons for change
The purpose of expanding the specific list of practices to be de-
fined as subsidies for purposes of the countervailing duty law is to
make that law more current in its coverage of the types of prac-
tices which governments now utilize. The law was last revised
under the Trade Agreement Act of 1979 to implement in domestic
law the provisions of the GATT Agreement on Subsidies and Coun-
tervailing Measures negotiated as part of the Tokyo round of Mul-
tilateral Trade Negotiations. That Agreement sought to prohibit
the use of export subsidies by signatory countries and to discipline
their use of domestic subsidies that cause material injury to indus-
tries or adversely affect the trade benefits of other countries.
However, intervention by governments in the marketplace to en-
hance the competitive performance of particular industries has in-
creased and the. form of subsidy practices has proliferated far
beyond the imagination of the original drafters of the term
"bounty or grant' in U.S. law or in the GATT. The Committee is
very concerned about the distortions of trade patterns caused by
subsidies and their impact on the competitiveness of domestic in-
dustries. Stronger disciplines are necessary to discourage the use of
injurious subsidies, otherwise, in the longer run, they threaten the
operation of market forces and the viability of domestic economies
as governments are forced to misallocate resources by matching
foreign subsidy levels. A remedy should be available to restore "a
level playing field" for U.S. industries in international trade com-
petition with respect to current forms of subsidy practices. Consist-
ent with GATT international trading rules, no countervailing
duties can be imposed against such practices under the bill unless
the current application and standards of material injury to the do-
mestic industry are met.
EXPORT TARGETING SUBSIDIES

Present law
No provisions.
Explanation of provision
Section 771(5)(B)(i), as added by section 105(a)(1) of the bill, de-
fines the term "export targeting subsidy" as "any government plan
or scheme consisting of coordinated actions, whether carried out
severally or jointly or in combination with any other subsidy under
subparagraph (A), that are bestowed on a specific enterprise, indus-
try, or group thereof, . . . the effect of which is to assist the benefi-
ciary to become more competitive in the export of any class or kind
of merchandise."
In addition to export or domestic subsidy practices covered under
present law, export targeting actions under subparagraph (BXi)
would include, but not be limited to, the following practices:
(1) The exercise of government control over banks and other
financial institutions that requires diversion of private capital
on preferential terms to specific beneficiaries or into specific
sectors. Provision of government loans on preferential terms,
as opposed to diversion of private capital, is defined as a subsi-
dy under present law.
(2) Extensive government involvement in promoting or en-
couraging anticompetitive behavior among specific benefici-
aries, including:
(a) Assistance in planning and establishing joint ven-
tures which have an anticompetitive export effect;
(b) Relaxation of antitrust rules normally applied to in-
dustries to assure the development of anticompetitive
export cartels;
(c) Assistance in planning or coordinating joint research
and development among selected beneficiaries to promote
export competitiveness; and
(d) Regulations concerning the division of markets or al-
location of products among selected beneficiaries.
(3) Speical protection of the home market that permits the
development of competitive exports in a specific sector or prod-
uct.
(4) Special restrictions on technology transfer or government
procurement that limit competition in a specific sector or in-
dustry and thereby promote export competitiveness.
(5) The use of investment restrictions, including domestic
content and expert performance requirements, that limit corn-
 petition in a specific sector or industry and thereby promote
export competitiveness.
Section 771(5)(B)(ii), added by section 105(a)(1), specifies that in
determining the level of an export targeting subsidy, the adminis-
tering authority must use a method of calculation which, in its
judgment and to the extent possible, reflects the full benefit of the
subsidy to the beneficiary over the period during which the subsidy
has an effect, rather than the cash cost of the subsidy to the gov-
ernment.
Reasons for change
The inclusion of export targeting as defined in new section
771(5)(B)(i) as a subsidy within the scope of the countervailing duty
law reflects the growing recognition in the United States that for-
eign industrial targeting practices can have an injurious impact
upon the viability and competitiveness of U.S. industries. Basically,
the provision applies to situations where the foreign government
has sought to develop a particular industry by creating a relatively
risk free environment to provide a competitive advantage the in-
dustry would not otherwise have under normal market conditions.
This advantage is typically achieved through a combination of
practices such as directing private capital as well as government
financial resources to the particular industry on a preferential
basis, establishing an industry cartel, providing preferential sourc-
ing of government procurement, closing the home market to for-
eign competition or investment during the establishment and de-
velopment of the industry, then perhaps subsidizing export sales.
Targeting is different from other potentially trade distorting prac-
tices in that it involves a combination of actions, any one of which
may have a marginal impact on the industry's competitiveness, but
which taken together artifically create a comparative advantage
for the selected industry.
At the same time, the provision is not directed in any way
against foreign industrial policies per se, which are solely a matter
of internal government choice. Rather, it applies only when those
targeting practices have the effect of increasing the export competi-
tiveness of a particular industry in a manner that is injurious to
U.S. producers. If such policies cause harm to U.S. industries, they
become an appropriate matter for remedy under U.S. trade laws.
The inclusion of export targeting practices as subsidies subject to
the countervailing duty law if they meet the conditions specified in
the bill is not intended to prejudice the seeking of relief under
other existing trade remedy laws as appropriate in the particular
circumstances of each case. Rather, the countervailing duty law
will provide an alternative avenue of relief from practices which
have an injurious effect on domestic industries similar to more tra-
ditional forms of subsidies.
Implementation of the exporting targeting subsidy provisions
would require a three-step determination by the Department of
Commerce. First, there must be a government scheme or plan in-
volving coordinated actions. Information obtained by the ITC and
provided the Department of Commerce under the targeting subsidy
monitoring program established under section 201 of H.R. 4784 is
intended to assist the Department in making this determination in
 a timely manner. A positive determination would require that the
targeting policy actually involve definite actions, not merely advice
or a "vision" by the government. The actions also must not be iso-
lated or uncoordinated; rather, they must be integrated into a rea-
sonably coherent plan or scheme. While a showing of specific
intent is unworkable given the unlikelihood of available evidence,
the "plan or scheme" requirement is designed to ensure that the
law deals with purposeful targeting and not with discrete forms of
government activity.
Second, the Department must determine that targeting practices
are involved. Current countervailing duty law specifically address-
es only those subsidies which involve a cash transfer to the particu-
lar industry from the government treasury, such as grants, loans,
or certain tax benefits. The inclusion of actions such as those listed
under section 771(5)(B)(i) as added by the bill supplement these
more traditional forms of subsidies with practices which, when part
of a government plan or scheme, have a subsidizing effect similar
to financial assistance in assisting a specific enterprise or industry
to become more export competitive. Export targeting subsidies may
include forms of cash assistance covered by present countervailing
duty law. However, the provision is directed primarily to the more
sophisticated, less direct techniques of subsidizing which govern-
ments have resorted to as more traditional export subsidy practices
are prohibited under international rules. The listing of targeting
practices under subparagraph (B)(i) is purely illustrative and not
exhaustive since it is not possible to anticipate the full scope of ac-
tions that governments may utilize to achieve the same results.
Third, the Department of Commerce must determine that the
export targeting subsidy has the effect of assisting a discrete class
of companies or industries to become more competitive in their
export activities. The provision does not require a showing that the
intent or purpose of the export targeting subsidy is to improve the
competitiveness of a foreign industry in the U.S. market. A deter-
mination of motivation would be extremely difficult to make and
subject to judicial challenge that would reduce the prospects for
timely relief. Rather, the effect of the government plan or scheme
must be to promote export competitiveness in a manner that is in-
jurious to U.S. industry.
As in the case of export and domestic subsidies covered by
present law, the types of actions envisioned as export targeting
subsidies would not be countervailable unless they were bestowed
upon a specific enterprise or industry or group thereof. Such prac-
tices which are generally available to industries within the country
would not be covered within the definition of export targeting sub-
sidies under subparagraph (B)(i).
Finally, no countervailing duty would be imposed on export tar-
geting subsidies unless the ITC determines that the subsidized im-
ports of the merchandise cause or threaten material injury to the
U.S. industry, except in cases where the injury test does not apply
to the country involved under present law. While individual target-
ing actions may have only a marginal impact, their cumulative
effect may create an export competitive advantage which is injuri-
ous to the U.S. industry.
 In determining the value of a targeting subsidy, section
771(5)(B)(ii) would require the Department of Commerce to use a
method of calculation which reflects as accurately as possible the
full benefits of the subsidy to the beneficiary enterprise or industry
over the period during which the subsidy has an effect, rather than
solely the cash cost of the subsidy to the government. This method
is necessary for making a realistic assessment of the actual subsidy
level in targeting cases, since many of the practices may not in-
volve a simple cash transfer and their cumulative benefit may be
greater than the current monetary value of an individual practice.
For example, closing the home market to foreign competition or
suspending antitrust laws may yield profits from higher prices and
economies of scale that confer substantial competitive advantages
to an industry that would not be offset under the current method
of assessing benefits and would neither deter the foreign practices
nor remedy the injury to U.S. industry. Depending on the circum-
stances of the particular case, the assessment of the full benefit of
the subsidy could include the effect of subsidies which were be-
stowed prior to the period of importation but which are still having
an effect on the imports of the particular merchandise.
Concerns have been expressed that certain U.S. Government
practices (for example, investment tax credits; "spillover" benefits
of defense and space research and development programs to the
computer, commercial aviation, and spacecraft industries; financ-
ing of agricultural price supports; and measures to promote forma-
tion of export trading companies) may become subject to mirror
legislation in foreign countries imposing countervailing duties
against U.S. exports. It is highly questionable however, that such
practices would constitute targeting as defined in subparagraph
(B)(i), which would require a government plan or scheme consisting
of coordinated actions assisting a specific industry to become export
competitive in a manner which is injurious to foreign producers.
The effect of such practices on sales in third country markets is not
within the scope of the injury test as defined in present law or in
the bill.
NATURAL RESOURCE SUBSIDIES

Present law
Any domestic subsidy described in section 771(5) may be subject
to a countervailing duty action if it is provided or required by gov-
ernment action to a specific enterprise or industry, or group of en-
terprises or industries. Thus, a domestic subsidy involving natural
resources may be countervailed, if it meets the specific industry
test and is a subsidy of the kind described in section 771(5).
Explanation of provision
Section 105(a)(1) of H.R. 4784 further amends the definition of
subsidy in section 771(5) to include a separate category of "natural
resource subsidies" as a new subparagraph (C) within the list of
government programs subject to countervailing duties. This provi-
sion addresses government price control mechanisms or regulations
which grant a lower price to domestic manufacturers for basic re-
source products, such as energy, than the export price or fair
market value. If such government programs meet certain criteria,
products manufactured with the use of such subsidized resources
may be subject to countervailing duties.
Under new section 771(5)(C)(i), a natural resource subsidy exists
whenever a government-regulated or controlled entity sells natural
resource products internally to its own producers at prices which,
by reason of such regulation of control, are lower than the export
price or the fair market value in the exporting coungry, whichever
is appropriate (as determined by subparagraph (C)(ii)). Two addi-
tional conditions must also be met. First, the internal price must
not be one which is freely available to U.S. producers for purchase
and export to the U.S. market. Second, the resource product, as
measured by the export price or fair market value, must constitute
a significant portion of the production costs of the final product
that is the subject of the investigation. This limitation is intended
to ensure that the subsidy test would not apply to products where
the resource component is a minor factor. However, for products
such as cement, carbon black, or fertilizers, where the resource
component as measured by the export price or fair market value
(whichever is appropriate) is significant, the Committee intends for
this provision to apply.
Under subparagraph (C)(iii), the level of a natural resource subsi-
dy for purposes of assessing the duty is the difference between the
domestic price and the export price of the natural resource prod-
uct; except that, in cases where there are no significant exports or
where the export price is distorted by government manipulation,
the administering authority must measure the subsidy by compar-
ing the domestic price to the "fair market value"-the price that
would normally apply in an arms length transaction absent govern-
ment regulation or control. Various guidelines are set forth to
govern this fair market value determination; the determination
would take into account such factors as the general world price
and the U.S. price, but would also take into account any compara-
tive advantage in the exporting country as well as such country's
access or lack of access to export markets.
Reasons for change
The purpose of adding a specific provision to address the problem
of natural resource subsidies is to discourage the growing use of
two-tiered pricing arrangements and other below cost pricing struc-
tures by resource rich countries. These policies have the unwanted
effect of subsidizing their domestic producers by affording them
preferential or below market rates for resource products. The Com-
mittee is aware of recent decisions by the Department of Com-
merce to the effect that pricing policies of this sort did not consti-
tute subsidies because in those cases such prices were generally
available to all domestic producers. However, the Committee be-
lieves that resource pricing policies of the type described in this
provision should constitute prohibited subsidies even where nomi-
nally available to all industrial users, at least in cases where the
resource in question comprises a significant portion of the final
product.
The Committee believes that policies of the type addressed by
this natural resource rule are subsidies within the meaning and
spirit of the GATT and the Agreement on Subsidies and Counter-
vailing Measures. Although the GATT recognizes a country's right
to exercise control over its natural resources, many two-tiered pric-
ing schemes distort prices to such a degree that the policies go
beyond internal control of resources but rather provide a substan-
tial subsidy to domestic production. To the extent that these poli-
cies prove injurious to U.S. industry, the Committee believes they
should be explicitly proscribed by the countervailing duty law.
New section 771(5)(C)(ii) provides for two methods of measuring
the subsidy level; the export price and, in cases where there are no
significant exports or the export price is distorted, the fair market
value. For some products, however, both tests are likely to yield
reasonably similar results. Some resource products, such as petrole-
um, tend to have a reasonably uniform world price and countries
that practice two-tier pricing may export at the general world
price. In such cases, a fair market value determination is likely to
yield similar results to an export test. For other products, however,
prices may vary a great deal from market to market, and a realis-
tic fair market value finding would have to assess such factors as
the comparative advantage of the resource-producing country and
its access or lack of access to lucrative export markets. Compara-
tive advantage does not, in this context, refer to artificial advan-
tages imposed through government control or regulation, since this
would have the effect of negating the entire provision, but refers
instead to any cost advantages enjoyed by such country by virtue of
indigenous factors such as abundant supplies or lower production
costs (including wage rates).
Implicit in the provision is the principle that a country rich in
natural resources might have a natural comparative advantage
over other countries and could therefore establish export and do-
mestic prices below the general world price and not be engaging in
a subsidy practice. The natural resource provision would apply
only where a two-tiered pricing test or a fair market value test
(whichever is appropriate) shows some form of subsidy to domestic
producers.
Subparagraph (C)(ii), as amended by the Committee, requires
that prior to fixing the level of subsidy the Department of Com-
merce must determine whether there are significant exports of the
resource product or whether the export price is distorted (signifi-
cantly higher or lower than market prices in the relevant market)
by reason of government manipulation. If there are no significant
exports, or if distortion is found, the fair market value test would
apply. The Committee amended the provision as introduced to
apply the fair market value test if there are no "significant" ex-
ports, rather than no exports at all, or if the export price is distort-
ed. In using the term "significant," the Committee intends to pre-
vent use of the export price as the benchmark for measuring the
subsidy level where the natural resource product has been exported
only in small amounts in isolated instances rather than in ordinary
commercial quantities as a normal export activity.
The question of export price distortion is a question of fact, and
will depend upon an assessment of all the surrounding circum-
stances. Export prices may be set artifically high by government
regulation to gain higher foreign exchange earnings, or may be ar-
tificially low to maintain full employment. These are only two ex-
amples of why price-distorting government manipulation may be
occurring, and there may be other factors which could underlie
such a finding. However, this assessment must be made by the De-
partment of Commerce on the basis of all available information.
The Committee intends that in making price determinations and
comparisons under the natural resource provision-with respect to
domestic prices, export prices, or any prices used to determine fair
market value-the administering authority shall not include costs
incident to transportation and handling required to move the re-
source product from its point of production to the domestic or for-
eign destination. In other words, all natural resource prices to be
used in making appropriate findings under this subsection shall be
the prices exclusive of any transportation costs, so that compari.
sons are based on the respective prices for the resource product
itself, exclusive of extraneous costs. Where prices are available
only on a delivered basis and actual transportation costs are not
readily calculable, the administering authority shall make reasona-
ble estimates of such costs. It is the Committee's understanding
that the process of adjusting prices to exclude transportation costs
would be consistent with current practice under both the counter-
vailing duty and antidumping laws.
The term "natural resource product" is not defined in the bill.
The Committee clearly intends it to apply to basic energy products,
such as petroleum, petroleum products (such as fuel oil), and natu-
ral gas. In addition, however, the Committee believes that the defi-
nition should be left flexible enough to apply in appropriate cir-
cumstances to other natural resources if they are the subject of a
two-tiered or below fair market value government pricing scheme
and are a significant portion of the resulting manufactured prod-
uct. Moreover, the term is broad enough to apply to cases where
the government pricing scheme applies to different stages of proc-
essing or refinement of the basic resource product. In the energy
area, for example, there is often a high degree of interchangeabil-
ity between basic petroleum products and products at higher stages
of refinement. The determination of whether the natural resource
provision applies to products at higher stages of refinement would
depend upon how far the government regulation or control actually
extends. However, the provision is not intended to apply automati-
cally to all items, regardless of the stage of manufacture, simply
because they were originally derived from natural resources. The
Committee's major concern is with government price control
schemes affecting the initial distribution of resource products
which favor resource-intensive domestic producers.
UPSTREAM SUBSIDIES

