FTC Staff Comment Before the OECD Committee on Consumer Policy Concerning Trade Policy and the Consumer

Bureau of Competition
FEDERAL TRADE COMMISSION
WASHINGTON, DC 20580
BY HAND
March 	28,
Mr. 	Gilbert 	B. 	Kaplan
Deputy 	Assist~nt Secretary 	for
Import 	Administration
Room 	B-099
U.S. 	Department 	of 	Commerce
14th 	Street 	and 	Constitution 	Avenue, 	N.W.
Washington, 	D.C. 	20230
1986 	.J
:-.
c: .•
--
o
Re: 	Dynamic 	random 	access 	memory 	semiconductors 	of 	256
kilobits 	and 	above
De a r 	:Yl r. 	Ka p 1 an:
The 	Fed era 1 Tr a deComn iss ion 	(It Comm iss ion It) 	wi she s 	to
participate 	in 	the 	public 	hearing 	on 	April 	18 	in 	the 	antidumping
investigation 	of 	dynamic 	random 	access 	memory 	semiconductors 	of
256 	kilobits 	and 	above 	from 	Japan. 	Dr. 	Sarah 	Goodfriend 	and 	I
will 	be 	participating 	on 	behalf 	of 	the 	Corrrnission 	and 	will
discuss 	whether 	sales 	in 	Japan 	are 	at 	prices 	which 	permit
recovery 	of 	all 	costs 	within 	a 	reasonable 	period 	of 	time 	in 	the
normal 	course 	of 	trade. 	The 	Commission 	enforces 	various 	statutes
aimed 	at 	promoting 	competition 	in 	United 	States 	corrrnerce 	to 	the
benefit 	of 	United 	States 	consumers 	and 	has 	expertise 	in 	assessing
the 	~ompetitive significance 	of 	a 	decline 	in 	prices.
Sincerely,
~_.~
Benjamin 	Cohen
Attorney
Division 	of 	International
Antitrust
Bureau 	of 	Competition
Federal 	Trade 	Commission
Washington, 	D.C. 	20580
(202) 	634-4784
. ':~ .. ' .

-.
COMMISSION
APPROVED
TRADE 	POLICY AND 	THE CONSUMER:
THE 	CONSUMER ADVOCACY 	ROLE 	OF
THE 	FTC 	IN 	TRADE 	LAW PROCEEDINGS*
Carol 	T. 	Crawford
Director
Bureau 	of 	Consumer 	Protection
Federal 	Trade 	Commission
November 	28, 	1984
before 	the
Organization 	For 	Economic 	Cooperation 	and 	Development
Committee 	on 	Consumer 	Policy
"Symposium on 	Consumer 	Policy 	and 	International 	Trade"
*The 	opinions 	expressed 	are 	solely 	those 	of 	the 	Director 	of 	the
Bureau 	of 	Consumer 	Protection 	of 	the 	Federal 	Trade 	Commission 	and
do 	not 	represent 	the 	views 	of 	the 	Commission 	itself 	or 	any
individual 	Commissioner, 	however, 	the 	Commission 	has 	voted 	to
authorize 	the 	presentation 	of 	this 	paper.

