by Fredrick P. Waite, AWPA General Counsel Once an antidumping duty order is issued, there are very few ways to modify or eliminate it. Annual administrative reviews allow a foreign producer to attempt to lower its "dumping" margin or reduce it to zero, but this does not affect the order which remains in place. After an antidumping order has been in effect for five years, and every five years thereafter, the US Government conducts a "sunset review" to determine whether revocation of the order would be likely to lead to continuation or recurrence of dumping. A successful sunset review means the end of the antidumping order. The only other means to eliminate an antidumping order is through a special administrative proceeding known as a "changed circumstances" review. A "changed circumstances" review can be initiated by either the Department of Commerce or the International Trade Commission. The Commission is the proper agency to consider "changed circumstances" allegations relating to significant changes in the domestic industry or in market conditions. According to the antidumping and countervailing duty laws, only an "interested party" can request a "changed circumstances" review. Eligible parties in the case of wire rod include the foreign rod producers subject to the orders, US importers of wire rod, and US rod producers and their unions. Trade associations of industrial users, like the AWPA, do not have standing to request a "changed circumstances" review. Requesting parties must follow a two-step process. First, in order for the Commission to institute a review, the requesting party must show "changed circumstances sufficient to warrant a review." After receiving the request, the Commission will seek public comments which normally are due within 30 days. Within 30 days after this public comment period, the Commission must determine whether or not to formally institute an investigation and publish in the Federal Register its decision either to institute the review or to dismiss the request. In considering whether to institute a "changed circumstances" review, the Commission will not institute such an investigation unless "it is persuaded there is sufficient information demonstrating: (1) that there are significant changed circumstances from those in existence at the time of the original investigations; (2) that those changed circumstances are not the natural and direct result of the imposition of the antidumping and/or countervailing duty orders, and; (3) that the changed circumstances, allegedly indicating that revocation of the order would not be likely to lead to continuation or recurrence of material injury to the domestic industry, warrant a full investigation." Unfortunately, neither the trade laws nor the Commission's regulations identify any specific factors which would constitute sufficient "changed circumstances" to warrant a review. The Commission has rejected review requests in the past which were based on the following alleged "changed circumstances:" (1) The foreign producer acquired a US producer and so it had no incentive to injure the domestic industry; (2) Competition between domestic and imported sources had declined due to market segmentation; (3) Demand had increased, particularly on one end-use segment of the market; (4) The overall economic condition of the domestic industry had improved since the original investigation; (5) The domestic industry's capacity was substantially below overall consumption with the result that the domestic industry could not satisfy demand; (6) There was an impending short supply situation for one type of product under order; (7) Subject imports had been replaced by nonsubject imports in the market; (8) Restructuring/privatization of the industry outside the United States had occurred; and (9) There had been a sharp decline in the US dollar against other currencies. When the Commission is persuaded that there are sufficient changed circumstances to warrant a review, it will institute an investigation to determine whether revocation of the antidumping and/or countervailing duty order is "likely to lead to continuation or recurrence of material injury" to the domestic industry. This is the same standard that the Commission applies in five-year ("sunset") reviews. As in a sunset review, the Commission must consider in a "changed circumstances" review the likely volume, price effect, and impact of imports on the domestic industry if the order is revoked. The Commission is also required to take into account its prior injury determination, whether any improvement in the domestic industry is related to the order, and whether the domestic industry is vulnerable to injury if the order is revoked. Like a dumping case, the Commission must evaluate all of these factors within the context of the business cycle and conditions of competition that are distinctive to the industry. Once a review begins, the process is similar to an AD or CVD injury investigation: parties, including industrial users, must enter an appearance; an Administrative Protective Order (APO) will be established; a hearing will be held and prehearing and posthearing briefs will be submitted; a staff report will be prepared; final comments will be accepted; the Commission will hold a public meeting at which time it will vote to either continue or revoke the order(s); and the views of the Commission will be published in its final report. The Commission must complete its investigation within 120 days from the date of its institution notice in the Federal Register. Thus, the process can take as little as 180 days or six (6) months from the time that the Commission receives a proper and sufficient request until the time that the Commission reaches its final decision. A successful "changed circumstances" review will result in revocation of the order under review. The Commission has completed fewer than a dozen "changed circumstances" reviews. In 1998, the Commission agreed to conduct a "changed circumstances" review of the orders against titanium sponge from Japan, Kazakhstan, Russia and Ukraine and decided to revoke all four orders. By contrast, the Commission has declined to formally initiate reviews most recently in cases involving cold-rolled steel products from Germany and the Netherlands (1996), hand tools from China (1997), electrolytic manganese dioxide from Greece and Japan (1998), silicon metal from Argentina, Brazil and China (1998), and gray portland cement and cement clinker from Mexico (2001). In the successful review of the orders against titanium sponge, the alleged changed circumstances included: (1) a significant decline in global capacity; (2) that fact that the domestic producers had virtually no open market sales; and (3) the fact that apparent consumption had doubled and demand was forecast to remain strong. The Commission found all of these factors to be changed circumstances, while at the same time noting that supply contracts for titanium sponge were typically 5-10 years in duration which promoted market stability. Because there has been only one successful "changed circumstances" case in the last ten years, it is difficult to predict whether a successful case on wire rod would result in the revocation of all outstanding orders or just the orders against certain countries. The result of the titanium sponge case was the total revocation of the orders against all four countries. Perhaps the closest analogy to a "changed circumstances" review is a "sunset" review. The experience of "sunset" reviews to date is that the Commission generally reaches the same conclusion for all of the countries subject to the review, although there have been reviews where the Commission decided to revoke the orders against some countries but not others.
 American Wire Producers Association |