Present law
Section 771(5) defines the term subsidy as having the same mean-
ing as the term "bounty or grant" as that term is used in section
303 of the Tariff Act of 1930. This term has never been explicitly
defined to include or exclude subsidies bestowed on products at
prior stages of manufacture or production. The definition of domes-
tic subsidies under section 771(5) for purposes of the Tariff Act does
not explicitly refer to subsidies at prior stages, but does refer to in-
direct subsidies. Recent decisions by the Department of Commerce
have indicated some degree of coverage of subsidies at prior stages
of manufacture or production.
Explanation of provision
Section 105(b) of H.R. 4784 adds a new section 771A(a) establish-
ing new definitions and methods of calculating upstream subsidies,
which are included in the list of proscribed subsidy practices set
forth in section 771(5)(A) as added by section 105(a)(1) of the bill.
Upstream subsidies are defined under new section 771A(a) as the
types of subsidies described in section 771(5)(A) that are paid or be-
stowed by a government on a product subsequently used to manu-
facture or produce in that country merchandise which itself be-
comes the subject of either a countervailing duty or antidumping
investigation. If such an upstream subsidy results in a price for the
intermediate product that is lower than the generally available
price of that product in that country (adjusted to offset artificial
depression due to any subsidies or dumping) and has a significant
effect on the cost of manufacturing or producing the final merchan-
dise, then the amount of such subsidy is included in any counter-
vailing or antidumping duty assessed on that final product. The
Committee amended new section 771A(a)(3) to clarify that the
amount of upstream subsidy would be calculated as equal to the
difference between the price for the intermediate product and the
generally available price of that product in that country, adjusted
for any artificial price depression.
The upstream subsidy provision is limited to subsidies bestowed
in the same country producing the final merchandise. The Commit-
tee amended section 771(a)(1) to treat foreign countries organized
into any customs union, rather than only the member states of the
European Economic Community, as one country for purposes of ap-
plying the definition of upstream subsidies.
The scope of inquiry by the administering authority is limited in
upstream subsidy cases. The inquiry need not extend more than
one stage prior to final manufacture or production, unless informa-
tion indicates that upstream subsidy practices have taken place or
are occurring at an earlier stage of manufacture or production and
have had or are having a substantial effect on the price of the final
merchandise.
Reasons for change
New section 771A(a) establishes clearer limitations on a form of
unfair trade practices which currently is subject to insufficient dis-
cipline. Although upstream subsidies are supposedly cognizable
under present law, the Committee believes such practices must be
dealt with more adequately by the statute. There are no clear stat-
utory guidelines and the Department of Commerce has refrained
from utilizing the law effectively against this increasingly popular
form of government assistance. Including a specific rule for up-
stream subsidies will provide greater guidance and will also serve
to notify foreign producers that they will not be insulated from li-
ability simply because the benefit they receive is on a product at
an earlier stage of manufacture. Where that benefit is passed
through and affects the final exported article, it should be treated
similar to normal subsidies.
The new provision seeks to establish more meaningful discipline,
yet also seeks to recognize the administrative burdens and inherent
difficulties of applying the statute to such subsidies. Accordingly,
the Department of Commerce normally would not be required to
investigate more than one stage up the chain of commerce, since
this could prove administratively burdensome. There is a limited
exception for cases where information exists to demonstrate the
significance of subsidies further up the chain of commerce.
Moreover, the Committee recognizes the informational difficul-
ties that this new provision imposes. It is the Committee's inten-
tion that certain determinations, particularly those relating to the
generally available price and whether it is artificially depressed by
subsidies or dumping, must be made on the basis of the best avail-
able information. For these reasons, the decisions of the Depart,
ment of Commerce as to these factors must be given broad latitude
when it comes to judicial review. The inherent difficulties of
making upstream subsidy findings must be recognized and accepted
by the courts.
The conditions set forth in section 771A(a)(1) are to assure that
upstream subsidy findings will only be made in cases where the
benefits of the upstream subsidy are passed through to the produc-
ers of the merchandise under investigation. In this regard, two
policy limits seemed sensible to the Committee. First, the require-
ment that the subsidy result in a lower price for the upstream
product than the generally available price is intended to exclude
situations where the upstream subsidy does not affect the price of
the upstream product relative to unsubsidized competition. Of
course, the Committee recognizes that there may be cases where
the generally available price is itself artificially depressed, and in
those cases a procedure for adjusting such price is required. The
second policy limitation is the requirement that the upstream sub-
sidy have a significant effect on the cost of manufacturing or pro-
ducing the final merchandise. The purpose of this condition is to
avoid needless investigation and verification of upstream subsidies
which, although passed through to the final merchandise, are insig-
nificant in affecting the competitiveness of that final product. Fur-
ther, the duty would offset only the actual advantage to the pro-
ducer of the final merchandise in using subsidized rather than gen-
erally available supplies.
The upstream subsidy provision, as amended by the Committee,
treats any customs union as a single country for purposes of the
provision's intra-country limitation. This exception for customs
unions is justified because of the free movement of goods internally
within such entities and the consequent likelihood that upstream
subsidies granted by one member country will benefit production in
another member country.
DOWNSTREAM DUMPING

Present law
No provision.
Explanation of provision
Section 105(b) of H.R. 4784 establishes a new section 771A(b) de-
fining downstream dumping as occurring when a product that is
subject to a countervailing duty or antidumping investigation in-
cludes materials or components which were themselves dumped
(i.e., sold below their foreign market value), if the purchase price is
lower than their generally available price (adjusted to offset artifi-
cial depression due to any subsidies or dumping) in the country
where the final product is manufactured, and if the resulting price
difference has a significant effect on the cost of manufacturing or
producing the merchandise under investigation. The provision ap-
plies only to prior inter-country sales below foreign market value;
it does not apply to sales within the same country which are below
cost or at discount prices.
If the administering authority decides during the course of either
an antidumping or countervailing duty investigation that down-
stream dumping is occurring or has occurred, then it must include
an amount attributable to that downstream dumping as part of its
calculation of any countervailing or antidumping duty on the final
product. Section 771(A)(b)(2) as introduced erroneously calculated
downstream dumping as an amount equal to the difference be-
tween the foreign market value and the generally available price
(or the adjusted price where the generally available price is artifi-
cially depressed) of the input in the country where the final prod-
uct is being produced. That amount is not a true measure of the
actual dumping margin on the input and exceeds the cost advan-
tage of using supplies that are dumped. As amended by the Com-
mittee, the downstream dumping margin would be calculated as
the difference between the purchase price of the input and its gen-
erally available price adjusted, if appropriate, for artificial depres-
sion in the country producing the final product subject to an anti-
dumping or countervailing duty investigation. In other words, the
downstream dumping margin as in the case of upstream subsidies,
would be the cost advantage or amount of benefit passed through
to the manufacturer of the final product as a result of using sup-
plies sold at below their fair market value rather than at the gen-
erally available price.
As with upstream subsidies, the administering authority is not
required to inquire regarding the presence of downstream dumping
more than one stage prior to final manufacture, unless reasonably
available information indicates dumping at a prior stage that is
having or has had a substantial price effect.
Reasons for change
Present law does not address the problem of downstream dump-
ing. Yet this practice is becoming a significant irritant to U.S. busi-
ness. It is becoming a more frequent occurrence throughout the
world for producers in one country to receive dumped components,
incorporate them into a finished product as a way of reducing
costs, and then pass on the ill effects of such dumping to a third-
country market. Without some effort to control this phenomenon,
U.S. manufacturers will find themselves continuously disadvan-
taged by the price competition resulting from such practices. Down-
stream dumping is just as pernicious as normal dumping, and
should not be exempted from discipline.
New section 771A(b) contains limitations on the applicability of
the downstream dumping test similar to those imposed for up.
stream subsidies, with the same purpose-to permit additional
duties only where the earlier dumping actually benefits the final
product. Thus, the two conditions described with respect to up-
stream subsidies-relating to whether the product is sold below the
generally available price and to the requirement that the prior act
have a significant effect on the product's final costs-are also re-
quired in downstream dumping cases. The same procedure also ap-
plies for determining whether or not to adjust the generally avail.
able price to account for any artificial price depression caused by
dumping or subsidization. This is necessary to ensure the use of a
generally available price that is based on fair competition. The
Committee finds that all of these conditions are necessary in order
to have a rational downstream dumping standard, one which pro-
hibits truly unfair imports but recognizes a need to avoid imposing
duties if the benefits of previous dumping have not been passed
through to the U.S. market.
The downstream dumping test poses similar informational diffi-
culties to the upstream subsidy provision. As mentioned earlier
with respect to upstream subsidies, the Committee recognizes that
serious administrative difficulties will be encountered. In particu-
lar, it will be difficult to secure cooperation from the country that
is dumping the prior-stage product in order to determine foreign
market value, since producers in that country have no reason to
cooperate with U.S. authorities. Also, determinations as to the gen-
erally available price in the country of export to the United States,
as well as the level of artificial price depression, will be difficult to
establish with much precision. For these reasons, the Department
of Commerce must have broad discretion to use the best available
information and its calculations should be given great latitude by
the courts.
CUMULATION
Present law
Under section 771(7)(B) the ITC, in making its determination of
material injury, is required to assess both the volume of imports of
the merchandise subject to investigation and the consequent effects
of such imports. In applying this concept, the Commission frequent-
ly practices the principle of "cumulation"-adding together im-
ports of the same merchandise from more than one country under
investigation when the facts and circumstances are deemed to war-
rant it. The decision to cumulate is made on a case-by-case basis
and is solely within the discretion of each individual Commissioner.
This practice has neither been ratified nor prohibited by statute.
Explanation of provision
Section 105(a)(2) of H.R. 4784 establishes guidelines to govern the
Commission's use of cumulation in injury investigations. The provi-
sion amends the injury criteria contained in section 771(7) by
adding a new subparagrph (C) to require the Commission under
certain circumstances to assess cumulatively the volume and effect
of imports of like products from two or more countries subject to
investigation. H.R. 4784 as introduced mandated cumulation if (1)
marketing of the goods in question into the United States is rea-
sonably coincident, and (2) there is a reasonable indication that the
imports in question will have a contributing effect in causing, or
threatening to cause, material injury to the domestic industry.
The Committee amended section 105(a)(2) to substitute criteria
requiring cumulation if imports from two or more countries of like
products subject to investigation compete with each other and with
like products of the domestic industry in the U.S. market.
Reasons for change
The purpose of mandating cumulation under appropriate circum-
stances is to eliminate inconsistencies in Commission practice and
to ensure that the injury test adequately addresses simultaneous
unfair imports from different countries. Most Commissioners have
applied cumulation under certain circumstances but have articulat-
ed a variety of differing criteria and conditions. However, cumula-
tion is not required by statute. In addition, a few Commissioners
have imposed conditions which do not seem justified to the Com-
mittee.
The Committee believes that the practice of cumulation is based
on the sound principle of preventing material injury which comes
about by virtue of several simultaneous unfair acts or practices.
The Committee amended the criteria to permit cumulation of im-
ports from various countries that each account individually for a
very small percentage of total market penetration, but when com-
bined may cause material injury. The requirement in the bill as in-
troduced that imports from each country have a "contributing
effect" in causing material injury would have precluded cumula-
tion in cases where the impact of imports from each source treated
individually is minimal but the combined impact is injurious. The
Committee does intend, however, that the marketing of imports
that are cumulated be reasonably coincident. Of course, imports of
like products from countries not subject to investigation would not
be included in the cumulation.
THREAT OF MATERIAL INJURY TEST

Present law
Sections 705 and 735 of present law require, as a precondition to
imposing countervailing or antidumping duties, that the ITC deter-
mine whether an industry in the United States is materially in-
jured, or threatened with material injury, or the establishment of
an industry in the United States is materially retarded by reason
of imports of merchandise regarding which the administering au-
thority has made an affirmative subsidy or dumping finding. The
injury test does not apply in countervailing duty cases to dutiable
imports from countries which are not parties to the GATT Agree-
ment on Subsidies and Countervailing Measures or which have not
assumed substantially equivalent obligations with the United
States. The injury test also does not apply to duty-free imports
from such countries if they are not members of the GATT or the
test is not otherwise required under U.S. international obligations.
"Material injury" is defined in section 771(7) as "harm which is
not inconsequential, immaterial, or unimportant." In making
injury determinations the ITC must consider, among other factors
on a case-by-case basis, (1) the volume of imports of the merchan.
dise, (2) the effect of such imports on prices in the United States
for like products, and (3) the impact of such imports on domestic
producers of like products.
In determining whether there is a threat of material injury in
countervailing duty investigations, the ITC must consider such in.
formation as may be presented by the administering authority on
the nature of the subsidy (particularly whether it is an export sub-
sidy inconsistent with the GATT Agreement) and the effects likely
to be caused by the subsidy. Legislative history states that export
subsidies are inherently more likely to threaten injury that other
subsidies. There are no other factors specified in present law for de-
termining the threat of material injury.
Explanation of provision
Section 105(a)(2)(B) and (C) of H.R. 4784 amends section 771(7) to
list various criteria which the ITC must consider, among other rele-
vant economic factors, in making its determinations of whether
there is a "threat of material injury" to a domestic industry by
reason of subsidized or dumped imports. In addition investigations
as under present law, the Commission must consider whether there
is a possibility that the merchandise (whether or not actually being
imported at the time) will be the cause of actual injury based on
any demonstrable adverse trend.
Fectors for consideration would include (1) an increase in produc-
tion capacity in the exporting country likely to result in a signifi-
cant increase in exports of the merchandise to the United States;
(2) a rapid increase in U.S. market penetration and the likelihood
such penetration will increase to an injurious level; (3) the likeli-
hood that imports will enter at prices that will have a depressing
or suppressing effect on domestic prices; or (4) a substantial in-
crease in inventories in the United States. Determinations cannot
be made on the basis of mere supposition or conjecture. There must
also be sufficient information existing to conclude that the threat
of injury is real and that actual injury is imminent.
In determining whether there is a threat of material injury in
cases involving export targeting subsidies, the Commission must
consider the effect of the subsidy practices on the export competi-
tiveness of the beneficiary and the extent to which such practices
are likely to have a demonstrable adverse effect on the industry
with regard to costs and availability of capital, outlays for research
and development, and future investment. These constitute addition-
al factors which the ITC must consider in determining whether the
actual standards of threat of material injury are met.
Reasons for change
Present law does not contain any statutory guidance as to the
factors, other than the nature of any subsidy, which the ITC should
consider in determining whether an industry in the United States
is threatened with material injury by reason of imports of mer-
chandise subject to a countervailing duty or antidumping investiga-
tion. The absence of such criteria has created uncertainty and con-
fusion within the Commission and court challenges on what stand-
ards should apply; partly for this reason there have been relatively
few cases decided by the Commission on the basis of threatened as
opposed to actual material injury.
The Commission should examine all elevant factors relating to
possible threat of material injury in all investigations in which it
finds no present injury. The factors set forth in section 771(7) as
amended by the bill are consistent with, and restate legislative his-
tory on, this term in present law as it was amended by the Trade
Agreements Act of 1979. The factors listed are illustrative of the
economic indicators which may be relevant, depending on the cir-
cumstances of the particular case and industry involved. As stipu-
lated in the legislative history of the 1979 Act, determinations on
the basis of threat cannot be made on the basis of mere supposition
and conjecture and sufficient information must exist for concluding
that the threat of injury is real and that actual injury is imminent.
The purpose of including such guidance in the statute is not to
broaden or otherwise change the scope of meaning of present law
or to make determinations of material injury based on threat
either easier or more difficult to obtain. Rather, by restating previ-
ous legislative history in the statute, the Committee seeks to clari-
fy and remove any misunderstanding as to Congressional intent on
the standards for determining whether the current test is met.
In cases involving export targeting subsidies the Commission
would be required to consider special additional factors in deter-
mining whether material injury is threatened. These factors are
based upon information received by the Committee on actual pri-
vate sector experience. The likelihood of unfair competition and
actual injury in the future due to foreign targeting may impede the
ability of the U.S. industry in the present, even before imports
occur, to raise capital, to invest in plant and equipment, and to
engage in research and development. However, the actual stand-
ards for determining threat of material injury would be the same
as in cases not involving export targeting practices.
Loss of sales by the U.S. industry in third countries or loss of its
global market share are not included as special factors for consider-
ation in determining whether that industry faces the threat of ma-
terial injury from foreign targeting. These factors are only relevant
to the extent that they indicate a likelihood of imports in the U.S.
market. The Committee believes that the effects of targeting in
third country markets are more appropriately dealt with under
other trade statutes than in laws concerned specifically with the
impact of unfair competition in the U.S. market.
INTERESTED PARTY

Present law
Section 771(9) defines the term "interested party" for standing to
file petitions under the countervailing duty and antidumping laws
as (1) a foreign manufacturer, producer, or exporter, or U.S. im-
porter, or a trade or business association, a majority of whose mem-
bers are importers of the merchandise; (2) the foreign government
of a country producing or manufacturing the merchandise under
investigation; (3) a manufacturer, producer, or wholesaler of a like
product; (4) a union or group of workers representative of an indus
try engaged in manufacture, production, or wholesale of a like
product; and (5) a trade or business association, a majority of whose
members manufacture, produce, or wholesale a like product in the
United States.
Explanation of provision
Section 105(a)(3) of H.R. 4784 amends section 771(9) by expanding
the definition of "interested party" for standing in countervailing
duty and antidumping investigations to include an association, a
majority of whose members is composed of (1) manufacturers, pro-
ducers, or wholesalers in the United States of a like product; (2)
unions or groups of workers representative of an industry manufac-
turing, producing, or wholesaling a like product in the United
States; or (3) trade or business associations a majority of whose
members manufacture, produce or wholesale a like product in the
United States.
Reasons for change
The purpose of the amendment is to broaden the class of an in-
terested party which has standing to file petitions under the coun-
tervailing duty or antidumping laws. It would enable a coalition to
file a petition on behalf of a particular industry as long as a major-
ity of the coalition's membership consists of manufacturers, produc-
ers, wholesalers, groups of workers, or trade associations with
standing under present law and representative of the particular in-
dustry producing the like product. This standing requirement
would be met as long as a majority of the combined membership of
the coalition individually meets the standing requirements under
present law and represents the industry producing the like prod-
uct. It is not necessary that a majority of the individual firms and
a majority of the unions also represent the particular industry if a
majority of the members of an association in the coalition are rep-
resentative.
SECTION 105 (OF H.R. 4784 AS INTRODUCED).-NONMARKET ECONOMY
PRICING
Under section 773(c) of present law, if an exporting country is
State-controlled to an extent that sales of the merchandise in that
country or to third countries do not permit a determination of for-
eign market value in antidumping investigations, the administer-
ing authority must determine the foreign market value on the
basis of normal costs, expenses, and profits as reflected by either (1)
prices at which such or similar merchandise of a non-State-con-
trolled-economy country is sold for consumption in the home
market of that country or to other countries, including the United
States; or (2) the constructed value in a non-State-controlled-econo-
my country.
Section 105 of H.R. 4784 as introduced amended section 773(c) to
provide a new alternative pricing standard for determining dump-
ing margins in cases in which available information indicated to
the administering authority that the relevant sector of the econo-
my from which the merchandise is exported is State-controlled to
the extent that foreign market value cannot be determined under
the normal rules of section 773(a). In such cases the administering
authority could determine foreign market value on the basis of the
"lowest free market price" (as defined in section 773(c) as amended)
of like articles in the U.S. market if that price were a competitive
free market price, as an alternative to the so-called "surrogate
country" test under present law.
There appears to be general consensus within the private sector,
the relevant Executive branch agencies, and the Committee that
the surrogate country test is unsatisfactory. The biggest problem it
creates is unpredictability and lack of advance knowledge for non-
market suppliers or U.S. importers and for the domestic industry
as to which country will be selected as a surrogate for establishing
foreign market value. Consequently, importers do not know what
might constitute a dumped price in order to gauge their prices ac-
cordingly. Potential petitioners do not know whether it is worth-
while to file a dumping complaint since, unlike cases involving
market economies, they do not have advance knowledge of the
home market price of their competitors and the likelihood of a
dumping finding.
The purpose of including in H.R. 4784 as introduced the lowest
free market price of the article in the U.S. market as an alterna-
tive test was to provide greater certainty and less complexity for
importers and potential petitioners in determining what bench-
mark price would apply in antidumping cases involving nonmarket
economies. The Department of Commerce could distinguish individ-
ual sectors of an economy traditionally treated in entirety as either
market or State-controlled for purposes of applying the dumping
rules. Section 105 also required the Department of Commerce to ex-
amine all available evidence supplied by the foreign government or
its suppliers in making its determination as to whether the particu-
lar sector or country is State-controlled.
However, the Committee decided in markup session to delete sec-
tion 105 from H.R. 4784 as introduced. There was not consensus in
the Committee that the lowest price, as opposed to an average
price, for example, would be the most appropriate benchmark that
would produce equitable results for both domestic industries and
foreign suppliers. Some Members were concerned that a lowest free
market price test might be set by very low wage, high volume sup-
pliers and nonmarket economy countries could reduce their prices
to that level bearing no relation to their actual costs of production
in order to earn hard currency and still escape dumping duties.
Other Members were concerned that a higher threshold, such as an
average free market price, would penalize efficient foreign produc-
ers and provide absolute protection and an incentive to raise prices
to domestic producers selling below the average by unjustifiably de-
fining foreign sales below that level as automatic dumping. The
Committee decided to delete the authority to distinguish economies
on a sector than country-wide basis so as not to broaden the poten-
tial application of the unsatisfactory surrogate country test.