.. ,'
~..
Introduction
This 	paper 	deals 	with 	"Trade 	Policy 	and 	the 	Consumer" 	and
more 	specifically 	the 	role 	of 	the 	Federal 	Trade 	Commission 	(the
"Commission" 	or 	the 	"FTC") 	in 	recent 	years 	in 	attempting 	to
identify 	and 	define 	the 	real 	"social 	costs" 	to 	the 	consumer 	and
the 	free-world 	economy 	of 	protectionist 	trade 	law 	measures. 	This
is 	not 	a 	new 	area 	of 	concern 	for 	the 	OECD; 	as 	early 	as 	1960, 	this
organization 	recognized 	the 	economic 	dangers 	inherent 	in 	barriers
to 	free 	trade. 	At 	that 	time, 	the 	OECD 	countries 	stated 	in 	the
OECD's 	1960 	Convention 	that 	they 	agreed 	"to 	pursue 	their 	efforts
to 	reduce 	or 	abolish 	obstacles 	to 	the 	exchange 	of 	goods 	and
services 	and 	current 	payments 	and 	maintain 	and 	extend 	the
liberalisation 	of 	capital 	movements." 	Twenty-four 	years 	later,
this 	concern 	remains, 	for 	as 	recently 	as 	last 	year, 	in 	a
communique 	following 	the 	1983 	Ministerial 	Council 	Meetings, 	the
OECD 	Ministers 	stated, 	in 	pertinent 	part, 	that
"They 	••• 	agreed 	that 	the 	economic 	recovery, 	as 	it
proceeds, 	provides 	favourable 	conditions 	which 	Member
countries 	should 	use, 	individually 	and 	collectively, 	to
reverse 	protectionist 	trends 	and 	to 	relax 	and 	dismantle
progressively 	trade 	restrictions 	and 	trade 	6istorting
domestic 	measures, 	particularly 	those 	introduced 	over 	the
recent 	period 	of 	poor 	growth 	performance."l
1 	C(83)77; 	paragraph 	14, 	as 	cited 	in 	Report 	on 	Issues 	hrisino
at 	the 	Frontier 	of 	Competition 	and 	Trade 	Policies, 	RBP(84)
9 	Part 	II 	at 	72.

Inherent 	in 	both 	these 	pronouncements, 	made 	more 	than 	two 	decades
apart, 	is 	the 	concern 	of 	this 	collective 	multinational 	body 	over
the 	negative 	impact 	of 	such 	trade 	policies 	upon 	the 	Free 	World's
economies, 	and 	indeed, 	the 	ultimate 	consumer. 	Given 	this
historical 	and 	continuing 	concern, 	it 	is 	quite 	fitting 	that 	the
Committee 	on 	Consumer 	Policy 	sponsor 	this 	Symposium 	on 	Consumer
Policy 	and 	International 	Trade. 	Indeed, 	the 	issues 	addressed 	at
this 	Symposium 	have 	perhaps 	never 	been 	more 	timely.
The 	current 	Administration 	has 	been, 	and 	remains, 	committed
to 	promoting 	free 	and 	open 	world 	trade. 	During 	the 	last 	four
years, 	working 	within 	the 	constraints 	of 	the 	existing 	trade 	laws
of 	the 	United 	States 	as 	well 	as 	the 	practical 	realities 	of 	the
frequently 	over-heated 	political 	climate 	surrounding 	trade
issues, 	the 	current 	Administration 	has 	sought 	to 	implement 	its
commitment 	to 	free 	trade 	on 	the 	principle 	that 	such 	open 	and
unfettered 	trade 	is 	essential 	to 	a 	healthy, 	vigorously
competitive 	free-world 	economy 	which 	enhances 	the 	welfare 	of 	all
consumers. 	Recently 	the 	FTC, 	under 	the 	Chairmanship 	of 	James 	C.
Miller 	III, 	has 	played 	an 	increasingly 	active 	role 	in 	the
governmental 	process 	related 	to 	the 	enforcement 	of 	the 	United
States' 	trade 	laws. 	This 	paper 	describes 	the 	FTC's 	efforts 	in
this 	area: 	the 	attempt 	to 	underscore 	and 	dramatize 	to 	the
appropriate 	trade 	agencies 	the 	demonstrable 	"social 	costs" 	of
protectionism 	by 	presenting 	both 	legal 	and 	economic 	analyses 	of
- 	2 	-

