Reviewing ITC Sunsets

The 1994 U.S. Uruguay Round Agreements Act ratified the international trade negotiations that changed the General Agreement on Tariffs and Trade (GATT) into the World Trade Organization (WTO).  Among the significant changes that came out of this act and new trade agreement was the requirement that countries conduct periodic reviews, at least every five years, on existing antidumping and countervailing duty orders.  As a result, the DOC and ITC conduct five year reviews on all orders to determine whether revocation would likely lead to the continuation or recurrence of dumping or subsidies and material injury.  If the DOC and ITC both issue affirmative determinations, the order remains in effect for another five years at which point another review will take place.  The order expires if either the DOC or ITC make a negative determination.

Since these changes were implemented in 1998, the ITC has conducted hundreds of Sunset Reviews including first, second, and third reviews.  As shown in the table below, a high percentage of reviews have resulted in the continuation of anti-dumping and countervailing duty orders.  In total 77.8 percent of all reviews have gone affirmative while only 22.2 percent have gone negative.  With each subsequent review cycle, the percentage of cases going affirmative has increased; specifically, 75.4 percent, 78.6 percent, and 89.2 percent of reviews have gone affirmative in the first, second, and third reviews of cases respectively.  This trend runs contrary to the common perception that older orders have a higher probability of going negative, as Commissioners may view conditions that existed in the original determination less likely to still exist.

A more interesting approach is to break ITC Sunset Review determinations down by expedited versus full reviews.  In expedited reviews, where only one side presents arguments, the ITC has issued an affirmative decision in almost every case.  When termination of the order is contested, the ITC conducts a full review.   In contrast to the results of expedited reviews, as shown in the graph below, in a full review, the ITC is far more likely to issue a negative determination.  Thus, when parties have used the Sunset procedure to argue against continuation of the order, the ITC has decided to eliminate the order in nearly one third of all cases.  This trend is also relatively constant throughout first, second, and third reviews, indicating that the strong increase in affirmative determinations in all ITC third Sunset Reviews, shown in the table above, is primarily a result of increased expedited reviews and not  changing factors in the commissioners determinations.

Capital Trade Inc. tracks and compiles data from all ITC Sunset Review votes from 1998 until the present.  Variables tracked include the following:

·       Affirmative / Negative Determinations

·       Voting Records of Current and Past ITC Commissioners

·       1st, 2nd, and 3rd Review Results

·       Expedited / Full Review Results

·       Product Results

·       Industry Results

·       Country Results

·       Year Results