H. Rept. 98-725 0 - 84 6
 SECTION 106.-HEARINGS

Present law
Section 774(a) requires the administering authority and the ITC
each to hold a hearing before making their final determinations in
countervailing duty or antidumping investigations, upon the re-
quest of any party to the investigation.
Explanation of provision
The Committee amended H.R. 4784 as introduced to add a new
section 106 which amends section 774(a) to create an exemption in
the existing requirement for hearings by the ITC upon request
before making an injury determination in any countervailing duty
or antidumping investigation. If investigations are initiated under
both laws within six months of each other but before a final injury
determination in either case regarding the same merchandise from
the same country, a hearing by the Commission during one investi-
gation would be treated as compliance with the normal hearing re-
quirement for both investigations. The Commission could require a
hearing during each investigation in extraordinary circumstances.
Such circumstances could result from a major change in the
number or composition of exporters or domestic producers, for ex-
ample. The Commission would also allow any party to submit addi-
tional written comment it considers relevant during investigation
on which the hearing requirement has been waived.
Reasons for change
The purpose of this amendment is to reduce the unnecessary ad-
ministrative burden and expense for the ITC and petitioners and
other interested parties of duplicate hearings in investigations in-
volving essentially the same factual circumstances. Opportunity
would be provided through written comments to update and sup-
plement information gathered in the first investigation as neces-
sary to maintain current information for the injury determination
in the second case.
SECTION 107.-VERIFICATION OF INFORMATION

Present law
The administering authority is required by section 776(a) to
verify all information relied upon in making a final determination
in any countervailing duty or antidumping investigation. In pub-
lishing the determination, the administering authority reports the
procedures and methods used in verification. If verification is not
possible, the administering authority uses the best information
available to it for making the determination.
Verification is not required by statute in annual review proceed-
ings under section 751. However, the administering authority nor-
mally verifies information where it believes there is a significant
issue of law or fact.
Explanation of provision
Section 107 of H.R. 4784 amends section 776(a) to require verifi-
cation of information whenever the administering authority re-
yokes a countervailing duty or antidumping duty order under sec-
tion 751(c) in addition to present verification of any final determi-
nations. The Committee amended section 107 to add a specific stat-
utory requirement that the administering authority also verify in-
formation used in annual reviews and determinations under sec-
tion 751(a) of outstanding countervailing duty and antidumping
orders if verification is timely requested by an interested party.
Such verification would not be required if it has occurred upon
timely request in the two immediately previous annual reviews
under section 751 involving the same order, finding, or notice
unless good cause for verification is shown. As under present law,
the administering authority will use the best information available
to it as the basis for its action if it is unable to verify the accuracy
of the information submitted. Good cause could be such factors as a
significant issue of law or fact, changed or special circumstances,
discrepancies found in previous verifications, or the likelihood of a
significant impact on the result.
Reasons for change
The consequences of a revocation action are that the outstanding
countervailing duty or antidumping duty order no longer exists. In
such circumstances, the Committee believes it essential to protect
the interests of the domestic industry by requiring that any infor-
mation relied on in making such a determination be fully verified,
so that duty protection will not be eliminated on the basis of erro-
neous information.
The Committee also believes it essential to proper enforcement of
the laws that information used in determining annually the actual
amount of any countervailing or antidumping duty to be assessed
under outstanding orders is accurate to the extent possible. At the
same time, the Committee is concerned that requiring verification
in every review would result in an unnecessary additional adminis-
trative burden on the Department of Commerce or perfunctory ver-
ifications. Therefore, verification would not be required if an inter-
ested party does not request it in a timely manner, or after recent
verifications have taken place unless shown to be warranted.
SECTION 108.-RELEASE OF CONFIDENTIAL INFORMATION

Present law
Under section 777, the administering authority and the ITC must
maintain a record of ex parte meetings between (1) interested par-
ties or other persons providing factual information, and (2) the
person charged with making the determination and any person
charged with making a final recommendation to that person. This
record is included in the record of the investigation.
These agencies may disclose, in a form which cannot be used to
identify operations of a particular person, any confidential infor-
mation received during a proceeding and any information not des-
ignated as confidential by the person submitting it.
Information submitted to the administering authority or the ITC
designated as confidential cannot be disclosed to any person (other
than those directly concerned with carrying out the investigation)
without the consent of the person submitting it unless pursuant to
a protective order. If the administering authority or the ITC deter-
mines that designation of information as confidential is unwarrant
ed, they must notify the person submitting the information and re-
quest an explanation of the reasons. Unless the person is persua-
sive or withdraws the designation, the information will be re-
turned.
Both agencies are permitted to make confidential information
available under a protective order upon receipt of an application
which describes the information requested and reasons for the re-
quest. If the administering authority denies any request, or the ITC
denies a request for confidential information in support of the peti-
tioner concerning the domestic price or cost of production of the
like product, application may be made to the Court of International
Trade for an order directing that the information be made avail-
able. The Court may issue such an order subject to appropriate
sanctions. Legislative history states the expectation that disclosure
generally will be made only to attorneys who are subject to disbar.
ment from practice before the agency.
Explanation of provision
Section 108 of H.R. 4784 amends section 777 in several respects.
First, it amends subsection (b) to permit release of confidential in-
formation to an officer or employee of the U.S. Customs Service
who is directly involved in conducting an investigation regarding
fraud under Title VII. Second, subsection (b) is also amended to
provide a more orderly procedure for requesting confidential treat-
ment and obtaining release of information that is granted such
treatment. Finally, subsection (c)(1)(B) is amended to preclude any
distinction between corporate and retained counsel in the regula-
tions of the ITC and the administering authority governing issu-
ance of protective orders.
With respect to the new procedure for releasing confidential in-
formation, the administering authority and the Commission must
require that information for which confidential treatment is re-
quested be accompanied by a nonconfidential summary (or an ex-
planation of why such a summary is not possible) and by a state-
ment either permitting or opposing release of such information
under administrative protective order.
Reasons for change
Allowing the release of confidential information for a Customs
Service fraud investigation is intended solely to prevent an unin-
tended restriction from continuing. The reason for this change is to
improve administration of the customs laws by increasing the like-
lihood that parties allegedly engaging in civil fraud will be scruti-
nized.
Permitting the standardized release of confidential information
is intended to reduce administrative burdens and to expedite deci-
sionmaking regarding access to confidential information. Under
present law there is no standard procedure for affecting release,
and decisions are normally made on an ad hoc basis. While the
Committee realizes that each request for confidential treatment
must be examined on its own merits, a standardized procedure will
help to simplify and bring more order to the system, reduce time-
consuming and costly filings by parties, and encourage more timely
decisions regarding release of information.
The Committee agreed to preclude any distinction between corpo-
rate and retained counsel in agency regulations because it believes
that no basis exists in law or policy for treating these two classes of
individuals separately. Agency regulations have drawn such a dis-
tinction because of fears that release of information to in-house
counsel would create too great a risk of release of such information
to other operating elements of the corporation. This distinction was
supported by language in the legislative history to the 1979 amend-
ments. However, the Committee now believes that appropriate safe-
guards exist to protect against release within the corporation by in-
house counsel. First, the release of information under protective
order is permissive and the agencies may weigh the risk of release
in a particular case. Second, corporate attorneys are subject to dis-
ciplinary proceedings and possible disbarment for release of infor-
mation which is subject to protective order. Thus, the Committee
sees no need to create an outright ban on disclosure to in-house
counsel. The agencies will be expected, however, to enforce effec-
tive sanctions against unauthorized release and to prevent release
if a risk of disclosure is demonstrated.
SECTION 109.-SAMPLING AND AVERAGE IN DETERMINING U.S. PRICE
AND FOREIGN MARKET VALUE

Present law
For purposes of determining foreign market value only in anti-
dumping investigations, section 773(1) authorizes the administering
authority to use averaging or sampling techniques whenever a sig-
nificant volue of sales is involved or a significant number of price
adjustments is required, and to decline to take into account adjust-
ments which are insignificant in relation to the price or value of
the merchandise. Legislative history states that "insignificant"
means individual adjustments having an ad valorem effect of less
than 0.33 percent and groups of adjustments having a cumulative
ad valorem effect of less than 1.0 percent. Adjustments also should
not be disregarded if they have, individually or cumulatively, a
meaningful effect on competition even though they have a small ad
valorem effect.
Explanation of provision
Section 109 of H.R. 4784 adds a new section 777A to expand the
instances in which the administering authority may use sampling
and averaging techniques. Section 777A authorizes the administer-
ing authority, in determining United States price or foreign
market value in antidumping investigations under section 772 and
773 or in carrying out annual reviews of outstanding antidumping
or countervailing orders under section 751, to use averaging or gen-
erally recognized sampling techniques whenever a significant
volume o sales is involved or a significant number of adjustments
to price is required, and to decline to take into account adjustments
which are insignificant in relation to the price or value of the mer-
chandise.
 The authority to select appropriate samples and averages would
rest exclusively with the administering authority, but are to be
representative of the transactions under investigation.
Reasons for change
The purpose of section 109 is to reduce the costs and administra.
tive burden on the Department of Commerce of determining dump-
ing margins and of reviewing annually the amount of countervail.
ing and antidumping duties to be assessed under outstanding
orders. Under present law the Department of Commerce must as-
certain the U.S. price of each individual transaction in an anti.
dumping investigation and review countervailing duty and dump-
ing margins annually on an entry-by-entry basis for each product
and country subject to an order. By permitting the Department to
use generally recognized averaging and sampling techniques and to
disregard insignificant adjustments in all duty assessments, as it
may currently for determining foreign market value, the Commit-
tee seeks to maximize efficient use of limited staff resources and to
expedite processing of individual cases and annual reviews without
loss of reasonable fairness in the results.
SECTION 110.-ELIMINATION OF INTERLOCUTORY APPEALS

Present law
Title V of the Tariff Act of 1930, as amended by Title X of the
Trade Agreements Act of 1979, provides for judicial review of coun-
tervailing duty and antidumping duty proceedings in the Court of
International Trade (CIT). Under section 516A, certain determina-
tions by the administering authority are reviewable by the CIT
prior to the issuance of a final determination or the publication of
a final order. In other words, certain interlocutory determinations
are reviewable immediately even though the administrative pro-
ceeding has not been concluded.
Those interlocutory findings which may be reviewed immediately
under section 516A(a)(1) include a negative preliminary determina-
tion by the administering authority under sections 703(a) or 733(a)
and a determination that a case is "extraordinarily complicated"
under sections 703(c) or 733(c). Also reviewable on an interlocutory
basis under section 516A(a)(1) and (a)(2)(B) are any annual review
determinations under section 751.
Explanation of provision
Section 110 of H.R. 4784 amends section 516A(aXl) to prohibit in-
terlocutory review of "extraordinarily complicated" determinations
under sections 703(c) or 733(c) or negative preliminary determina-
tions under sections 703(b) or 733(b). Instead, these findings would
be fully reviewable when review is sought of a final affirmative or
negative determination under section 516A(a)(2) and would be sub-
ject to reversal and possible remand by the CIT along with other
interlocutory determinations made prior to a final determination.
Section 110 also amends section 516A(a)(2) to prohibit interlocuto-
ry appeals of determinations made during an annual review pro-
ceeding under section 751. Such appeals would instead occur after
a final determination has been made by the administering author-
ity or the ITC.
Finally, section 110 amends section 516A to clarify the treatment
of certain types of final determinations and to clarify when judicial
review of these determinations should occur. In particular, section
110 amends section 516A(a)(2)(B) to ensure that any part of a final
affirmative determination by the administering authority which
specifically excludes any company or product may, at the option of
the appellant, be treated as a final negative determination and
may be subject to appeal within 30 days of publication of the final
determination by the administering authority. However, other neg-
ative aspects of an affirmative determination would be appealable
within 30 days after publication of a final order, and if an appel-
lant so chooses, appeal of those portions of an affirmative finding
which exclude a product or a company may also be appealed within
30 days of publication of a final order, instead of within 30 days of
the determination as described above. A new paragraph (3) is also
added to clarify that a final affirmative determination by the ad-
ministering authority may be contested when an appeal is based on
a negative determination by the Commission that is predicated on
the size of the dumping margin or net subsidy.
Reasons for change
The purpose of eliminating interlocutory judicial review is to
eliminate costly and time-consuming legal action where the issue
can be resolved just as equitably at the conclusion of the adminis-
trative proceedings. Since no irrevocable harm occurs to any party
until after the agencies have completed their investigations and
have either issued or failed to issue a final antidumping or counter-
vailing duty order, the interests of all parties can be protected by
preserving their rights to appeal at that time. The Committee re-
ceived numerous objections from practitioners and representatives
of both domestic and importing interests who find the many inter-
locutory appeals to be costly and unnecessary. When Congress ex-
panded judicial review as part of the Trade Agreements Act of
1979, it was felt that interlocutory review would expedite provision
of judicial relief, might help to perfect the record, and would lead
to better final determinations with fewer errors. However, the cost
delay of judicial review in the CIT are such that the benefits of in-
terlocutory actions are outweighed by the attendant burdens.
The purpose of clarifying when negative portions of an affirma-
tive determination may be reviewed is to permit appeals of deter-
minations which exclude entire companies or products on the time-
table most acceptable to the appealing party. The Committee is
aware of the decision of the CIT in Bethlehem Steel Corp. v. United
States (Slip Opinion 83-97), in which the court refused to permit an
appeal of certain negative findings (with respect to certain products
or companies) that were part of an overall affirmative determina-
tion in accordance with the timetable for appeal of affirmative de-
terminations. The court recognized that its ruling might lead to
"undesirable piecemeal" litigation, but said that the correction
must be made by "legislative fiat." The purpose of the Committee's
change is to permit an election by appellants of when to appeal
such determinations and thereby to prevent piecemeal litigation.
SECTION 201.-ESTABLISHMENT OF TRADE REMEDY ASSISTANCE OFFICE
AND TARGETING SUBSIDY MONITORING PROGRAM IN THE UNITED
STATES INTERNATIONAL TRADE COMMISSION

Section 201 amends part 2 of title II of the Tariff Act of 1930 by

adding new section 339 and amending section 340 to establish a
Trade Remedy Assistance Office and a Targeting Subsidy Monitor.
ing Program in the ITC.
TRADE REMEDY ASSISTANCE OFFICE

Present law
No provisions.
Explanation ofprovision
New section 339 of the Tariff Act of 1930 as added by section 201
of H.R. 4784 establishes in the ITC a Trade Remedy Assistance
Office. This Office would be a centralized location within the gov-
ernment to provide full information to the public, upon request,
concerning the remedies and benefits available under the trade
laws and the procedures and dates for filing petitions and applica-
tions under such laws. This assistance would apply to petitions for
relief under various provisions of the Trade Act of 1974, the Trade
Expansion Act of 1962, and the Tariff Act of 1930. It would there-
fore cover petitions pertaining to all normal forms of trade reme-
dies, such as import relief (section 201 of the Trade Act of 1974),
relief from foreign import restrictions and export subsidies (section
301 of the Trade Act of 1974), relief under the antidumping and
countervailing duty laws (Title VII of the Tariff Act of 1930, as
amended by the Trade Agreements Act of 1979), and relief from
unfair practices in import trade (section 337 of the Tariff Act of
1930).
New section 339 also imposes a requirement on each agency re-
sponsible for administering these laws to provide technical assist-
ance to eligible small businesses to enable them to prepare and file
petitions and applications under such statutes (other than those
which, in the opinion of the agency, are frivolous). The term "eligi-
ble small business" is defined as any business concern which, in
the agency's judgment, has, by virtue of its small size, neither ade-
quate internal resources nor financial ability to obtain qualified
outside assistance in preparing and filing petitions and applications
for trade law remedies and benefits. In making this determination,
the agency may consult with the Small Business Administration
and must consult with other agencies that have provided such as-
sistance. Agency decisions on whether a business concern is eligible
for assistance are not reviewable by any court or other agency.
REASONS FOR CHANGE

The establishment of a Trade Remedy Assistance Office is essen-

tial in order to reduce the costs of filing trade remedy petitions and
to minimize uncertainties about the types of remedies that should
be pursued in particular situations. Although many large firms and
industries are quite familiar with the complex maze of laws and
procedures available to them, a number of smaller companies have
been frustrated by these complexities.
The Committee is aware of several instances where small busi-
ness groups were frustrated by their lack of resources and unfamil-
iarity with the various petitioning procedures. This problem is
most acute in sectors with a large number of small firms, such as
certain types of agriculture. The Trade Remedy Assistance Office
will be able to provide basic advice as to the appropriate laws for
these groups to pursue-advice as to which agencies administer
which laws and what the filing requirements and other procedural
steps are for seeking relief. The Committee believes that a single
office to disseminate information about U.S. trade laws and provide
basic advice about the types of action to pursue would represent a
meaningful improvement over the present situation.
The statutory requirement that each agency responsible for ad-
ministering a particular law provide further assistance to deserv-
ing small business entities is also a significant improvement over
present law. Although some agencies do provide help to small busi-
ness petitioners, there are inconsistencies in practice and there are
no formal procedures. The Committee intends a mechanism where-
by the agency decides, upon request, that a paticular entity lacks
the internal resources and financial ability to obtain qualified out-
side assistance (retained counsel). Thereafter, if the agency finds
that the request for relief is not frivolous, it would assist in the
preparation and filing of the necessary petitions. This assistance
would include the legal and economic information support (includ-
ing any non-confidential data available to the agency) necessary to
file, but would not include advocacy services. Since the agency
must remain in the role of investigator and fact-finder, it would
not be appropriate for it to take a partisan role in the dispute.
TARGETING SUBSIDY MONITORING PROGRAM

Present law
No provisions.
Explanation of provision
Section 340 of the Tariff Act of 1930 as amended by section 201
of H.R. 4784 requires the ITC to establish and implement a con-
tinuing program to monitor and analyze the industrial plans and
policies of foreign countries in order to discover whether targeting
subsidies are being planned or have been implemented. Targeting
subsidies would be those practices defined in section 771(5)(B) as
added under section 105(a)(1) of the bill. The Commission would
give priority to those countries and product sectors in which the
United States has significant economic or commercial interests. In
determining these priorities, the Commission would consult with
other Federal agencies and solicit the views and comments of the
public. The Commission must regularly report the information re-
sulting from the program to the administering authority and make
non-confidential information available to the public.
Each agency of the United States is directed to provide the ITC,
upon its request, such information as the Commission considers
necessary or appropriate to carry out its functions under this pro-
gram. Classified information must be included if the provider
agency is satisfied that the Commission will enforce appropriate
measures to prevent its loss or unauthorized disclosure.
Reasons for change
The purpose of establishing a targeting monitoring program in
the ITC is to develop information and expertise on a continuing
basis about planned or actual industrial plans and policies of for-
eign countries in order to forewarn U.S. industries and the U.S.
Government about possible export targeting subsidies. In the past,
knowledge of and response to such practices has often come about
when their adverse impact is actually experienced by a U.S. indus-
try in lost competitiveness. Development of better information
about foreign industrial policies in their incipient stages comple.
ments the explicit recognition under section 105 of the bill of
export targeting subsidies as countervailable under U.S. law. The
program would place domestic industries in a better position to an-
ticipate potential targeting problems and to seek an appropriate
remedy under the countervailing duty or other trade laws before
experiencing an actual injurious impact. The ITC would report pro-
gram information regularly to the administering authority and
make available non-classified portions to the public in order to fa-
cilitate this process.
At the present time several government agencies, in particular
the Department of Commerce, the ITC, the Office of the U.S. Trade
Representative, and the Central Intelligence Agency, are gathering
and analyzing information about foreign industrial policies and tar-
geting practices. However, section 340 as amended would consoli-
date and coordinate these activities in one agency and address the
need to correlate the information in a central place in a timely
fashion. The Committee believes the ITC is the most appropriate
agency for this function since its independent status would endure
objective, nonpartisan analysis absent of political or policy consid-
erations. The Commission also has comprehensive commodity ex-
pertise and extensive experience in examining and reporting on in-
dustry policies and programs on a thorough and factual basis. In
order to avoid duplication and to maximize the use of resources,
other agencies are directed to provide relevant information they
collect to the ITC upon its request. The Committee expects the ITC
and individual agencies involved will work out mutually satisfac-
tory security measures that will enable the Commission to obtain
on a regular basis whatever classified information is necessary or
appropriate for a comprehensive and consolidated program.
While the Committee intends that the program monitor and ex-
amine targeting practices world-wide, it recognizes that staffing
and other budgetary considerations require establishment of prior-
ities for analysis in order to avoid excessive additional costs. The
ITC would consult other agencies and private sector interests to de-
termine the industries and countries of greatest U.S. economic and
commercial interest for this purpose. However, the Committee does
not intend that the program be used to obtain and develop evi-
dence at the behest of individual domestic industries which lack
adequate information but believe a targeting problem exists.
Rather, the ITC should conduct as comprehensive a monitoring
 51
program as possible and establish it own priorities based on avail-
able resources and extensive consultations. The Committee will
review the operation and resource requirements for this program
as part of its annual budget oversight and authorization responsi-
bilities for the Commission.
SECTION 202.-ADJUSTMENTS STUDY