the 	issues 	presented 	by 	particular 	cases 	and 	estimates 	of 	the
proposed 	import 	relief's 	effect 	on 	both 	consumers 	and 	the
domestic 	economy.
There 	is 	bipartisan 	support 	among 	the 	FTC's 	Commissioners
for 	these 	efforts 	even 	though 	the 	current 	five 	Commissioners 	have
been 	appointed 	by 	two 	different 	Administrations 	and 	belong 	to
both 	major 	political 	parties. 	Indeed, 	there 	has 	not 	been 	a
single 	dissenting 	vote 	on 	any 	of 	the 	Commission's 	trade 	briefs
which 	are 	discussed 	below.
I. 	The 	principal 	enforcement 	agencies 	and 	the 	principal 	trade
laws
It 	may 	be 	useful 	to 	begin 	by 	providing 	a 	brief 	summary 	of
the 	u.s. 	trade 	laws 	and 	the 	principal 	enforcement 	agencies
charged 	with 	their 	administration.
The 	President 	and 	several 	agencies 	administer 	u.s. 	foreign
trade 	laws. 	The 	principal 	agencies 	are 	the 	United 	States 	Trade
Representative 	("USTR"), 	the 	Department 	of 	Commerce 	("DOC"), 	and
the 	International 	Trade 	Commission 	("ITC").2 	In 	addition, 	the
Trade 	Policy 	Committee 	("TPC") 	-- 	which 	includes 	the 	USTR, 	who 	is
its 	Chairman, 	the 	Secretary 	of 	State, 	the 	Secretary 	of 	the
Treasury, 	the 	Secretary 	of 	Defense, 	the 	Attorney 	General, 	the
Secretary 	of 	the 	Interior, 	the 	Secretary 	of 	Agriculture, 	the
2 	The 	ITC 	is 	an 	"independent" 	agency 	like 	the 	FTC. 	The 	other
agencies 	are 	part 	of 	the 	Executive 	Branch. 	The 	Customs
Service, 	also 	part 	of 	the 	Executive 	branch, 	classifies 	and
values 	imports, 	determines 	the 	proper 	rate 	ot 	duty
applicable 	to 	imports, 	and 	assesses 	and 	collects 	the 	duty.
- 	3 	-

Secretary 	of 	Commerce, 	and 	the 	Secretary 	of 	Labor 3 	-- 	plays 	an
important 	role 	in 	the 	trade 	policy 	area. 	Some 	U.S. 	trade 	laws
countervailing 	duty 	and 	antidumping 	-- 	require 	decisions 	by 	both
the 	DOC 	and 	the 	ITC. 	The 	DOC 	determines 	the 	amount 	of 	the
foreign 	subsidy 	or 	dumping, 	and 	the 	ITC 	determines 	whether 	the
domestic 	industry 	is 	injured. 	Some 	U.S. 	trade 	laws 	-- 	such 	as
unfair 	practices 	and 	escape 	clause 	-- 	explicitly 	give 	the
President 	the 	final 	decision; 	in 	these 	situations 	he 	is 	advised
by 	the 	TPC.
While 	U.S. 	trade. laws 	cover 	numerous 	fields, 	this 	paper
concentrates 	on 	those 	four 	areas 	in 	which 	the 	FTC 	has 	recently
played 	a 	role: 	countervailing 	duties, 	antidumping, 	unfair
practicesi 	and 	the 	escape 	clause.
Countervailina 	duties 	are 	imposed 	when 	the 	DOC 	determines
that 	a 	"subsidy" 	is 	being 	provided 	to 	goods 	imported 	into 	the
U.S. 	and 	when 	the 	ITC 	determines 	that 	a 	U.S. 	industry 	is
materially 	injured, 	or 	threatened 	by 	injury, 	by 	reason 	of 	imports
of 	the 	subsidized 	merchandise. 4 	Antidumping 	duties 	are 	imposed
when 	the 	DOC 	determines 	that 	imports 	are 	being 	sold 	at 	"less 	than
fair 	value" 	and 	when 	the 	ITC 	determines 	that 	a 	U.S. 	industry 	is
3 	15 	C.F.R. 	§2002.0.
4 	19 	U.S.C. 	§§1671 	et 	seq. 	If 	a 	foreign 	country 	has 	not
signed 	the 	International 	Agreement 	on 	Subsidies 	and
Countervailing 	Measures, 	or 	an 	equivalent 	agreement, 	then
countervailing 	duties 	are 	imposed 	even 	if 	there 	is 	no
injury. 	19 	U.S.C. 	§1303 (a) (1). 	If 	a 	country 	is 	a
signatory 	of 	the 	General 	Agreement 	on 	Tariffs 	and 	Trade
("GATT") 	and 	if 	the 	imported 	item 	is 	duty-free, 	then
countervailing 	duties 	can 	be 	imposed 	only 	if 	the 	ITC 	makes
an 	affirmative 	injury 	determination. 	19 	U.S.C.
§ 	1303 (a) (2).
- 	4 	-

