Import Administration is watchdog for several bilateral agreements - International Trade Administration's Import Administration

Business America, Nov 5, 1990

Import Administration is Watchdog For Several Bilateral Agreements

One year after a dumping or countervailing duty is established and Customs is collecting duties on the imported product, any party involved in the investigation can request a review of the case. The purpose of the review is to establish the actual dumping margin or subsidy rate for a certain period, as opposed to the estimated rate established during the investigation. It is the Import Administration's Office of Compliance that conducts these reviews.

If, at the end of the review, the actual margin differs from the original estimated margin, the estimated duties paid by the importer will be adjusted to reflect the actual duty paid. This can result in more duties being owed to, or a refund being paid to, the importer by U.S. Customs.

Aside from overseeing administrative reviews of outstanding antidumping and countervailing duty orders, the Office of Compliance administers bilateral government agreements on machine tools, semiconductors, steel, and lumber. Each of these agreements originated as a result of an antidumping or countervailing duty investigation. Below is a description of these bilateral agreements and their current status.

Machine Tools

In 1986, in response to an affirmative decision by the Department of Commerce that imports of certain machine tools represented a threat to U.S. national security, President Reagan instituted a program to revitalize the U.S. machine tool industry. Under this initiative, a five-year period of import relief (January 1987-December 1991) was established to enable the domestic industry to restore profitability and to finance investment in product development and modernization. Voluntary restraint agreements (VRAs) were negotiated with Japan and Taiwan to fix market shares for certain machine tools, and other major suppliers were requested not to increase machine tool exports to the United States above 1985 levels.

In May 1990, officials from Japan's Ministry of International Trade and Industry (MITI) and the U.S. Department of Commerce met to conclude the third-year review of the Arrangement. The result was a U.S.-Japan Cooperation Program on machine tools which complements the efforts of the VRA and provides additional benefits to the U.S. industry through the end of the VRA period.

Included in the Cooperation Plan are measures to promote U.S. machine tool exports to Japan, to increase sales opportunities to Japanese transplant companies, and to expand the machine tool market. The plan also provides for industry-to-industry exchanges, and MITI has agreed to explore other means of increasing imports of U.S. machine tools and machine tool components to Japan.

As part of the Cooperation Plan, the Department of Commerce and MITI co-sponsored a Procurement Conference, and MITI sponsored a Buying Mission, at the International Machine Show held in Chicago. The next event scheduled under the auspices of the Cooperation Plan was a U.S. Trade Mission to Japan which was held in conjunction with the Japanese International Machine Tool Show (JIMTOF) from Oct. 31-Nov. 2 in Osaka. Through these efforts, both the Commerce Department and MITI are optimistic that the impression of closed Japanese markets can be overcome.

For information regarding the Cooperation Plan or other machine tool programs, contact Holly Kuga, Office of Agreements Compliance, U.S. Department of Commerce, Washington, D.C. 20230; tel. (202) 377-3793.

Semiconductors

The Office of Compliance administers the antidumping provisions of the U.S.-Japan Semiconductor Trade Arrangement and two suspension agreements covering semiconductors from Japan. To enforce the antidumping provisions of the Arrangement, the Office monitors MITI's implementation of measures fulfilling the Japanese government's commitment to prevent dumping in the United States and in third country markets of a variety of semiconductor products. Analysts prepare for and participate in government-to-government consultations to ensure that the Arrangement's objectives are being achieved.

In administering the suspension agreements, the Office's responsibilities include the quarterly calculation of foreign market values (FMVs) for Japanese produced dynamic random access memories (DRAMs) and erasable programmable read only memories (EPROMs) based on verified Japanese company-specific cost of production data. FMVs are used to ensure that DRAMs and EPROMs are sold in the United States at fair value.

On Sept. 14, 1990, the Commerce Department initiated an administrative review of the suspension agreements based on the signatories' request to terminate the agreements. These reviews will be conducted over the coming year and will be completed by Aug. 31, 1991.

For information about the U.S.-Japan Semi-conductor Trade Arrangement, contact Roland MacDonald, Office of Antidumping Compliance, U.S. Department of Commerce, 14th and Constitution Ave., N.W., Washington, D.C. 20230; tel. (202) 377-2104.

Steel Voluntary Restraint Agreements