Present law
The amount of dumping duties imposed on imported merchan-
dise is equal to the difference, if any, between the foreign market
value and the United States price. 'United States price" includes
the terms "purchase price" and "exporter's sales price." Purchase
price is the price at which merchandise is purchased or agreed to
be purchased prior to date of importation from the manufacturer
or producer for exportation to the United States. It may be used if
transactions between related parties indicate the merchandise has
been sold prior to importation to a U.S. buyer unrelated to the pro-
ducer. "Exporter's sales price" is the price at which merchandise is
sold or agreed to be sold in the United States before or after impor-
tation, by or for the account of the exporter.
"Foreign market value" describes the value against which the
U.S. price is compared in assessing dumping duties. It includes the
terms home market price, third country price, and constructed
value. Either third country price or constructed value are use if the
exporter's home market prices are inadequate or unavailable to
calculate fair market value, third country prices normally being
preferred if presented in a timely manner and adequate to estab-
lish foreign market value.
Various statutory adjustments are provided for to obtain compa-
rability of prices, for example, to account for differences in circum-
stances of sale, quantities sold, or qualitative characteristics.
Explanation of provision
Section 202 of H.R. 4784 requires the Secretary of Commerce to
undertake a study of current practices that are applied in making
adjustments to purchase prices, exporter's sales prices, foreign
market value, and constructed value in determining dumping
duties under section 772(d) and (e) and section 773. The study
would include, but not be limited to, (1) a review of current adjust-
ment, (2) a review of private sector comments and recommenda-
tions regarding adjustments that were made at Congressional hear-
ings during the 98th Congress, and (3) the manner and extent to
which such adjustments lead to inequitable results. The Secretary
must complete the study within one year after the date of enact-
ment of the bill and submit a written report to the Congress. The
report would contain whatever recommendations the Secretary
deems appropriate on the need and means for simplifying and
modifying current adjustment practices.
Reasons for change
The Subcommittee on Trade received many suggestions from the
private sector during its hearings on trade remedy law reform for
changes in the various adjustments which the Department of Coin-
merce may make under present law to the wholesale prices of
transactions being compared for purposes of determining dumping
margins. Many of these adjustments were discussed extensively
during consideration of amendments to the antidumping law in
1979, but remain controversial. The adjustment process is also ex-
tremely complex, having developed over the the years through ac-
cretion rather than logical and comprehensive analysis.
The overall basic goal of adjustments should be a fair and objec-
tive basis for achieving price comparability which does not give
either domestic or foreign interests an advantage in the calculation
of dumping margins. There is also a need to simplify the adjust-
ment process and make it a coherent whole with a view to achiev-
ing greater predictability of results and savings in the time and ex-
pense of investigation and administration. Consequently, the Com-
mittee believes an indepth study of all present practices and their
results and a comprehensive anaylsis of the implications of the var-
ious proposls for change is necessary, rather than a piecemeal ap.
proach, before any legislative or administrative action is taken in
this area.
SECTION 203.-EFFECTIVE DATES

Section 203 sets forth the effective dates of the various provisions
and amendments in the Trade Remedies Reform Act of 1984. The
amendments made by sections 101, 103, 104, 105, and 109, concern-
ing practices and procedures involved in countervailing duty and
antidumping investigations, would apply to investigations initiated
on or after the date of enactment of the Act. The amendments
made by section 110 concerning judicial review would apply with
respect to civil actions pending on, or filed on or after, the date of
enactment of the Act. Section 339 of the Tariff Act of 1930 as added
by section 201 of the Act, concerning establishment of a trade
Remedy Assistance Office, would take effect on the 90th day after
the date of enactment. All other provisions of H.R. 4784 as reported
would take effect on the date of enactment of the Act.
VOTE OF THE COMMITTEE IN REPORTING THE BILL
In compliance with clause 2()(2)(B) of rule XI of the Rules of the
House of Representatives, the following statement is made relative
to the vote of the Committee in reporting the bill. H.R. 4784 was
ordered favorably reported by the Committee with amendments by
a nonrecorded vote.

OVERSIGHT FINDINGS
In compliance with clause 2(l)(3)(A) of rule XI of the Rules of the
House of Representatives relating to oversight findings, the Com-
mittee has concluded, as a result of extensive hearings held by the
Subcommittee on Trade and indepth review of the issues involved,
that amendments of the countervailing and antidumping duty laws
are necessary to improve their operation and to address current
forms of unfair trade practices for the reasons described above
under the Background and Purpose of the bill.
 With respect to clause 2(l)(3)(D) of rule XI of the Rules of the
House of Representatives, no oversight findings or recommenda-
tions have been submitted to the Commission by the Committee on
Government Operations with respect to the subject matter con-
tained in this bill.
BUDGETARY AUTHORITY AND COST ESTIMATES, INCLUDING ESTIMATES
OF CONGRESSIONAL BUDGET OFFICE

In compliance with clause 7(a) of rule XIII and clause 2()(3) (B) of
rule XI of the Rules of the House of Representatives, the Commit-
tee states that H.R. 4784, as amended, does not provide any new
budget authority or any new or increased tax expenditures.
In compliance with clause 7(a) of rule XIII and clause 2(1)(3) (B)
and (C) of rule XI of the Rules of the House of Representatives, the
Committee provides below information furnished by the Congres-
sional Budget Office on H.R. 4784, and required to be included
herein:
U.S. CONGRESS,
CONGRESSIONAL BUDGET OFFICE,
Washington, D.C., April 23, 1984.
Hon. DAN ROSTENKOWSKI,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, D.C.
DEAR MR. CHAIRMAN: The Congressional Budget Office has re-
viewed H.R. 4784, the Trade Remedies Reform Act of 1984, as
amended and ordered reported by the Committee on Ways and
Means.
The bill would amend countervailing duty and antidumping laws
and create a Trade Remedy Assistance Office within the Interna-
tional Trade Commission. Specifically, the bill would clarify the
law with relation to likely sales and certain leasing arrangements;
amend the authority to terminate or suspend countervailing duty
or antidumping investigations; strengthen guidelines for self-initi-
ation of antidumping investigations and require further monitoring
by the Department of Commerce of imports once a domestic indus-
try has proven injurious dumping; amend certain definitions of
terms and special rules pertaining to the scope of antidumping and
countervailing duty investigations and determinations of material
injury; allow an exemption in the existing requirement for hear-
ings by the International Trade Commission to prevent duplicate
hearings; set new standards for the verification and release of in-
formation; allow the use of sampling and averaging techniques in
investigations; preclude judicial review until final action has been
taken; establish a Trade Remedy Assistance Office within the ITC;
require the ITC to establish and implement a program to monitor
and analyze the industrial plans and policies of foreign countries;
and require a Department of Commerce study of its price adjust-
ment practices.
H.R. 4784 will have no effect on tax expenditures. While the bill
would have no direct effect on revenues (i.e., duty and tariff sched-
ules are not altered), revenue could increase by a negligible
amount as a result of the tightening of the countervailing duty and
antidumping investigation process. If the tightened process results
in more cases requiring the imposition of such duties, then reve-
nues would be higher.
With best wishes.
Sincerely, RUDOLPH G. PENNER.

INFLATIONARY IMPACT STATEMENT

With respect to clause 2()(4) of rule XI of the Rules of the House
of Representatives, the Committee states that H.R. 4784, as amend-
ed, which would have no direct effect on revenues but could in-
crease revenues somewhat as a result of tightening the antidump-
ing and countervailing duty investigation process, would not have
an inflationary impact on prices and costs in the operation of the
general economy.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3 of rule XIII of the Rules of the

House of Representatives, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be omit-
ted is enclosed in black brackets, new matter is printed in italic,
existing law in which no change is proposed is shown in roman):

TARIFF ACT OF 1930

TITLE III-SPECIAL PROVISIONS

PART 1I-UNITED STATES TARIFF COMMISSION

SEC. 339. TRADE REMEDY ASSISTANCE OFFICE.

(a) There is established in the Commission a Trade Remedy As-
sistance Office which shall provide full information to the public,
upon request, concerning-
(1) remedies and benefits available under the trade laws, and
(2) the petition and applicationprocedures, and the appropri-
ate filing dates, with respect to such remedies and benefits.
(b) Each agency responsible for administering a trade law shall
provide technical assistance to eligible small businesses to enable
them to prepare and file petitions and applications (other than
those which, in the opinion of the agency, are frivolous) to obtain
the remedies and benefits that may be availableunder the law.
(c) Forpurposes of this section-
(1) The term "eligible small business" means any business
concern which, in the agency's judgment, due to its small size,
has neither adequate internal resources nor financial ability to
obtain qualified outside assistance in preparing and filing peti-
tions and applications for remedies and benefits under trade
laws. In determining whether a business concern is an "eligible
 small business", the agency may consult with the Small Busi-
ness Administration, and shall consult with any other agency
that has provided assistance under subsection (b) to that busi-
ness concern. An agency decision regarding whether a business
concern is an eligible small business for purposes of this section
is not reviewable by any other agency or by any court.
(2) The term "trade laws" means-
(A) chapter 1 of title II of the Trade Act of 1974 (19
US.C 2251 et seq., relating to relief caused by import com-
petition);
(B) chapters 2 and 3 of such title II (relating to adjust-
ment assistancefor workers and firms);
(C) chapter 1 of title III of the Trade Act of 1974 (19
U.S.C. 2411 et seq., relating to relief from foreign import re-
strictions and export subsidies);
(D) title VII of the Tariff Act of 1930 (19 U.S.C. 1671 et
seq., relatingto the imposition of countervailingduties and
antidumping duties);
(E) section 232 of the Trade Expansion Act of 1962 (19
US.C. 1862, relating to the safeguardingof national securi-
ty); and
(F) section 337 of the Tariff Act of 1930 (19 US.C. 1337,
relating to unfairpractices in import trade).
[SEC. 340. DOMESTIC VALUE-CONVERSION OF RATES.
[(a) CONVERSION OF RATES BY COMMISSION.-The commission
shall ascertain, with respect to each of the ad volorem rates of
duty, and each of the rates of duty regulated by the value of the
article, specified in this Act, an ad valorem rate (or a rate regulat-
ed by the value of the article, as the case may be) which if applied
upon the basis of domestic value would have resulted as nearly as
possible in the imposition, during the period from July 1, 1927, to
June 30, 1929, both dates inclusive, of amounts of duty neither
greater nor less than would have been collectible at the rate speci-
fied in this Act applied upon the basis of value defined in section
402 of the Tariff Act of 1922.
[(b) REPORT To CONGRESS BY COMMISSION.-The commission
shall, as soon as practicable, but in no event later than July 1,
1932, submit a report to the Congress setting forth the classes of
articles with respect to which the conversion of rates has been
made, together with the converted rates applicable thereto.
[(c) DATA To BE FURNISHED BY SECRETARY OF TREASURY AND SEC-
RETARY OF COMMERCE.-To assist the commission in carrying out
the provisions of this section, the Secretary of the Treasury and the
Secretary of Commerce are authorized and directed to furnish to
the commission, upon request, any data or information in the pos-
session or control of their respective departments relating to the
importation, entry, appraisement, and classification of merchandise
and the collection of duties thereon.
[(d) DEFINITIONS.-When used in this section-
[(1) The term "domestic value," applied with respect to im-
ported merchandise, means
[(A) the price at which such or similar imported mer-
chandise is freely offered for sale, at the time of exporta-
 tion of the imported merchandise, packed ready for deliv-
ery, in the principal market of the United States to all
purchasers, in the usual wholesale quantities and in the
ordinary course of trade, or
[(B) if such or similar imported merchandise is not so
offered for sale in the United States, then an estimated
value, based on the price at which merchandise, whether
imported or domestic, comparable in construction or use
with the imported merchandise, is so offered for sale, with
such adjustments as may be necessary owing to differences
in size, material, construction, texture, and other differ-
ences.
[(2) The term "rate of duty regulated by the value of the ar-
ticle" means a rate of duty regulated in any manner by the
value of the article, and includes the value classification by
which such rate is regulated.]
SEC. 340. TARGETING SUBSIDY MONITORING PROGRAM
(a) The Commission shall establish and implement a continuing
program to monitor and analyze the industrialplans and policies of
foreign countries and instrumentalitiesin order to discover whether
targeting subsidies (as defined in section 711(5)(B)) are being
planned or have been implemented.
(b) In implementing the program, the Commission shall give prior-
ity to those countries and instrumentalities and product sectors in
which the United States has significant economic or commercial in-
terests. The Commission shall consult with other appropriateFeder-
al agencies and solicit the views and comments of the public in de-
termining prioritiesfor purposes of the preceding sentence.
(c) The Commission shall regularly report the information result-
ing from the program to the administering authority (as defined in
section 771(1)) and shall make such information (other than that re-
quiring confidential treatment)available to the public.
(d) Each agency of the United States shall provide to the Commis-
sion, upon its request, such information as the Commission consid-
ers to be necessary or appropriatefor purposes of carrying out this
section. Classified information shall be provided to the Commission
under this subsection if the provider agency is satisfied that the
Commission will enforce appropriatemeasures to prevent the loss or
unathorized disclosure of the information.

TITLE IV-ADMINISTRA TIVE PRO VISIONS

PART Ill-ASCERTAINMENT, COLLECTION, AND RECOVERY

OF DUTIES

SEC. 514. FINALITY OF DECISIONS; PROTESTS.-

(a) FINALITY OF DEcIsIoNs.-Except as provided in Subsection
(b) of this section, section 501 (relating to voluntary reliquidations),
section 516 (relatingto petitions by domestic interestedparties as de-
fined in section [771(9)(C), (D), and (E) of this Act] 771(9)(C), (D),
(E), and (F) of this Act, section 520 (relating to refunds and errors),
and section 521 (relating to reliquidations on account of fraud) of
this Act, decisions of the appropriate customs officer, including the
legality of all orders and findings entering into the same, as to-
(1) the appraisedvalue of merchandise;
(2) the classification and rate and amount of duties chargea-
ble;
(3) all charges or exactions of whatever character within the
jurisdictionof the Secretary of the Treasury;
(4) the exclusion of merchandise from entry or delivery or a
demand for redelivery to customs custody under any provision
of the customs laws, except a determination appealable under
section 337 of this Act;
(5) the liquidation or reliquidationof an entry, or any modifi-
cation thereof,;
(6) the refusal to pay a claim for drawback; and
(7) the refusal to reliquidate an entry under section 520(c) of
this Act,
shall be final and conclusive upon all persons (including the United
States and any officer thereof) unless a protest is filed in accordance
with this section, or unless a civil action contesting the denial of a
protest, in whole or in part, is commenced in the United States
Court of International Trade in accordance with chapter 169 of title
28 of the United States Code within the time prescribed by section
2636 of that title. When a judgment or order of the United States
Court of International Trade has become final, the papers transmit-
ted shall be returned, together with a copy of the judgment or order
to the appropriatecustoms officer, who shall take action according-
ly.
SEC. 516A. JUDICIAL REVIEW IN COUNTERVAILING DUTY AND ANTIDUMP-
ING DUTY PROCEEEDINGS.
(a) REVIEW OF DETERMINATION.-
[(1) REVIEW OF CERTAIN DETERMINATIONS.-
[(A) THIRTY-DAY REVIEW.-Within 30 days after the date
of publication in the Federal Register of notice of-
[(i) a determination by the Secretary or the admin-
istering authority, under section 303(a)(3), 702(c), or
732(c) of this Act, not to initiate an investigation,
[(ii) a determination by the administering authority
or the Commission, under section 751(b) of this Act,
not to review an agreement or a determination based
upon changed circumstances, or
[(iii) a negative determination by the Commission,
under section 703(a) or 733(a) of this Act, as to wheth-
er there is reasonable indication of material injury,
threat of material injury, or material retardation,
an interested party who is a party to the proceeding in
connection with which the matter arises may commence
an action in the United States Court of International
Trade by filing concurrently a summons and complaint,
each with the content and in the form, manner, and style
prescribed by the rules of that court, contesting any factu-
 58
al findings or legal conclusions upon which the determina.
tion is based.
E(B) TEN-DAY REVIEW.-Within 10 days after the date of
publication in the Federal Register of notice of-
[(i) a determination by the administering authority,
under section 703(c) or 733(c) of this Act, that a case is
extraordinarily complicated, or
[(ii) a negative determination by the administering
authority under section 703(b) or 733(b) of this Act,
an interested party who is a party to the proceeding in
connection with which the matter arises may commence
an action in the United States Court of International
Trade by filing concurrently a summons and complaint,
each with the content and in the form, manner, and style
prescribed by the rules of that court, contenting any factu-
al findings or legal conclusions upon which the determina-
tion is based.]
(1) REVIEW OF CERTAIN DETERMINATIONS. -Within 30 days
after the date of publication in the FederalRegister of-
(A) a determination by the administering authority,
under 702(c) or 732(c) of this Act, not to initiatean investi-
gation,
(B) a determination by the Commission, under section
751(b) of this Act, not to review a determination based upon
changed circumstances,or
(C) a negative determination by the Commission, under
section 703(a) or 733(a) of this Act, as to whether there is
reasonable indication of material injury, threat of material
injury, or material retardation,
an interested party who is a party to the proceeding in connec-
tion with which the matter arises may commence an action in
the United States Court of International Trade by filing concur-
rently a summons and complaint, each with the content and in
the form, manner, and style prescribed by the rules of that
court, contesting any factual findings or legal conclusions upon
which the determination is based.
(2) REVIEW OF DETERMINATIONS ON RECORD.-
(A) IN GENERAL.-Within thirty days after [the date of
publication in the Federal Register of]-
E(i) notice of any determination described in clause
(ii), (iii), (iv), or (v) of subparagraph (B), or
[(ii) an antidumping or countervailing duty order
based upon any determination described in clause (i)
of subparagraph (B),]
(i) the date of publication in the Federal Register
of-
(I) notice of any determination described in
clause (ii), (iii), (iv), or (v) of subparagraph(B), or
(II) an antidumpingor countervailingduty order
based upon any determination described in clause
(i) of subparagraph(B), or
(ii) the date of mailing of a determinationdescribed
in clause (vi) of subparagraph(B),
an interested party who is a party to the proceeding in
connection with which the matter arises may commence
an action in the United States Court of International
Trade by filing a summons, and within thirty days thereaf-
ter a complaint, each with the content and in the form,
manner, and style prescribed by the rules of that court,
contesting any factual findings or legal conclusions upon
which the determination is based.
[(B) REVIEWABLE DETERMINATIONS.-The determinations
which may be contested under subparagraph (A) are as fol-
lows:
[(i) Final affirmative determinations by the Secre-
tary and by the Commission under section 303, or by
the administering authority and by the Commission
under section 705 or 735 of this Act.
[(ii) A final negative determination by the Secre-
tary, the administering authority, or the Commission
under section 303, 705, or 735 of this Act.
[(iii) A determination, other than a determination
reviewable under paragraph (1), by the Secretary, the
administering authority, or the Commission under sec-
tion 751 of this Act.
[(iv) A determination by the administering author-
ity, under section 704 or 734 of this Act, to suspend an
antidumping duty or a countervailing duty investiga-
tion.
[(v) An injurious effect determination by the Com-
mission under section 704(h) or 734(h) of this Act.]
(B) REVIEWABLE DETERMINATIONS. -The determinations
which may be contested under subparagraph(A) are as fol-
lows:
i) Final affirmative determinations by the adminis-
tering authority and by the Commission under section
705 or 735 of this Act, including any negative part of
such a determination (other than a part referred to in
clause (ii)).
(ii) A final negative determination by the administer-
ing authority or the Commission under section 705 or
735 of this Act, including, at the option of the appel-
lant, any part of a final affirmative determination
which specifically excludes any company or product.
(iii) A final determination, other than a determina-
tion reviewable underparagraph(1), by the administer-
ing authority or the Commission under section 751 of
this Act.
(iv) A determination by the Administering authority,
under section 704 or 734 of this Act, to suspend an
antidumping duty or a countervailing duty investiga-
tion, including any final determination resulting from
a continued investigation which changes the size of the
dumping margin or net subsidy calculated, or the rea-
soning undelying such calculations, at the time the
suspension agreement was concluded.
 60
(v) An injurious effect determination by the Commis.
sion under section 704(h) or 734(h) of this Act.
(vi) A determination by the administering authority
as to whether a particular type of merchandise is
within the class or kind of merchandise described in
an existing finding of dumping or antidumping or
countervailing duty order.
(3) ExcEpTioN.--Notwithstanding the limitation imposed by
paragraph(2)(A)(ii) of this subsection, a final affirmative deter-
mination by the administering authority under section 705 or
735 of this Act may be contested by commencing an action, in
accordance with the provisions of paragraph (2)A), within
thirty days after the date of publication in the FederalRegister
of a final negative determination by the Commission under sec-
tion 705 or 735 of this Act which is predicated upon the size of
either the dumping margin or net subsidy determined to exist.
[(3)] (4) PROCEDURES AND FEES.-The procedures and fees
set forth in chapter 169 of title 28, United States Code, apply
to an action under this section.