materially 	injured, 	or 	threatened 	by 	injury, 	by 	reason 	of 	imports
of 	the 	dumped 	goods. 5 There 	is 	judicial 	review 	by 	the 	Court 	of
International 	Trade 	of 	both 	countervailing 	duty 	and 	antidumping
decisions.
The 	ITC 	also 	investigates 	whether 	unfair 	methods 	of
comoetition 	or 	unfair 	acts 	in 	the 	importation 	of 	articles 	into
the 	U.S. 	are 	destroying 	or 	substantially 	injuring 	an 	efficiently
operating 	industry 	in 	the 	U.S., 	preventing 	the 	establishment 	of
such 	an 	industry, 	or 	restraining 	or 	monopolizing 	trade 	in 	the
U.S. 6 	If 	such 	a 	violation 	is 	found, 	the 	ITC 	may 	order 	the
exclusion 	of 	such 	articles 	from 	the 	U.s. 	The 	President, 	however,
may 	disapprove 	such 	an 	order 	by 	the 	ITC. 	The 	Court 	of
International 	Trade 	reviews 	decisions 	by 	the 	ITC 	under 	this
provision 	as 	well.
Under 	the 	"escace 	clause", 	the 	ITC 	determines 	if 	rising
imports 	are 	a 	substantial 	cause 	of 	injury 	to 	a 	domestic
industry.? 	If 	so, 	the 	ITC 	may 	recommend 	adjustment 	assistance
for 	the 	workers 	and 	firms 	in 	that 	industry, 	higher 	tariffs, 	or
import 	quotas. 	The 	President 	receives 	a 	recommendation 	from 	the
Trade 	Policy 	Committee 	following 	its 	review 	of 	the 	lTC's
decision, 	and 	the 	President 	then 	decides 	what 	relief, 	if 	any, 	to
order. 	If 	the 	President 	takes 	action 	different 	from 	what 	the 	ITC
5 	19 	U.S.C. 	§§1673 	et 	sea. 	"Less 	than 	fair 	value" 	is 	a
technical 	term; 	roughly 	speaking, 	it 	means 	selling 	in 	the
U.S. 	at 	a 	price 	that 	either 	is 	below 	the 	price 	in 	the
domestic 	market 	or 	is 	below 	the 	cost 	of 	production.
6 	19 	U.S.C. 	§1337.
7 	19 	U.S.C. 	§§2251 	et 	sea.
- 	5 	-