TITLE VII-COUNTERVAILING AND ANTIDUMPING DUTIES

Subtitle A-Imposition of Countervailing Duties
Sec. 701. Countervailing duties imposed.
Sec. 702. Procedures for initiating a countervailing duty investigation.
Sec. 703. Preliminary determinations.
Sec. 704. Termination or suspension of investigation.
Sec. 705. Final determinations.
Sec. 706. Assessment of duty.
Sec. 707. Treatment of difference between deposit of estimated countervailing duty
and final assessed duty under countervailing duty order.
Subtitle B-Imposition of Antidumping Duties
Sec. 731. Antidumping duties imposed.
Sec. 732. Procedures for initiating an antidumping duty investigation.
Sec. 733. Preliminary determinations.
Sec. 734. Termination or suspension of investigation.
Sec. 735. Final determinations.
Sec. 736. Assessment of duty.
Sec. 737. Treatment of difference between deposit of estimated antidumping duty
and final assessed duty under antidumping duty order.
Sec. 738. Conditional payment of antidumping duty.
Sec. 739. Duties of customs officers.
Sec. 740. Antidumping duty treated as regular duty for drawback purposes.
[Subtitle C-Review of Determinations
[Sec. 751. Administrative review of determinations.]
Subtitle C-Reviews; Other Actions RegardingAgreements
CHAPTER 1-REVIEW OFAMOUNT OF DUTY AND AGREEMENTS OTHER
THAN QUANTITATIVE RESTRICTION AGREEMENTS
Sec. 751. Administrative review of determinations.
CHAPTER 2-NEGOTIA TIONS AND DETERMINATIONS REGARDING
QUANTITATIVE RESTRICTION AGREEMENTS
Sec. 761. Required negotiations.
Sec. 762. Required determinations.
 Subtitle D-General Provisions
Sec. 771. Definitions; special rules.
Sec. 771A. Upstream subsidies and downstream dumping.
Sec. 772. United States price.
Sec. 773. Foreign market value.
Sec. 774. Hearings.
Sec. 775. Subsidy practices discovered during an investigation.
Sec. 776. Verification of information.
Sec. 777. Access to information.
Sec. 777A. Sampling and averaging.
Sec. 778. Interest on certain overpayments and underpayments.

Subtitle A-Imposition of Countervailing

Duties
SEC. 701. COUNTERVAILING DUTIES IMPOSED.
(a) GENERAL RULE.-If-
(1) the administering authority determines that-
(A) a country under the Agreement, or
(B) a person who is a citizen or national of such a coun-
try, or a corporation, association, or other organization or-
ganized in such a country,
is providing, directly or indirectly, a subsidy with respect to
the manufacture, production, or exportation of a class or kind
of merchandise imported, or sold (or likely to be sold) for im-
portation,into the United States, and
(2) the Commission determines that-
(A) an industry in the United States-
(i) is materially injured, or
(ii) is threatened with material injury, or
(B) the establishment of an industry in the United States
is materially retarded,
by reason of imports of that merchandise or by reason of sales
(or the likelihood of sales) of that merchandise for importation,
then there shall be imposed upon such merchandise a countervail-
ing duty, in addition to any other duty imposed, equal to the
amount of the net subsidy. For purposes of this subsection and sec-
tion 705(b)(1), a reference to the sale of merchandise includes the en-
tering into of any leasing arrangement regarding the merchandise
that is equivalent to the sale of the merchandise.

SEC. 704. TERMINATION OR SUSPENSION OF INVESTIGATION.

[(a) TERMINATION OF INVESTIGATION ON WITHDRAWAL OF PETI-
TION.-An investigation under this subtitle may be terminated by
either the administering authority or the Commission after notice
to all parties to the investigation, upon withdrawal of the petition
by the petitioner. The Commission may not terminate an investiga-
tion under the preceding sentence before a preliminary determina-
tion is made by the administering authority under section 703(b).]
(a) TERMINATION OF INVESTIGATION UPON WITHDRAWAL OF PETI-
TION.-
(1) IN GENERAL.-Except as provided in paragraphs (2) and
(3), an investigation under this subtitle may be terminated by
 either the administering authority or the Commission, after
notice to all parties to the investigation, upon withdrawal of
the petition by the petitioner or by the administeringauthority
if the investigation was initiated under section 702(a).
(2) SPECIAL RULES FOR QUANTITATIVE RESTRICTION AGREE-
MENTS. -
(A) IN GENERAL.-Subject to subparagraphs(B) and (C),
the administeringauthority may not terminate an investi.
gation under paragraph(1) by accepting, with the govern-
ment of the country in which the subsidy practice is alleged
to occur, an understanding or other kind of agreement to
limit the volume of imports into the United States of the
merchandise that is subject to the investigation unless the
administeringauthority is satisfied that termination on the
basis of that agreement is in the public interest.
(B) PUBLIC INTEREST FACTORS.-In making a decision
under subparagraph (A) regarding the public interest, the
administeringauthority shall take into account-
(i) whether, based upon the relative impact on con-
sumer prices and the availability of supplies of the
merchandise, the agreement would have a greater ad-
verse impact on United States consumers than the im-
position of countervailingduties;
(ii) the relative impact on the internationaleconomic
interests of the United States; and
(iii) the relative impact on the competitiveness of the
domestic industry producing the like merchandise, in-
cluding any such impact on employment and investi-
ment in that industry.
(C) PRIOR CONSULTATIONS.-Before making a decision
under subparagraph (A) regarding the public interest, the
administeringauthority shall consult with-
(i) potentially affected consuming industries;and
(ii) potentially affected producers and workers in the
domestic industry producing the like merchandise, in-
cluding producers and workers not party to the investi-
gation.
(3) LIMITATION ON TERMINATION BY COMMISSION.-The Com-
mission may not terminate an investigation under paragraph
(1) before a preliminary determination is made by the adminis-
tering authority under section 703(b).
(b) AGREEMENTS To ELIMINATE [OR OFFSET] COMPLETELY A SUB-
SIDY OR To CEASE EXPORTS OF SUBSIDIZED MERCHANDISE.-The ad-
ministrating authority may suspend an investigation if the govern-
ment of the country in which the subsidy practice is alleged to
occur agrees, or exporters who account for substantially all of the
imports of the merchandise which is the subject of the investigative
agree-
[(1) to eliminate the subsidy completely or to offset com-
pletely the amount of the net subsidy, with respect to that
merchandise exported directly or indirectly to the United
States, within 6 months after the date on which the investiga-
tion is suspended, or]
 (1) to eliminate the subsidy completely with respect to that
merchandise exported directly or indirectly to the United States
on the date the investigation is suspended, or
[(2) to cease exports of that merchandise to the United
States [within 6 months after the date on which] on the date
the investigation is suspended.

(d)ADDITIONAL RULES AND CONDITIONS.-

(1) PUBLIC INTEREST; MONITORING.-The administering au-
thority shalld not accept an agreement under subsection (b) or
(c) unless-
(A) it is satisfied that suspension of the investigation is
in the public interest, and
(B) effective monitoring of the agreement by the United
States is practicable.
In applying subparagraph(A) with respect to any quantitative
restriction agreement under subsection (c), the administering
authority shall take into account, in addition to such other fac-
tors as are considered necessary or appropriate, the factors set
forth in subsection (a)(2)(B)(i), (ii), and (iii) as they apply to the
proposed suspension and agreement, after consulting with the
appropriate consuming industries, producers, and workers re-
ferred to in subsection (a)(2)(0(i) and (ii).
[(2) EXPORTS OF MERCHANDISE TO UNITED STATES NOT TO IN-
CREASE DURING INTERIM PERIOD.-The administering authority
may not accept any agreement under subsection (b) unless that
agreement provides a means of ensuring that the quantity of
the merchandise covered by that agreement exported to the
United States during the period provided for elimination or
offset of the subsidy or cessation of exports does not exceed the
quantity of such merchandise exported to the United States
during the most recent representative period determined by
the administering authority.]
[(3) (2) REGULATIONS GOVERNING ENTRY OR WITHDRAWALS.-
In order to carry out an agreement concluded under subsection
(b) or (c), the administering authority is authorized to prescribe
regulations governing the entry, or withdrawal from warhouse,
for consumption of merchandise covered by such agreement.
(g) INVESTIGATION To BE CONTINUED UPON REQUEST.-If the ad-
ministering authority, within 20 days after the date of publication
of the notice of suspension of an investigation, receives a request
for the continuation of the investigation from-
(1) the government of the country in which the subsidy prac-
tice is alleged to occur, or
(2) an interested party described in subparagraph [(C), (D),
or (E)] (C), (D), (E), and (F) of section 771(9) which is a party to
the investigation,
then the administering authority and the Commission shall contin-
ue the investigation.
(h) REVIEW OF SUSPENSION.-
(1) IN GENERAL.-Within 20 days after the suspension of an
investigation under subsection (c), an interested party which is
a party to the investigation and which is described in subpara-
 graph [(C), (D), or (E)] (C), (D), (E), and (F) of section 771(9)
may, by petition filed with the Commission and with notice to
the administering authority, ask for a review of the suspen-
sion.

(i) VIOLATION OF AGREEMENT.-

(1) IN GENERAL.-If the administering authority determines
that an agreement accepted under subsection (b) or (c) is being,
or has been, violated, or no longer meets the requirements of
such subsection (other than the requirement, under subsection
(c)(1), of elimination of injury) and subsection (d), then, on the
date of publication of its determination, it shall-
(A) suspend liquidation under section 703(d)(1) of unliqui-
dated entries of the merchandise made on or after the
later of-
(i) the date which is 90 days before the date of publi-
cation of the notice of suspension of liquidation, or
(ii) the date on which the merchandise, the sale or
export to the United States of which was an violation
of the agreement, or under an agreement which no
longer meets the requirements of subsections (b) and
(d) or (c) and (d), was first entered, or withdrawn from
warehouse, for consumption,
(B) if the investigation was not completed, resume the
investigation as if its affirmative preliminary determina-
tion under section 703(b) were made on the date of its de-
termination under this paragraph,
(C) if the investigation was completed under subsection
(g), issue a countervailing duty order under section 706(a)
effective with respect to entries of merchandise the liqui-
dation of which was suspended, [and]
(D) if it considers the violation to be intentional, notify
the Commissioner of Customs who shall take appropriate
action under paragraph(2), and
[(D)] (E) notify the petitioner, interested parties who
are or were parties to the investigation, and the Commis-
sion of its action under this paragraph.

SEC. 705. FINAL DETERMINATIONS.

(a) FINAL DETERMINATION BY ADMINISTERING AUTHORITY.-
(1) IN GENERAL.-Within 75 days after the date of its prelimi-
nary determination under section 703(b), the administering au-
thority shall make a final determination of whether or not a
subsidy is being provided with respect to the merchandise.
(2) CRITICAL CIRCUMSTANCES DETERMINATIONS.-If the final
determination of the administering authority is affirmative,
then that determination, in any investigation in which the
presence of critical circumstances has been alleged under sec-
tion 7 03(e), shall also contain a finding as to whether-
(A) the subsidy is inconsistent with the agreement, and
(B) there have been massive imports of the class or kind
of merchandise involved over a relatively short period.
 (b) FINAL DETERMINATION BY COMMISSION.-
(1) IN GENERAL.-The Commission shall make a final deter-
mination of whether-
(A) an industry in the United States-
(i) is materially injured, or
(ii) is threatened with material injury, or
(B) the establishment of an industry in the United States
is materially retarded,
by reason of imports, or sales (or the likelihood of sales) for im-
portation, of the merchandise with respect to which the admin-
istering authority has made an affirmative determination
under subsection (a).

Subtitle B-Imposition of Antidumping Duties

SEC. 731. ANTIDUMPING DUTIES IMPOSED.
If-
(1) the administering authority determines that a class or
kind of foreign merchandise is being, or is likely to be, sold in
the United States at less than its fair value, and
(2) the Commission determines that-
(A) an industry in the United States-
(i) is materially injured, or
(ii) is threatened with material injury, or
(B) the establishment of an industry in the United States
is materially retarded,
by reason of imports of that merchandise,
then there shall be imposed upon such merchandise an antidump-
ing duty, in addition to any other duty imposed, in an amount
equal to the amount by which the foreign market value exceeds the
United States price for the merchandise. For purposes of this sec-
tion and section 735(b)(1), a reference to the sale of foreign merchan-
dise includes the entering into of any leasing arrangementregarding
the merchandise that is equivalent to the sale of the merchandise.
SEC. 732. PROCEDURES FOR INITIATING AN ANTIDUMPING DUTY INVES-
TIGATION.
[(a) INITIATION BY ADMINISTERING AUTHORITY.-An antidumping
duty investigation shall be commenced whenever the administering
authority determines, from information available to it, that a
formal investigation is warranted into the question of whether the
elements necessary for the imposition of a duty under section 731
exist.]
(a) INITIATION BY ADMINISTERING AUTHORITY.-
(1) IN GENERAL.-An antidumping duty investigation shall be
commenced whenever the administering authority determines,
from information available to it, that a formal investigation is
warranted into the question of whether the elements necessary
for the imposition of a duty under section 731 exist.
(2) CASES INVOLVING CERTAIN MERCHANDISE OF A KIND SUB-
JECT TO PREVIOUS DETERMINATIONS UNDER SECTION 735.-
(A) IN GENERAL. -If-
(i) within the 2-year period before the date on which
a petition is filed under subsection (b), final affirma-

H. Rept. 98-725 0 - 84 - 4
 tive determinations were made under section 735 (a)
and (b) regarding merchandise of the same class or
kind as that covered by the petition (other than mer-
chandise of that kind or class imported from the coun.
try to which the petition applies or from any addition-
al supplier country); and
(ii) in that petition the petitioner also alleges that
the elements necessary for the imposition of a duty
under section 731 exist with respect to merchandise of
that same class or kind being, or likely to be, imported
from one or more additionalsupplier countries;
the administering authority shall decide, within 20 days
after the date on which the petition is filed, whether infor-
mation reasonably available to the petitioner in the peti-
tion, as well as such relevant information as may be avail-
able to the administering authority, regarding each addi-
tional supplier country is sufficient to commence a formal
investigation under paragraph(1) regarding imports of mer.
chandise of that class or kind from that country.
(B) ACTION AFTER DECISION.-If the decision of the ad-
ministering authority under subparagraph(A) regardingan
additionalsupplier country-
(i) is affirmative, a formal investigation shall be
commenced under paragraph(1); or
(ii) is negative, the administering authority and the
Commission shall monitor importations of merchan-
dise of that class or kind from that country for such
period of time (but not less than one year) as may be
necessary for the administering authority to decide
whether or not there is sufficient information to com-
mence a formal investigation under paragraph(1) re-
garding that country, and if that decision is affirma-
tive, the administering authority shall immediately
commence such an investigation.
(C) DEFINITION.-For purposes of this paragraph, the
term "additionalsupplier country" means a country-
(i) other than the country to which the petition re-
ferred to in subparagraph(A) applies; and
(ii) regarding which no investigation is currently
pending under this subtitle with respect to imports
from that country of the class or kind of merchandise
covered by that petition.
(D) EXPEDITIOUS ACTION.-The administering authority
and the Commission, to the extent practicable,shall expe-
dite proceedings under this subtitle undertaken as a result
of a formal investigation commenced on any petition re-
ferred to in subparagraph(A) or under subparagraph(B).

SEC. 734. TERMINATION OR SUSPENSION OF INVESTIGATION.

[(a) TERMINATION OF INVESTIGATION ON WITHDRAWAL OF PETI-
TION.-An investigation under this subtitle may be terminated by
either the administering authority or the Commission after notice
to all parties to the investigation, upon withdrawal of the petition
by the petitioner. The Commission may not terminate an investiga-
tion under the preceding sentence before a preliminary determina-
tion is made by the administering authority under section 733(b).]
(a) TERMINATION OF INVESTIGATION UPON WITHDRAWAL OF PETI-
TION.-
(1) IN GENERAL.-Except as provided in paragraphs(2) and
(8), an investigation under this subtitle may be terminated by
either the administering authority or the Commission, after
notice to all parties to the investigation, upon withdrawal of
the petition by the petitioner or by the administeringauthority
if the investigation was initiated under section 732(a).
(2) SPECIAL RULES FOR QUANTITATIVE RESTRICTION AGREE-
MENTS. -
(A) IN GENERAL.-Subject to subparagraphs(B) and (C),
the administeringauthority may not terminate an investi-
gation under paragraph(1) by accepting an understanding
or other kind of agreement to limit the volume of imports
into the United States of the merchandise that is subject to
the investigation unless the administeringauthority is sat-
isfied that termination on the basis of that agreement is in
the public interest.
(B) PUBLIC INTEREST FACTORS.-In making a decision
under subparagraph(A) regarding the public interest, the
administeringauthority shall take into account-
(i) whether, based upon the relative impact on con-
sumer prices and the availability of supplies of the
merchandise, the agreement would have a greater ad-
verse impact on United States consumers than the im-
position of antidumping duties;
(ii) the relative impact on the internationaleconomic
interests of the United States; and
(iii) the relative impact on the competitiveness of the
domestic industry producing the like merchandise, in-
cluding any such impact on employment and invest-
ment in that industry.
(C) PRIOR CONSULTATIONS.-Before making a decision
under subparagraph(A) regarding the public interest, the
administeringauthority shall consult with-
(i) potentially affected consuming industries;and
(ii) potentially affected producers and workers in the
domestic industry producing the like merchandise, in-
cluding producers and workers not party to the investi-
gation.
(8) LIMITATION ON TERMINATION BY COMMISSION.-The Com-
mission may not terminate an investigation under paragraph
(1) before a preliminarydetermination is made by the adminis-
tering authority under section 733(b).
(b) AGREEMENTS To ELIMINATE COMPLETELY SALES AT LESS THAN
FAIR VALUE OR To CEASE EXPORTS OF MERCHANDISE.-The adminis-
tering authority may suspend an investigation if the exporters of
the merchandise which is the subject of the investigation who ac-
count for substantially all of the imports of that merchandise
agree-
 (1) to cease exports of the merchandise to the United States
[within 6 months after the date on which] on the date the in-
vestigation is suspended, or
(2) to revise their prices to eliminate completely any amount
by which the foreign market value of the merchandise which is
the subject of the agreement exceeds the United States price of
that merchandise.

[(d) ADDITIONAL RULES AND CONDITIONS.-

[(1) PUBLIC INTEREST; MONITORING.-The administering au-
thority shall not accept an agreement under subsection (b) or
(c) unless-
[(A) it is satisfied that suspension of the investigation is
in the public interest, and
[(B) effective monitoring of the agreement by the
United States is practicable.
(2) EXPORTS OF MERCHANDISE TO UNITED STATES NOT TO IN-
CREASE DURING INTERIM PERIOD.-The administering authority
may not accept any agreement under subsection (bXl) unless
that agreement provides a means of ensuring that the quantity
of the merchandise covered by the agreement exported to the
United States during the period provided for cessation of ex-
ports does not exceed the quantity of such merchandise export-
ed to the United States during the most recent representative
period determined by the administering authority.]
(d) ADDITIONAL RULES AND CONDITIONs.-The administering au-
thority may not accept an agreement under subsection (b) or (c)
unless-
(1) it is satisfied that suspension of the investigation is in the
public interest, and
(2) effective monitoring of the agreement by the United States
is practicable.

(g) INVESTIGATION To BE CONTINUED UPON REQUEST.-If the ad-

ministering authority, within 20 days after the date of publication
of the notice of suspension of an investigation, receives a request
for the continuation of the investigation from-
(1) an exporter or exporters accounting for a significant pro-
portion of exports to the United States of the merchandise
which is the subject of the investigation, or
(2) an interested party described in subparagraph [(C), (D),
or (E)] (C), (D), (E), and (F) of section 771(9) which is a party to
the investigation,
then the administering authority and the Commission shall contin-
ue the investigation.
(h) REVIEW OF SUSPENSION.-
(1) IN GENERAL.-Within 20 days after the suspension of an
investigation under subsection (c), an interested party which is
a party to the investigation and which is described in subpara-
graph [(C), (D), or (E)] (C), (D), (E), and (F) of section 771(9)
may, by petition filed with the Commission and with notice to
the administering authority, ask for a review of the suspen-
sion.
(2) COMMISSION INVESTIGATION.-Upon receipt of a review pe-
tition under paragraph (1), the Commission shall, within 75
days after the date on which the petition is filed with it, deter-
mine whether the injurious effect of imports of the merchan-
dise which is the subject of the investigation is eliminated com-
pletely by the agreement. If the Commission's determination
under this subsection is negative, the investigation shall be re-
sumed on the date of publication of notice of such determina-
tion as if the affirmative preliminary determination under sec-
tion 733(b) had been made on that date.
(3) SUSPENSION OF LIQUIDATION TO CONTINUE DURING REVIEW
PERIOD.-The suspension of liquidation of entries of the mer-
chandise which is the subject of the investigation shall termi-
nate at the close of the 20-day period beginning on the day
after the date on which notice of suspension of the investiga-
tion is published in the Federal Register, or, if a review peti-
tion is filed under paragraph (1) with respect to the suspension
of the investigation, in the case of an affirmative determina-
tion by the Commission under paragraph (2), the date on which
notice of an affirmative determination by the Commission is
published. If the determination of the Commission under para-
graph (2) is affirmative, then the administering authority
shall-
(A) terminate the suspension of liquidation under section
733(d)(1), and
(B) release any bond or other security, and refund any
cash deposit, required under section 733(d)(2).
i) VIOLATION OF AGREEMENT.-
(1) IN GENERAL.-If the administering authority determines
that an agreement accepted under subsection (b) or (c) is being,
or has been, violated, or no longer meets the requirements of
such subsection (other than the requirement, under subsection
(c)(1), of elimination of injury) and subsection (d), then, on the
date of publication of its determination, it shall-
(A) suspend liquidation under section 733(d)(1) of unliqui-
dated entries of the merchandise made on the later of-
(i) the date which is 90 days before the date of publi-
cation of the notice of suspension of liquidation, or
(ii) the date on which the merchandise, the sale or
export to the United States of which was in violation
of the agreement, or under an agreement which no
longer meets the requirements of subsections (b) and
(d), or (c) and (d), was first entered, or withdrawn from
warehouse, for consumption,
(B) if the investigation was not completed, resume the
investigation as if its affirmative preliminary determina-
tion were made on the date of its determination under this
paragraph,
(C) if the investigation was completed under subsection
(g), issue an antidumping duty order under section 736(a)
effective with respect to entries of merchandise liquidation
of which was suspended, [and]
 (D) if it considers the violation to be intentional, notify
the Commissioner of Customs who shall take appropriate
action underparagraph(2), and
[D] (E) notify the petitioner, interested parties who are
or were parties to the investigation, and the Commission
of its action under this paragraph.

[Subtitle C-Review of Determinations]

Subtitle C-Reviews; Other Actions Regarding
Agreements
CHAPTER I-REVIEW OF AMOUNT OF DUTY AND
AGREEMENTS OTHER THAN QUANTITATIVE RE.
STRICTION A GREEMENTS
SEC. 751. ADMINISTRATIVE REVIEW OF DETERMINATIONS.
(a) PERIODIC REVIEW OF AMOUNT OF DUTY.-
(1) IN GENERAL.-At least once during each 12-month period
beginning on the anniversary of the date of publication of a
countervailing duty order under this title or under section 303
of this Act, an antidumping duty order under this title or a
finding under the Antidumping Act, 1921, or a notice of the
suspension of an investigation, the administering authority, if
a request for such a review has been received and after publica-
tion of notice of such review in the Federal Register, shall-
(A) review and determine the amount of any net subsidy,
(B) review, and determine (in accordance with paragraph
(2)), the amount of any antidumping duty, and
(C) review the current status of, and compliance with,
any agreement by reason of which an investigation was
suspended, and review the amount of any net subsidy or
margin of sales at less than fair value involved in the
agreement,
and shall publish the results of such review, together with
notice of any duty to be assessed, estimated duty to be deposit-
ed, or investigation to be resumed in the Federal Register.
(2) DETERMINATION OF ANTIDUMPING DUTIES.-For the pur-
pose of paragraph (1)(B), the administering authority shall de-
termine-
(A) the foreign market value and United States price of
each entry of merchandise subject to the antidumping
duty order and included within that determination, and
(B) the amount, if any, by which the foreign market
value of each such entry exceeds the United States price of
the entry.
The administering authority, without revealing confidential in-
formation, shall publish notice of the results of the determina-
tion of antidumping duties in the Federal Register, and that
determination shall be the basis for the assessment of anti-
 dumping duties on entries of the merchandise included within
the determination and for deposits of estimated duties.
(b) REVIEWS UPON INFORMATION OR REQUEST.-
(1) IN GENERAL.-Whenever the administering authority or
the Commission receives information concerning, or a request
for the review of, an agreement accepted under section [704 or
734], 704 (other than an a quantitative restriction agreement
described in subsection (a)(2) or (c)(3)) or 734 (other than a quan-
titative restriction agreement described in subsection (a)(2)) or
an affirmative determination made under section 704(h)(2),
705(a), 705(b), 734(h)(2), 735(a)[, or 735(b),], 735(b), 762(a)(1), or
762(a)2), which shows changed circumstances sufficient to war-
rant a review of such determination, it shall conduct such a
review after publishing notice of the review in the Federal
Register. In reviewing its determination under section 704(h)(2)
or 734(h)(2), the Commission shall consider whether, in the
light of changed circumstances, an agreement accepted under
section 704(c) or 734(c) continues to eliminate completely the
injurious effects of imports of the merchandise.

CHAPTER 2-NEGOTIATIONS AND DETERMINA-

TIONS REGARDING QUANTITATIVE RESTRIC-
TION A GREEMENTS
SEC. 76L REQUIRED NEGOTIATIONS.
(a) IN GENERAL. -
(1)AGREEMENTS IN RESPONSES TO SUBSIDIES. -Within 90 days
after the administeringauthority accepts a quantitative restric-
tion agreement under section 704(a)(2) or (c)3), the President
shall enter into negotiations with the government that is party
to the agreement for purposes of-
(A) eliminatingthe subsidy completely, or
(B) reducing the net subsidy to a level that eliminates
completely the injurious effect of exports to the United
States of the merchandise.
(2) AGREEMENTS IN RESPONSE TO DUMPING PRACTICES.-
Within 90 days after the administering authority accepts a
quantitative restriction agreement under section 734(aX2), the
President shall enter into negotiations with the government of
the country from which was exported the merchandise that was
the subject of the terminated investigation for purposes of-
(A) eliminating the dumping practice; or
(B) reducing the dumping margin to a level that elimi-
nates completely the injurious effect of exports to the
United States of the merchandise.
(b) MODIFICATION OF AGREEMENTS ON BASIS OF NEGOTIATIONS.-
The administering authority may not implement any modification
to a quantitative restriction agreement resulting from negotiations
entered into under subsection (a) unless before the first anniversary
of the date on which the administeringauthority accepts the agree-
ment the following occur:
 (1) The Presidentsubmits to the administeringauthority,and
at the same time provides to those persons who were, or are,pe-
titioners and interested parties in the related proceedings under
subtitle A or B-
(A) a description of the proposed actions that the govern.
ment concerned is willing to take in order to achieve the ob-
jectives referred to in subsection (a)(1)(A) or (B) or (2)(A) or
(B), as the case may be; and
(B) the proposed modifications to the quantitativerestric-
tions provided for in the agreement that the President be.
lieves are justified in response to the implementing of such
actions.
(2) The administeringauthority,on the basis of the best infor-
mation available to it, decides that the proposed actions re-
ferred to in paragraph(1)(A) will either-
(A) eliminate completely the subsidy or dumping practice;
or
(B) reduce the net subsidy or dumping margin.
(3) If the decision of the administering authority underpara-
graph (2)(B) is affirmative, the Commission, on the basis of the
best information available to it, decides that the proposed ac-
tions and the proposed modifications referred to in paragraph
(1) are likely to eliminate completely the injurious effect of ex-
ports to the United States of the merchandise.
(4) The administeringauthority invites the comment of those
persons referred to in paragraph(1) regardingthe proposed ac-
tions and modifications and takes into account all such com-
ment that is timely submitted.
(5) The administering authority is satisfied that the govern-
ment concerned has implemented the actions referred to in sub-
section (a)(1)(A) or (B) or (2)(A) or (B), as the case may be, that it
proposed to take.
(C) SPECIAL RULE REGARDING AGREEMENTS UNDER SEcTION
704(c)(3).-This chapter shall cease to apply to a quantitative restric-
tion agreement described in section 704(c)(3) at such time as that
agreement ceases to have force and effect under section 704() or vio-
lation is found under section 704(i).
SEC. 762. REQUIRED DETERMINATIONS.
(a) IN GENERAL-Before the expiration date, if any, of a quantita-
tive restriction agreement accepted under section 704(aX2, 704 (cX3)
(if suspension of the related investigation is still in effect, or
734(a)(2)-
(1) the administeringauthorityshall determine-
(A) whether any subsidy is being provided with respect to
the merchandise subject to the agreement and, if being so
provided, the net subsidy, or
(B) whether the merchandise is being sold in the United
States at less than fair value and, if being so sold, the
margin of sales at less than fair value; and
(2) the Commission shall determine whether imports of the
merchandise of the kind subject to the agreement will, upon ter-
mination of the agreement, materially injure, or threaten with
 material injury, an industry in the United States or materially
retard the establishment of such an industry.
(b) DETERMINATION.-The determinations required to be made by
the administering authority and the Commission under subsection
(a) shall be made on the record, under such procedures as the ad-
ministering authority and the Commission, respectively, shall by
regulation prescribe, and shall be treated as final determinations
made under section 705 or 735, as the case may be, for purposes of
judicial review under section 516A. If the determinations by each
are affirmative, the administering authority shall issue a counter-
vailing duty order or antidumping duty order under section 706 or
736 effective with respect to merchandise entered on and after the
date on which the agreement terminates.
(c) HEARINGs.-The determinationproceedings required to be pre-
scribed under subsection (b) shall provide that the administering
authority and the Commission must, upon the request of any inter-
ested party, hold a hearing in accordance with section 774 on the
issues involved.

Subtitle D-General Provisions

SEC. 771. DEFINITIONS; SPECIAL RULES.
For purposes of this title-
(1) ADMINISTERING AUTHORITY.-* * *

[(5) SUBSIDY.-The term "subsidy" has the same meaning as

the term "bounty or grant" as that term is used in section 303
of this Act, and includes, but is not limited to, the following:
[(A) Any export subsidy described in Annex A to the
Agreement (relating to illustrative list of export subsidies).
[(B) The following domestic subsidies, if provided or re-
quired by government action to a specific enterprise or in-
dustry, or group of enterprises or industries, whether pub-
licly or privately owned, and whether paid or bestowed di-
rectly or indirectly on the manufacture, production, or
export of any class or kind of merchandise:
[(i) The provision of capital, loans, or loan guaran-
tees on terms inconsistent with commercial consider-
ations.
[(ii) The provision of goods or services at preferen-
tial rates.
[(iii) The grant of funds or forgiveness of debt to
cover operating losses sustained by a specific industry.
[(iv) The assumption of any costs or expenses of
manufacture, production, or distribution.]
(5) SUBSIDY Y. -
(A) IN GENERAL.-TThe term "subsidy" has the same
meaning as the term "bounty or grant" as that term is used
in section 303 of this Act, and includes, but is not limited
to, the following:
 (i) Any export subsidy described in Annex A to the
Agreement (relating to illustrative list of export subsi.
dies).
(ii) The following domestic subsidies, it-provided or
required by government action to a specific enterprise
or industry, or group of enterprises or industries,
whether publicly or privately owned, and whether paid
or bestowed directly or indirectly on the manufacture,
production, or export of any class or kind of merchan.
dise:
(I) The provision of capital, loans, or loan guar-
antees on terms inconsistent with commercial con.
siderations.
(II) The provision of goods or services at prefer-
ential rates.
(III) The grant of funds or forgiveness of debt to
cover operatinglosses sustained by a specific indus.
try.
(IV) The assumption of any costs or expenses of
manufacture,production, or distribution.
(iii) Any export targeting subsidy described in sub-
paragraph(B).
(iv) Any natural resource subsidy described in sub-
paragraph(C).
(v) Any upstream subsidy determined under section
771A.
(B) EXPORT TARGETING SUBSIDY.-
(i) IN GENERAL-The term "export targetingsubsidy"
means any government plan or scheme consisting of co-
ordinated actions, whether carried out severally or
jointly or in combination with any other subsidy under
subparagraph(A), that are bestowed on a specific enter-
prise, industry, or group thereof (hereinafter in this
paragraphreferred to as a "beneficiary") of a kind re-
ferred to in subparagraph (A)(ii) and the effect of
which is to assist the beneficiary to become more com-
petitive in the export of any class or kind of merchan-
dise. The actions referred to in the preceding sentence
include, but are not limited to, the following:
(I) The exercise of government control over banks
and other financial institutions that requires the
diversion of private capital on preferential terms to
specific beneficiaries or into specific sectors.
(II) Extensive government involvement in pro-
moting or encouraging anticompetitive behavior
among specific beneficiaries; including the provid-
ing of assistance in planning and establishing
joint ventures which have an anticompetitive
export effect, the relaxation of antitrust rules nor-
mally applied to beneficiaries to assure the devel-
opment of anticompetitive export cartels, the pro-
viding of assistance in planning or coordinating
joint research and development among selected
beneficiaries to promote export competitiveness,
 and regulating the division of markets or alloca-
tion of products among selected beneficiaries.
(III) Special protection of the home market that
permits the development of competitive exports in a
specific sector or product.
(IV) Special restrictions on technology transfer or
government procurement that limit competition in
a specific sector or beneficary and thereby promote
export competitiveness.
(V) The use of investment restrictions, including
domestic content and export performance require-
ments, that limit competition in a specific sector or
beneficiary and thereby promote export competi-
tiveness.
(ii) DETERMINATION OF LEVEL OF EXPORT TARGETING
SUBSIDY.-In determining the level of an export target-
ing subsidy, the administeringauthority shall utilize a
method of calculation which, in its judgment and to
the extent possible, reflects the full benefit of the subsi-
dy to the beneficiary over the period during which the
subsidy has an effect, rather than the cash cost of the
subsidy to the government.
(C) NATURAL RESOURCE SUBSIDY.-
(i) IN GENERAL.-A natural resource subsidy exists if
a naturalresource product is provided or sold within a
country (hereinafterreferred to as the "exporting coun-
try") by a government-regulatedor controlled entity, for
use (directly or indirectly) in the manufacture or pro-
duction of any class or kind of merchandise in the ex-
porting country, at a domestic price that, by reason of
such regulationor control-
(I) is lower than the export price or fair market
value (whichever is appropriate)of the product in
the exporting country, and
(II) is not freely available to United States pro-
ducers for purchase of that product for export to
the United States,
and that product would, if sold at the export price or
fair market value (whichever is appropriate),constitute
a significant portion of the total cost of the manufac-
ture or production of such merchandise.
(ii) LEVEL OF NATURAL RESOURCE SUBSIDY.-The level
of a natural resource subsidy is the difference between
the domestic price of the natural resource product and
the export price of that product;except that if-
(I) there are no exports of that product, or
(17) the export price of that product is distorted
by being either significantly higher or lower than
market prices in the relevant market by reason of
quotas or other government manipulation,
the level of the natural resource subidy is the differ-
ence between that domestic price and the fair market
value of thatproduct.
 (iii) DETERMINATION OF FAIR MARKET VALUE.-For
purposes of this subparagraph, the term "fair market
value" means the price that a willing buyer would pay
a willing seller for a natural resource product in an
arms-length transaction in the absence of government
regulation. In determining the fair market value, the
administeringauthority shall take into account-
(I) the prices at which the product is generally
available in world markets, and
(II) the market clearing price or the average
United States price, whichever is appropriate, at
which the product is generally available to United
States producers, and
shall also take into account the extent, if any, to
which-
(III)a comparative advantage of the exporting
country in relation to other sellers (for example,
any cost savings resulting from such factors as the
availability of abundant supplies, lower produc-
tion costs, or lower transportationcosts), and
(IV) the availability or lack of access to export
markets,
would result in a different market price in the export-
ing country in the absence of government regulation.