recommends, 	then 	Congress 	may 	override 	the 	President 	by 	passing 	a
concurrent 	resolution 	directing 	the 	President 	to 	proclaim 	the
relief 	recommended 	by 	the 	ITC. 8 The 	Court 	of 	International 	Trade
reviews 	the 	action 	taken 	by 	the 	ITC 	and 	the 	President. 9
II. 	The 	Conqressional 	perception 	of 	the 	link 	between 	the 	trade
laws 	and 	the 	antitrust 	laws
A brief 	review 	of 	the 	legislative 	history 	related 	to 	the
enactment 	of 	the 	U.S. 	trade 	laws 	demonstrates 	that 	the 	United
States 	Congress 	believed 	that 	the 	goals 	of 	the 	countervailing
duty, 	antidumping, 	and 	unfair 	practices 	provisions 	of 	our 	trade
laws 	ar~ 	intimately 	connected 	with 	the 	goals 	of 	our 	antitrust
laws. 	The 	first 	countervailing 	duty 	statute 	was 	passed 	in 	1890,
the 	same 	year 	as 	the 	Sherman 	Antitrust 	Act. 	In 	1916 	Congress
passed 	the 	first 	antidumping 	statute,lO 	two 	years 	after 	passing
the 	Clayton 	Antitrust 	Act 	and 	the 	Federal 	Trade 	Commission 	Act.
The 	stated 	purpose 	of 	this 	first 	antidumping 	law 	was 	to 	place
foreign 	firms 	selling 	in 	the 	U.S. 	in 	the 	same 	position 	"with
8 	19 	U.S.C. 	§2253 (c) (1). 	This 	part 	of 	the 	law 	may 	no 	longer
be 	valid 	in 	light 	of 	the 	Supreme 	Court's 	recent 	decision
involving 	a 	similar 	provision 	in 	our 	immigration 	law.
Immigration 	and 	Naturalization 	Service 	v. 	Chadha, 	103 	S.
Ct. 	2764 	(1983).
9 	Maole 	Leaf 	Fish 	Co. 	v. 	U.S., 	566 	F. 	Supp. 	899 	(Ct. 	Int'l
Trade 	1983) 	and 	6 	ITRD 	1019 	(Ct. 	Int'l 	Trade 	1984).
10 	15 	U.S.C. 	§ 	72.
- 	6 	-

reference 	to 	unfair 	competition" 	as 	domestic 	firms. ll In 	1921
Congress 	passed 	another 	antidumping 	law 	-- 	the 	predecessor 	of 	the
current 	antidumping 	law 	administered 	by 	the 	ITC 	and 	DOC-- 	to
prevent 	foreign 	firms 	from 	engaging 	in 	what 	it 	called 	"predatory
pricing" 	in 	the 	u.S. 12 In 	1922 	Congress 	made 	minor 	changes 	to
the 	countervailing 	duty 	law 	and 	also 	enacted 	legislation
prohibiting 	imports 	associated 	with 	"unfair 	methods 	of
competition. "13 	Senator 	Smoot, 	one 	of 	the 	sponsors 	of 	the 	1922
tariff 	legislation, 	said 	that 	these 	provisions 	were 	an 	extension
of 	the 	existing 	antidumping 	laws 	and 	the 	existing 	countervailing
cuty 	law, 	intended 	to 	protect 	U.S. 	firms 	against 	"unfair
competition. 1114
Congress 	enacted 	two 	specific 	statutory 	provisions 	dealing
with 	links 	between 	the 	FTC 	and 	the 	lTC. 	In 	its 	investigations 	of
unfair 	practices 	in 	import 	trade, 	the 	ITC 	is 	directed 	to 	consult
with, 	and 	seek 	advice 	and 	information 	from, 	the 	FTC 	and 	other
agencies. lS 	More 	generally, 	the 	FTC 	and 	other 	agencies 	are
directed 	to 	"cooperate 	fully 	with 	the 	[ITC] 	for 	the 	purposes 	of
aiding 	and 	assisting 	in 	its 	work." l6
11 	H.R. 	Rep. 	No. 	922, 	64th 	Cong., 	1st 	Sess. 	9-10 	(1916).
12 	H.R. 	Rep. 	No.1, 	67th 	Cong., 	1st 	Sess. 	23-24 	(1921).
13 	19 	U.S.C. 	§ 	1337.
14 	62 	Congo 	Rec. 	5874 	(1922). 	See 	S. 	Rep. 	No. 	595, 	67th
Cong., 	2dSess. 	2-3 	(1922).
15 	19 	U.S.C. 	51337 (b) (2).
16 	19 	U.S.C. 	§1334.
- 	7 	-