(7) MATERIAL INJURY.-

(A) IN GENERAL.-*

(C) EVALUATION OF VOLUME AND OF PRICE EFFECTS.-For

purposes of subparagraph (B)-
(i) VOLUME.-In evaluating the volume of imports of
merchandise, the Commission shall consider whether
the volume of imports of the merchandise, or any in-
crease in that volume, either in absolute terms or rela-
tive to production or consumption in the United
States, is significant.
(ii) PRICE.-In evaluating the effect of imports of
such merchandise on prices, the Commission shall con-
sider whether-
(I) there has been significant price undercutting
by the imported merchandise as compared with
the price of like products of the United States,
and
(II) the effect of imports of such merchandise
otherwise depresses prices to a significant degree
or prevents price increases, which otherwise
would have occurred, to a significant degree.
(iii) IMPACT ON AFFECTED INDUSTRY.-In examining
the impact on the affected industry, the Commission
shall evaluate all relevant economic factors which
have a bearing on the state of the industry, including,
but not limited to-
 (I) actual and potential decline in output, sales,
market share, profits, productivity, return on in-
vestments, and utilization of capacity,
(II) factors affecting domestic prices, and
(III) actual and potential negative effects on
cash flow, inventories, employment, wages,
growth, ability to raise capital, and investment.
(iv) CuMuLATION.-For purposes of clauses (i) and
(ii), the Commission shall cumulatively assess the
volume and effect of imports from two or more coun-
tries of like products subject to investigation if-
(I) the marketing of such imports in the United
States is reasonably coincident, and
(II) there is a reasonable indication that such
imports will have a contributing effect in causing,
or threatening to cause, material injury to the in-
dustry.
(D) SPECIAL RULES FOR AGRICULTURAL PRODUCTS.-
(i) The Commission shall not determine that there is
no material injury or threat of material injury to
United States producers of an agricultural commodity
merely because the prevailing market price is at or
above the minimum support price.
(ii) In the case of agricultural products, the Commis-
ion shall consider any increased burden on govern-
ment income or price support programs.
[(E) SPECIAL RULES.-For purposes of this paragraph-
[(i) NATURE OF SUBSIDY.-In determining whether
there is a threat of material injury, the Commission
shall consider such information as may be presented
to it by the administering authority as to the nature
of the subsidy (particularly as to whether the subsidy
is an export subsidy inconsistent with the Agreement)
provided by a foreign country and the effects likely to
be caused by the subsidy.
[(ii) STANDARD FOR DETERMINATION.-The presence
or absence of any factor which the Commission is re-
quired to evaluate under subparagraph (C) or (D) shall
not necessarily give decisive guidance with respect to
the determination by the Commission of material
injury.]
(E) STANDARD FOR DETERMINATION.-The presence or ab-
sence of any factor which the Commission is required to
evaluate under subparagraph (C) or (D) shall not necessarily
give decisive guidance with respect to the determination by
the Commission of material injury.
(F) THREAT OF MATERIAL INJURY.-
(i) IN GENERAL.-In determining whether there is a
threat of material injury, the Commission shall consid-
er, among other relevant economic factors-
(I) if a subsidy is involved, such information as
may be presented to it by the administering au-
thority as to the nature of the subsidy (particularly
 as to whether the subsidy is an export subsidy in-
consistent with the Agreement), and
(II) whether there is, based on any demonstrable
adverse trend regardingthe merchandise concerned
(such as an increase in production capacity in the
exporting country likely to result in a significant
increase in exports thereof to the United States, a
rapid increase in United States market penetration
and the likelihood that the penetration will in-
crease to an injurious level, the likelihood that im.
ports will enter at prices that will have a depress-
ing or suppressing effect on domestic prices, or a
substantial increase in inventories in the United
States), a probability that the merchandise (wheth-
er or not it is actually being imported at the time)
will be the cause of actual injury.
A determination may not be made on the basis of mere
supposition or conjecture, and sufficient information
must exist for concluding that the threat of injury is
real and that actual injury is imminent.
(ii) IF EXPORT TARGETING SUBSIDIES INVOLVED.-In
determining under clause (i) whether there is a threat
of material injury by reason of an export targetingsub-
sidy, the Commission shall consider-
(I) the effect of the practices constituting the sub-
sidy on the export competitiveness of the benefici-
ary of the subsidy, and
(II) the extent to which such practices are likely
to have a demonstrable adverse effect on the indus-
try with regard to costs and availabilityof capital,
outlays for research and development, and future
investment.

(9) INTERESTED PARTY.-The term "interested party" means-

(A) a foreign manufacture, producer, or exporter, or the
United States importer, of merchandise which is the sub-
ject of an investigation under this title or a trade or busin-
ess association a majority of the members of which are
importers of such merchandise,
(B) the government of a country in which such merchan-
dise is produced or manufactured,
(C) a manufacturer, producer, or wholesaler in the
United States of a like product,
(D) a certified union or recognized union or group of
workers which is representative of an industry engaged in
the manufacture, production, or wholesale in the United
States of a like product, [and]
(E) a trade or business association a majority of whose
members manufacture, produce, or wholesale a like prod-
uct in the United States[.]; and
 (F) an association, a majority of whose members is com-
posed of interested parties described in subparagraph(C),
(D), or (E) with respect to a like product.

SEC. 771A. UPSTREAM SUBSIDIES AND DOWNSTREAM DUMPING.

(a) UPSTREAM SUBSIDIES.-
(1) DEFINiTION.-The term "upstream subsidy" means any
action of a kind described or referred to in section 771(5)(A), (i),
(ii), (iii), or (vi) by the government of a country that-
(A) is paid or bestowed by that government with respect
to a product that is used in the manufacture or production
in that country of merchandise which is the subject of an
investigation under subtitile A or B,
(B) results in a price for the product for such use that is
lower than the generally available price of the product in
that country, and
(C) has a significant effect on the cost of manufacturing
or producing the merchandise.
In applying this definition, an association of 2 or more foreign
countries, political subdivisions, dependent territories,or posses-
sions of foreign countries organized into a customs union out-
side the United States shall be treated as being one country.
(2) ADJUSTMENT OF GENERALLY AVAILABLE PRICE IN CERTAIN
CIRCUMSTANCE.-If the administering authority decides that
the generally availableprice for a product in the country of the
manufacture, production, or export of the merchandise under
investigation is artifically depressed by reason of any subsidy,
or because of sales thereof in such country at less than fair
value, the administering authority shall adjust such generally
available price so as to offset such depression before applying
paragraph(1)(B).
(3) INCLUSION OF AMOUNT OF SUBSIDY.-If the administering
authority decides, during the course of an investigation under
subtitle A or B, that an upstream subsidy is being or has been
paid or bestowed regarding the merchandise under investiga-
tion, the administering authority shall include in the amount
of any countervailingduty or dumping duty imposed under that
subtitle on the merchandise an amount equal to the difference
between the prices referred to in paragraph(1)(B), adjusted, if
appropriate,for artificialdepression.
(b) DOWNSTREAM DUMPING.-
(1) DEFINITIoN.-Downstreamdumping occurs when-
(A) a product that is used in the manufacture or produc-
tion of merchandise subject to investigation under subtitle
A or B is purchased at a price that is below its foreign
market value (as determined under subtitle B without
regard to this subsection),
(B) that purchaseprice-
(i) is lower than the generally available price of the
product in the country of manufacture or production,
or
(ii) if the generally available price of the product in
the country of manufacture or production is artifically
 depressed by reason of any subsidy or other sales at
below foreign market value, is lower than the price at
which the product would be generally available in
such country but for such depression, and
(C) the difference between the foreign market value and
such purchase price has a significant effect on the cost of
manufacturingor producing the merchandise under investi-
gation.
(2) INCLUSION OF AMOUNT ATTRIBUTABLE TO DOWNSTREAM
DUMPING.-If the administering authority decides, during the
course of an investigation under subtitle A or B, that down.
stream dumping is occurring, or has occurred, with respect to
any product used in the manufacture or production of the mer.
chandise under investigation, the administering authority, in
calculating the amount of any countervailing duty or anti.
dumping duty on such merchandise, shall include an amount
equal to the difference between-
(A) the price referred to in paragraph(1)(A) at which the
product was purchased,and
(B) either-
(i) the generally available price, referred to in parm.
graph (1)(B)(i), of the product, or
(ii) the price, referred to in paragraph(1)(B)(ii), of the
product that would pertain but for artificial depres.
sion,
whichever is appropriate.
(c) SCOPE OF INQUIRY BY ADMINISTERING AUTHORITY-The admin-
istering authority is not required, in undertaking an investigation
under subtitle A or B, to inquire regarding the presence of an up-
stream subsidy, or of downstream dumping, beyond that stage in the
manufacture or production of the class or kind of merchandise that
immediately precedes the final manufacturing or production stage
before export to the United States, unless reasonably available infor-
mation indicates that such a subsidy is being or has been paid or
bestowed, or such dumping is occurringor has occurred, before such
immediately preceding stage and is having or has had a substantial
effect on the price of the merchandise.

SEC. 773. FOREIGN MARKET VALUE.

(a) DETERMINATION; FICTITIOUS MARKET; SALES AGENCIES.-***
* * * * * * *

[(f) AUTHORITY To USE SAMPLING TECHNIQUES AND To DISREGAD

INSIGNIFICANT ADJUSTMENTS.-For the purpose of determining for-
eign market value under this section, the administering authority
may-
[(1) use averaging or generally recognized sampling tech-
niques whenever a significant volume of sales is involved or a
significant number of adjustments to prices is required, and
(2) decline to take into account adjustments which are insig-
nificant in relation to the price or value of the merchandise.]
SEC. 774. HEARINGS.
[(a) INVESTIGATION HEARINGS.-The administering authority and
the Commission shall each hold a hearing in the course of an inves-
tigation upon the request of any party to the investigation before
making a final determination under section 705 or 735.]
(a) INVESTIGATION HEARINGS. -
(1) IN GENERAL.-Except as provided in paragraph(2), the ad-
ministering authority and the Commission shall each hold a
hearing in the course of an investigation upon the request of
any party to the investigation before making a final determina-
tion under section 705, 735, or 762(b).
(2) ExcEPTioN.-If investigations are initiated under subtitle
A and subtitle B regarding the same merchandise from the
same country within 6 months of each other (but before a final
determination is made in either investigation), the holding of a
hearing by the Commission in the course of one of the investiga-
tions shall be treated as compliance with paragraph(1) for both
investigations, unless the Commission considers that extraordi-
nary circumstances require that a hearing be held in the course
of each of the investigations. During any investigation regard-
ing which the holding of a hearing is waived under this para-
graph, the Commission shall allow any party to submit such
additional written comment as it considers relevant.

sec. 776. VERIFICATION OF INFORMATION.

[(a) GENERAL RuLE.-Except with respect to information the ver-
ification of which is waived under section 733(b)(2), the administer-
ing authority shall verify all information relied upon in making a
final determination in an investigation. In publishing such a deter-
mination, the administering authority shall report the methods
and procedures used to verify such information. If the administer-
ing authority is unable to verify the accuracy of the information
submitted, it shall use the best information available to it as the
basis for its determination, which may include the information sub-
mitted in support of the petition.]
(a) GENERAL RULE.-The administering authority shall verify all
information relied upon in making-
(1)a final determination in an investigation, and
(2)a revocation under section 751(c).
In publishing notice of any action referred to in paragraph(1) or (2),
the administering authority shall report the methods and proce-
dures used to verify such information. If the administeringauthor-
ity is unable to verify the accuracy of the information submitted, it
shall use the best information available to it as the basis for its
action, which may include, in actions referred to in paragraph(1),
the information submitted in support of the petition.

SEC. 777. ACCESS TO INFORMATION.

(a) INFORMATION GENERALLY MADE AVAILABLE.-
(1) PUBLIC INFORMATION FUNCTION.-There shall be estab-
lished a library of information relating to foreign subsidy prac-
tices and countervailing measures. Copies of material in the li-
 brary shall be made available to the public upon payment of
the costs of preparing such copies.
(2) PROGRESS OF INVESTIGATION REPORTS.-The administering
authority and the Commission shall from time to time upon re-
quest, inform the parties to an investigation of the progress of
that investigation.
(3) Ex PARTE MEETINGS.-The administering authority and
the Commission shall maintain a record of ex parte meetings
between-
(A) interested parties or other persons providing factual
information in connection with an investigation, and
(B) the person charged with making the determination,
and any person charged with making a final recommenda-
tion to that person, in connection with that investigation.
The record of the ex parte meeting shall include the identity of
the persons present at the meeting, the date, time, and place of
the meeting, and a summary of the matters discussed or sub-
mitted. The record of the ex parte meeting shall be included in
the record of the proceeding.
(4) SUMMARIES; NONCONFIDENTIAL SUBMISSIONS.-The admin-
istering authority and the Commission may disclose-
(A) any confidential information received in the course
of a proceeding if it is disclosed in a form which cannot be
associated with, or otherwise be used to identify, oper-
ations of a particular person, and
(B) any information submitted in connection with a pro-
ceeding which is not designated as confidential by the
person submitting it.
(b) CONFIDENTIAL INFORMATION.-
(1) CONFIDENTIALITY MAINTAINED.-Except as provided in
subsection (a)(4)(A) and subsection (c), information submitted to
the administering authority or the Commission which is desig-
nated as confidential by the person submitting it shall not be
disclosed to any person (other than an officer or employee of
the administering authority or the Commission who is directly
concerned with carrying out the investigation in connection
with which the information is [submitted)] submitted, or an
officer or employee of the United States Customs Service who is
directly involved in conducting an investigation regarding
fraud under this title) without the consent of the person sub-
mitting it. [The administering authority and the Commission
may require that information for which confidential treatment
is requested be accompanied by a non-confidential summary in
sufficient detail to permit a reasonable understanding of the
substance of the information submitted in confidence, or a
statement that the information is not susceptible to summary,
accompanied by a statement of the reasons in support of the
contention.] The administering authority and the Commission
shall require that information for which confidential treatment
is requested be accompanied by-
(A) a nonconfidential summary in sufficient detail to
permit a reasonable understanding of the substance of the
information submitted in confidence, or a statement that
the information is not susceptible to summary accompanied
 by a statement of the reasons in support of the contention,
and
(B) a statement permitting the administeringauthority to
release under administrativeprotective order, in accordance
with subsection (c), the information submitted in confi-
dence, or a statement that the information should not be re-
leased under administrativeprotective order.

(c) LIMITED DISCLOSURE OF CERTAIN CONFIDENTIAL INFORMATION

UNDER PROTECTIVE ORDER.-
(1) DISCLOSURE BY ADMINISTERING AUTHORITY OR COMMIS-
SION.-
(A) IN GENERAL.-Upon receipt of an application, before
or after receipt of the information requested, which de-
scribes with particularity the information requested and
sets forth the reasons for the request, the administering
authority and the Commission may make confidential in-
formation submitted by any other party to the investiga-
tion available under a protective order described in sub-
paragraph (B).
(B) PROTECTIVE ORDER.-The protective order under
which information is made available shall contain such re-
quirements as the administering authority or the Commis-
sion may determine by regulation to be appropriate except
that no distinction may be made between corporate counsel
and retained counsel. The administering authority and the
Commission shall provide by regulation for such sanctions
as the administering authority and the Commission deter-
mine to be appropriate, including disbarment from prac-
tice before the agency.
SEC. 777A. SAMPLING AND A VERA GING.
(a) GENERAL RULE.-For the purpose of determing United States
price or foreign market value under sections 772 and 773, and for
purposes of carrying out annual reviews under section 751, the ad-
ministering authority may-
(1) use averagingor generally recognized sampling techniques
whenever a significant volume of sales is involved or a signifi-
cant number of adjustments to prices is required, and
(2) decline to take into account adjustments which are insig-
nificant in relation to the price or value of the merchandise.
(b) SELECTION OP SAMPLES AND AVERAGEs.-The authority to
select appropriatesamples and averages shall rest exclusively with
the administeringauthority; but such samples and averages shall be
representative of the transactionsunder investigation.

TITLE 28, UNITED STATES CODE

 PART VI-PARTICULAR PROCEEDINGS
** * * * *

CHAPTER 169-COURT OF INTERNATIONAL

TRADE PROCEDURE

§ 2631. Persons entitled to commence a civil action

(a) * * *

(k) In this section-

(1) "interested party" has the meaning given such term in
section 771(9) of the Tariff Act of 1930; and
(2) "party-at-interest" means-
(A) a foreign manufacturer, producer, or exporter, or a
United States importer, of merchandise which is the sub-
ject of a final determination under section 305(b)(1) of the
Trade Agreements Act of 1979;
(B) a manufacturer, producer, or wholesaler in the
United States of a like product;
(C) United States members of a labor organization or
other association of workers whose members are employed
in the manufacture, production, or wholesale in the
United States of a like product, [and]
(D) a trade or business association a majority of whose
members manufacture, produce, or wholesale a like prod-
uct in the United States[.]; and
(E) an association composed of members who represent
parties-at-interest described in subparagraph (B), (C), or
(D)."

§ 2636. Time for commencement of action

(a) A civil action contesting the denial, in whole or in part, of a
protest under section 515 of the Tariff Act of 1930 is barred unless
commenced in accordance with the rules of the Court of Interna-
tional Trade-
(1) within one hundred and eighty days after the date of
mailing of notice of denial of a protest under section 515(a) of
such Act; or
(2) within one hundred and eighty days after the date of
denial of a protest by operation of law under the provisions of
section 515(b) of such Act.
(b) A civil action contesting the denial of a petition under section
516 of the Tariff Act of 1930 is barred unless commenced in accord-
ance with the rules of the Court of International Trade within
thirty days after the date of mailing of a notice pursuant to section
516(c) of such Act.
[(c) A civil action contesting a reviewable determination listed
insection 516A of the Tariff Act of 1930, other than a determina-
tion under section 703(b), 703(c), 733(b) or 733(c) of such Act, is
barred unless commenced in accordance with the rules of the Court
of International Trade within thirty days after the date of the Pub-
lication of such determination in the Federal Register.
[(dXl) A civil action contesting a determination by the adminis-
tering authority under section 703(c) or 733(c) of the Tariff Act of
1930 that a case is extraordinarily complicated is barred unless
commenced in accordance with the rules of the Court of Interna-
tional Trade within ten days after the date of the publication of
such determination in the Federal Register.
[(2) A civil action contesting a negative determination by the ad-
ministering authority under section 703(b) or 733(b) of the Tariff
Act of 1930 is barred unless commenced in accordance with the
rules of the Court of International Trade within ten days after the
date of the publication of such determination in the Federal Regis-
ter.]
(c) A civil action contesting a reviewable determination listed in
section 516A of the Tariff Act of 1930 is barred unless commenced
in accordance with the rules of the Court of International Trade
within the time specified in such section.
[(e)] (d) A civil action contesting a final determination of the
Secretary of Labor under section 223 of the Trade Act of 1974 or a
final determination of the Secretary of Commerce under section
251 or section 271 of such Act is barred unless commenced in ac-
cordance with the rules of the Court of International Trade within
sixty days after the date of notice of such determination.
[(f)] (e) A civil action contesting a final determination made
under section 305(b)(1) of the Trade Agreements Act of 1979 is
barred unless commenced in accordance with the rules of the Court
of International Trade within thirty days after the date of the pub-
lication of such determination in the Federal Register.
[(g)] (t) A civil action involving an application for the issuance
of an order making confidential information available under sec-
tion 777(cX2) of the Tariff Act of 1930 is barred unless commenced
in accordance with the rules of the Court of International Trade
within ten days after the date of the denial of the request for such
confidential information.
[(h)] (g) A civil action contesting the denial or revocation by the
Secretary of the Treasury of a customhouse broker's license under
section 641(a) of the Tariff Act of 1930 or the revocation or suspen-
sion by such Secretary of a customhouse broker's license under sec-
tion 641(b) of such Act is barred unless commenced in accordance
with the rules of the Court of International Trade within sixty
days after the date of the entry of the decision or order of such Sec-
retary.
[()] (h) A civil action of which the Court of International Trade
has jurisdiction under section 1581 of this title, other than an
action specified in subsections (a)-(h) of this section, is barred
unless commenced in accordance with the rules of the court within
two years after the cause of action first accrues.
[§ 2647. Precedence of cases
[The following civil actions in the Court of International Trade
shall be given precedence, in the following order, over other civil
actions pending before the court, and shall be assigned for hearing
at the earliest practicable date and expedited in every way:
[(1) First, a civil action involving the exclusion of perishable
merchandise or the redelivery of such merchandise.
[(2) Second, a civil action for the review of a determination
under section 516A(a)(1)(B)(i) or (ii) of the Tariff Act of 1930.
[(3) Third, a civil action commenced under section 515 of the
Tariff Act of 1930 involving the exclusion or redelivery of mer-
chandise.
[(4) Fourth, a civil action commenced under section 516 or
516A of the Tariff Act of 1930, other than a civil action de-
scribed in paragraph (2) of this section.]
§2647. Precedence of cases
The following civil actions in the Court of International Trade
shall be given precedence, in the following order, over other civil ac.
tions pending before the Court, and shall be assigned for hearingat
the earliest practicabledate and expedited in every way:
(1) First, a civil action involving the exclusion of perishable
merchandiseor the redelivery of such merchandise.
(2) Second, a civil action commenced under section 515 of the
Tariff Act of 1930 involving the exclusion or redelivery of mer-
chandise.
(3) Third, a civil action commenced under section 516 or 516A
of the Tariff Act of 1920.
 ADDITIONAL VIEWS
When first introduced, H.R. 4847 contained a provision that
would simplify the criteria under which dumping by non-market
economies would be determined. The provision would have replaced
the complex existing procedures whereby prices in a non-market,
or communist, country are compared to prices in a market country
with a similar level of economic development. The so-called "surro-
gate country" test is considered by the Administration, the private
sector and many in the Congress to be unpredictable and confus-
ing. In the past, it has not provided an effective remedy against
dumping by a non-market economy.
The changes in the law included in the bill as introduced would
have established a pricebreak test to determine whether dumping
was occurring. Under the new provisions, the administering au-
thority would determine the fair market value of merchandise ex-
ported to the United States on the basis of the "lowest free market
price" of like articles sold in this country if that price were a com-
petitive free market price. The new test would be an alternative to
the "surrogate country" test in current law and would provide a
more readily apparent benchmark of whether dumping exists, prior
to a determination of whether such dumping is the cause of materi-
al injury to a U.S. industry.
The lowest free-market price would be defined as the lowest av-
erage price, adjusted to disregard the lowest 10 percent of the aver-
age, charged by all U.S. producers and other market economy coun-
tries for like articles in the U.S. market. This price would be ad-
justed to take into account any price-depressing effect of imports of
the dumped merchandise by the non-market economy country as
well as for differences in quantity, level of trade, duties or other
factors required to ensure comparability. Also, the benchmark
price must be a competitive free market price and could not be
used if there were only a very few producers in the market who
could effectively control prices. Finally, prices offered by free
market producers which have been the subject of a preliminary or
final dumping or subsidy determination would be excluded.
The administering authority could continue to use the present
"surrogate country' test if it determined that the lowest free-
market price is not a competitive price by virtue of a limited
number of free market suppliers of the merchandise in the U.S.
market. The surrogate country test would remain available as an
option in other circumstances, if a truly comparable surrogate
country exists. This would allow those who have been satisfied with
how existing law has worked in particular instances a chance to
argue, on a case-by-case basis, that a surrogate country test would
provide more adequate relief.
The provision on non-market economy-pricing was dropped from
the bill when arguments arose over whether the pricebreak should
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be the lowest free market price as described above or some other
price test. Some suggested a higher threshold, such as the average
free market price, should be used instead. Two requirements must
be met before dumping can be proven and acted against. One is
that below fair market value pricing is occurring, and secondly is
that such activity is causing material injury. Without a determina.
tion of injury, dumping is only "technical" and cannot be offset
under GATT rules or under U.S. law. Setting the average U.S.
price as the threshold presumes that if a non-market country
prices above the level of half the sellers in the U.S., any dumping
that exists would be injurious. It is unlikely that this would be the
case, and the uncertainty of existing law would not be resolved.
This is another example of an attempt to simplify and clarify ex-
isting law, and to make our trade laws work to address legitimate
problems that became entangled in protectionist solutions. Other
sectors of the U.S. economy, of course, have to pay for such protec.
tionism. The result we have seen in H.R. 4784 is that amendments
are approved that further complicate the trade statutes, violate our
international obligations and threaten our export industries-or ef-
forts to resolve a problem, such as non-market economy pricing,
are dropped altogether.
We support the provisions as originally included in H.R. 4784.
They are fair and, with the 10 percent exclusion, prevent very low
wage countries from distorting the lowest free market price. We
hope that at a later time, either in separate legislation or in H.R.
4784, should the problems with the bill be resolved and it gain
wider support, a simplification of existing rules with respect to
non-market economy pricing can be achieved.
BiLL ARCHER.
BiLL GRADISON.
BARBER B. CONABLE.
BILL FRENZEL.
 DISSENTING VIEWS
When the process of developing this legislation began, we had
hoped to support needed changes in the countervailing duty and
dumping laws that would address new problems in a changing mar-
ketplace and would simplify and lessen the expense of seeking
relief under these laws. Our goal also was that these changes be
consistent with the GATT and the international obligations of the
U.S. so as not to jeopardize important exporting interests or to un-
dermine this country's trade policy objectives. We find we cannot
support H.R. 4784 as reported. The goals we sought initially have
been compromised by provisions that further complicate the stat-
utes and erode their effectiveness. Also, the guidelines of adherence
to the letter and the spirit of the GATT, strongly espoused in the
beginning, have not been met. The Administration also strongly op-
poses H.R. 4784.
H.R. 4784 began out of a growing concern on the part of U.S. in-
dustry, shared by the Administration and many in the Congress,
that U.S. trade laws were too cumbersome and costly and did not
adequately address new forms of government intervention in the
marketplace. These deficiencies in the law created a hardship for
many U.S. businesses that were hit by unfair import competition
yet were deterred from using expensive and uncertain statutory
procedures. However, the reformers recognized trade as a growing
part of this country's GNP with important export interests that
also needed to be protected. Therefore, we should avoid developing
rules and procedures that we would not want applied to our own
firms, and we should not depart from the benefits and obligations
already agreed to under the GATT. In our view H.R. 4784, al-
though making some procedural improvements in the CVD and
dumping laws, is weighted down with additional complicated and
arbitrary definitions and procedures that endanger our exporting
interests and render the law less effective. Our specific objections
are outlined below.
TARGETING

The provisions of the bill that define targeting as an illegal prac-

tice, and were designed to cover newer forms of subsidization, have
become the weak link of the bill. A panoply of government prac-
tices will be labeled "targeting", making the definition so broad
that it covers legitimate forms of government behavior, including
many programs of the U.S. government. The provisions are incon-
sistent with the GATT and the Subsidies Code and represent a uni-
lateral departure by the U.S. from its international obligations.
Rather than providing additional protection for U.S. firms against
unfair practices, these provisions will subject U.S. industries to re-
taliation either directly through GATT challenges to our law or in-
(89)
directly through the implementation of "mirror" legislation
abroad. The jerrymandered nature of the targeting definition, cou-
pled with the complicated and subjective method of calculating the
offsetting duty, can only lead to endless court challenges and great.
er uncertainty in our trade laws.
H.R. 4784 defines targeting as "any government plan or scheme
consisting of coordinated actions . . . the effect of which is to assist
the beneficiary to become more effective in the export of any class
or kind of merchandise." All illegal subsidies, whether existing
singly or as part of a government "scheme or plan", can be coun-
tervailed under existing law. However, many legitimate govern-
ment policies have the effect of benefiting export competitiveness
yet would not be recognized as unfair subsidies under thd GATT.
Our space program, for example, has the effect of aiding U.S. ex-
ports of computers, semi-conductors, and satellites. Defense pro-
curement has the effect of benefiting U.S. exports of aircraft and
aerospace products. Many agriculture programs have the effect,
but not the purpose, of aiding the competitiveness of U.S. agricul-
ture exports. If these provisions were adopted by our trading part-
ners, all of these industries could be subject to countervailing
duties.
The goal of the targeting provisions was to address foreign gov-
ernment practices aimed at taking over or making substantial in-
roads in particular sectors of the U.S. market. As currently draft-
ed, however, the purpose or design of government activity is ig-
nored and the effect of the practices becomes the test. The risk to
U.S. industries is compounded by the examples of targeting activity
provided in the bill. Activity such as assistance to joint ventures,
investment restrictions, research and development coordination
and relaxation of antitrust rules are practiced by the U.S. yet we
would not want them labeled as illegal subsidies. The U.S. adminis-
ters various antitrust exemptions, such as those allowed export as-
sociations formed by U.S. firms under certain conditions. The Jus-
tice Department regularly grants antitrust exemptions to joint re-
search and development ventures formed by U.S. companies. Sever-
al such R&D joint ventures were approved recently for the comput-
er industry. With such broad definitions, and no regard for the pur-
poses or design of the government activity, it is almost impossible
to distinguish government practices that constitute "targeting"
from those practices that do not.
Some of the practices defined as targeting, such as protection of
home markets and domestic content and export performance re-
quirements, clearly are not subsidies under the Subsidies Code and
should not be addressed under the countervailing duty law. These
practices may be illegal and inconsistent with the GATT, but there
are separate mechanisms to address these problems. Indeed, the
U.S. recently won a GATT case against Canadian domestic content
and performance requirements. To unilaterally define certain prac-
tices as subsidies, and to countervail against them, violates the
letter and the spirit of the GATT. The requirement in the bill that,
in the case of targeting, the countervailing duty offset "the full
benefit of the subsidy to the beneficiary over the period during
which the subsidy has an effect" also contradicts the GATT. Article
VI of the GATT clearly states that no countervailing duty be levied
"in excess of an amount equal to the estimated bounty or subsidy
determined to have been granted. .. "
The separate standard for calculating a targeting subsidy (other
subsidy practices require the net subsidy to be offset) implies that a
higher margin of offset is merited for one kind of subsidy compared
to others. Also, realistic methods of calculating the "full benefit of
the subsidy" are not available. The Commercie Department has
stated that it is not aware of any rational way to quantify the eco-
nomic benefits of home market protection, antitrust exemptions, or
restrictions on foreign investments, especially when these practices
are integrated into broad domestic policies and occur in different
market conditions. The problem is compounded because the law re-
quires that the subsidy be allocated to the price of the imported
products. In the judgment of the Commerce Department, it would
be impossible to quantify the price advantage of so-called targeting
practices in a fair, consistent and realistic manner. Determinations
would be inherently speculative and arbitrary, leading to increased
legal challenges. This further uncertainty is wholly contrary to the
original purposes of the bill.
NATURAL RESOURCES

The natural resources provisions of H.R. 4784 represent a major

departure from longstanding U.S. and international practice re-
garding the definition of a subsidy and ignores the clear recogni-
tion in the GATT that some subsidies can be used legitimately by
governments "to promote important objectives of social and eco-
nomic policy". The provision defines a natural resource subsidy as
the difference between the domestic price and the export price or
the fair market value, if the export price is distorted. In effect, the
provision defines as a subsidy the comparative advantage certain
countries have in natural gas, petroleum and other natural re-
sources. The provisions cannot be defended under the GATT, and
would put U.S. export industries at risk of retaliation. Without
export controls, the energy resources of energy rich countries
would be drained. Even the U.S., an energy poor country, licenses
its natural gas and petroleum imports and, to a certain degree, con-
trols such exports. Control of domestic prices has long been used by
some governments in order to assure public benefit from either
abundant or limited supplies of natural resources.
Under U.S. law, and international practice, only subsidies that
give a special advantage to "a specific enterprise or industry, or
group of enterprises of industries" would be considered an illegal
practice. This concept is an important one in the world trading
community and the U.S. should not abandon it unilaterally. Since
all governments undertake numerous measures which alter eco-
nomic conditions, it has become a fundamental principle of interna-
tional and U.S. law that government programs which are generally
available-such as irrigation projects, high quality transportation
systems, investment tax credits, capital cost recovery allowances,
rural electrification programs and employee benefit programs-are
not considered to be illegal subsidies under the GATT even though
such activities could be said to benefit companies by indirectly low-
ering their cost of production. The U.S. courts have confirmed this
by ruling that defining generally available benefits as a bounty or
grant would "lead to an absurd result".
If our trading partners follow our lead and enact similar natural
resource provisions, the U.S. has much to lose besides the princi.
ples of comparative advantage and general availability. In practical
terms, U.S. industries benefit from government energy policies.
The U.S. continues to regulate natural gas, and the European Com-
munity has argued that textiles exported to Europe benefit from
lower U.S. natural gas prices. U.S. textiles and petrochemicals,
which benefit from natural gas controls, would become potential
targets for foreign countervailing duties. Other U.S. industries ben-
efit from government control of natural resources: Western agricul.
ture products benefit from government irrigation projects, while in.
dustries in the Tennessee Valley and the Pacific Northwest benefit
from government electricity. In addition, U.S. petrochemical firms
have significant investment in foreign countries with abundant hy-
drocarbon natural resources. These firms would be severely dam-
aged if denied access in the future to the U.S. market based on ar-
bitrary and discriminatory subsidy criteria. Also, U.S. farmers
would be deprived of lower cost imported fertilizer.
Much discussion has centered on the "unfair" domestic price for
Canadian and Mexican natural gas and petroleum when compared
to the higher export price set by these countries and higher prices
in the U.S. In fact, the U.S. has contributed significantly to the es-
tablishment of these export prices, and prices in the U.S. for natu-
ral gas vary widely. Other factors, such as termination of low-
priced contracts, location in market areas easily accessible to im-
ports, or government programs such as the PIK (payment-in-kind)
agriculture program, have effected the competitiveness of natural
gas users in the U.S. rather than any unfair trade practice abroad.
Past U.S. policies, and those of Canada and Mexico, should show
the degree to which the export price, or even a controlled domestic
price, is separate from any domestic subsidy that may be given to
users of the natural resource. Accepting the natural resource provi-
sion in H.R. 4784 places our own exports at risk, makes certain
U.S. government practices with respect to natural resources incon-
sistent with U.S. trade laws and penalizes a specific class of U.S.
investments abroad.
DOWNSTREAM DUMPING

The provisions on downstream dumping in H.R. 4784 clearly are

GATT illegal, although proponents of the bill have pledged to
adhere to the letter and the spirit of the GATT and of our internal
tional obligations. Article VI of the GATT defines dumping in spe-
cific terms as sales at less than normal value of a like product. The
product is dumped if sold at less than fair value, whether or not it
can be attributed to a below cost component; likewise, a product is
not dumped if it is sold at or above the fair market value, whether
or not its components are below cost or are subsidized. Applying a
dumping test to components of a product that is the subject of a
separate dumping or subsidy complaint clearly violates the "like
product" requirement. Article VI also prohibits subjecting imports
to both countervailing and dumping duties to compensate for the
same situation. Although the dumping margin is translated to a
subsidy calculation under the bill, in fact the product is subjected
to double jeopardy prohibited by Article VI.
The downstream dumping provisions would be impossible to ad-
minister in practice in a fair and realistic way. Simultaneous inves-
tigations of allegedly dumped materials and components would
have to be conducted during the dumping or subsidy investigation
associated with the initial complaint. The effect would be to intro-
duce additional complexity and uncertainty to investigations al-
ready subject to stringent statutory time limits. A dumping case is
an allegation by one firm against the pricing practices of another
firm. A third firm supplying components would not be liable for
antidumping duties and would have no incentive to provide infor-
mation on its own practices. The problem becomes overwhelming if
the component company is located in a third country. It will be im-
possible to avoid highly arbitrary calculations that have no basis in
economic reality. Again, we are moving backwards in our effort to
simplify the law, avoid costly litigation and provide some degree of
certainty as to what unfair practices are and what remedy is likely
to result from our trade laws.
MONITORING IMPORTS

Section 104 requires both the Commerce Department and the

International Trade Commission to monitor imports of a product
from several different countries where injury to the domestic in-
dustry from dumping practices of one country has been established
within the previous two years. If a firm alleges that dumping is oc-
curring from any other country that supplies the product, although
the allegation will not have been substantiated by an investigation,
then two agencies must devote their resources to monitoring the
product's price, foreign market value, and level of growth of im-
ports. The only other choice the Administration has is to self-initi-
ate a dumping investigation. Although there is an initial time limit
on monitoring activity of one year in each case, any number of fur-
ther requests can occur within a two year period and there is no
mechanism for the Administration to distinguish between frivolous
and justifiable complaints.
There currently are more than 90 dumping orders in effect cover-
ing about 80 separate products. This provision could result in a tre-
mendous administrative burden on two agencies that would per-
form the duplicative task of monitoring a host of different products
from a variety of countries for differing periods of time. The trade
dampening effect of such activity is obvious. Although the problem
of simultaneous dumping may be a legitimate one, section 104 pro-
vides no reasonable solution. Furthermore, neither the GATT nor
U.S. trade law provides a presumption of guilt on the part of one
country because another country has been found to be dumping.
This section leans heavily in that direction. A web of bureaucratic
activity will be created with very little apparent benefit. Such per-
vasive monitoring will have a chilling effect on trade, but U.S.
firms will still have to develop their case and prove injury (even
though the government selfinitiates) before relief can be granted.
This section merely adds to the confusion of our trade laws.
 CUMULATION AND THREAT OF INJURY

Under existing law, the ITC cumulates imports from two or more
countries in an injury investigation, on a case by case basis, if
there is a reasonable indication that imports from each country
have contributed to the injury. Initially the bill intended to reaf.
firm the existing practice of several Commissioners, and to put the
requirement in the statute so that all Commissioners would behave
consistently. However, an amendment was agreed to in Committee
that would require cumulation of imports that compete with each
other or with the like product in the U.S. regardless of the con-
tributory effect with respect to injury or the proximity in time of
the imports. This is inconsistent with GATT requirements that sub-
sidized or dumped products be injurious. The provision of the bill
creates a false injury by lumping imports together regardless of
whether there is any indication imports from a particular country
are contributing to the injury, and penalizes countries that have a
low volume of imports to our market.
The bill provides separate criteria for threat of material injury
in the case of "targeting" subsidies. This again suggests that tar-
geting subsidies, as opposed to other forms of subsidies, should
result in a greater or more easily obtained remedy. Basing threat
of injury on the mere effect of a practice on an industry's export
competitiveness or on an early prediction of the effect of a practice
on "costs and availability of capital, outlays for research and devel-
opment, and future investment" is highly speculative. Such predic-
tions would have to occur prior to knowing whether a practice can
even be defined as an illegal subsidy practice, let alone whether
any future benefit would constitute a threat of injury. Improving
export competitiveness or competitiveness in general is not illegal
under the GATT. The separate threat provisions would invite de-
terminations that are purely specultive rather than real and immi-
nent, and would be contrary to GATT requirements that injury or
threat thereof be real and identifiable.
SUMMARY

The problems with the bill outlined above make HR 4784 far dif-
ferent from the expected legislation designed to simplify and im-
prove the effectiveness of our countervailing duty laws. The bill
also is not consistent with the letter and spirit of the GATT and,
therefore, leaves our export industries vulnerable to retaliation or
equally faulty "mirror" legislation. The goal of achieving needed
changes in our trade laws should not be reached at the expense of
other important U.S. trade and economic interests or by setting
aside, even partially, our international obligations. The Adminis-
tration strongly opposes this legislation as well. We urge our col-
leagues to join us in opposing HR 4784.
BARBER B. CONABLE, Jr.
BILL ARCHER.
PHILIP M. CRANE.
BILL FRENZEL.
BILL GRADISON.