Additionally, 	the 	"escape 	clause" 	statute 	states 	that 	the
President, 	in 	determining 	whether 	to 	provide 	import 	relief, 	shall
take 	into 	account, 	inter 	alia, 	"the 	effect 	of 	import 	relief 	on
consumers .•• and 	on 	competition 	in 	the 	domestic 	markets 	for 	such
articles."17 	The 	unfair 	practices 	provision 	states 	that, 	in
deciding 	whether 	to 	exclude 	an 	article, 	the 	ITC 	shall 	consider
the 	effects 	of 	such 	exclusion 	"upon •.• comoetitive 	conditions 	in
the 	United 	States 	economy .•• and 	United 	States 	consumers. ulB
Given 	this 	historical 	statutory 	linkage 	of 	trade 	policy 	to
competition 	policy, 	the 	FTC 	in 	recent 	years 	has 	undertaken
analyses 	designed 	to determine 	in 	specific 	cases 	the 	economic
impact 	of 	trade 	relief 	on 	competition 	and 	the 	consumer. 19 The
Commission's 	analyses 	are 	then 	shared 	with 	the 	agencies 	with
17 	19 	U.S.C. 	§2252 (c) (4) 	(emphasis 	added).
18 	19 	u.s .C. 	§1337 (d) 	(emphasis 	added).
19 	The 	organization 	of 	the 	Commission 	is 	diviaea 	into 	three
Bureaus 	which 	carry 	out 	its 	two 	principal 	Congressiona~
mandates: 	maintaining 	competition 	in 	the 	marketplace 	and
policing 	unfair 	and 	deceptive 	trade 	practices. 	The
separate, 	but 	complementary 	duties, 	responsibilities, 	and
expertise 	of 	its 	three 	Bureaus 	facilitate 	this 	goa~. 	~he
FTC's 	participation 	in 	foreign 	trade 	proceedings 	is 	a
product 	of 	the 	joint 	efforts 	of 	the 	Bureaus 	of 	Consumer
Protection, 	Competition 	and 	Economics. 	The 	principal
mission 	of 	the 	Bureau 	of 	Consumer 	Protection 	is 	to
eliminate 	unfair 	or 	deceptive 	acts 	or 	practices 	in 	or
affecting 	commerce, 	with 	an 	emphasis 	on 	those 	practices
that 	may 	unreasonably 	restrict 	or 	inhibit 	the 	free 	exercise
of 	consumer 	choice. 	The 	Bureau 	enforces 	the 	consumer
protection 	laws 	administered 	by 	the 	FTC. 	The 	principal
mission 	of 	the 	Bureau 	of 	Competition 	is 	to 	enhance 	the
welfare 	of 	consumers 	by 	maintaining 	competitive 	operation
of 	our 	economic 	system 	of 	private 	enterprise 	through
enforcement 	of 	our 	antitrust 	laws. 	Lastly, 	the 	Bureau 	of
Economic's 	principal 	mission 	is 	to 	provide 	economic 	support
to 	the 	FTC's 	consumer 	protection 	and 	antitrust 	activities.

which 	the 	individual 	proceedings 	are 	pending. 	The 	typical 	trade
proceeding 	involves 	the 	domestic 	firms 	and 	the 	unions
representing 	their 	workers, 	on 	the 	one 	hana, 	and 	U.S. 	importers
and 	foreign 	exporters, 	on 	the 	other 	hand. 	Individual 	consumers
rarely 	appear,20 	and 	organizations 	representing 	consumers 	have
not 	appeared 	in 	any 	of 	the 	proceedings 	in 	which 	the 	FTC 	has 	been
involved. 	The 	Commission's 	so-called 	"intervention" 	program
therefore 	has 	allowed 	the 	FTC 	to 	assume 	the 	role 	of 	consumer
advocate 	before 	the 	agencies 	holding 	the 	proceeding.
III. 	The 	FTC's 	recent 	intervention 	in 	trade 	cases 21
A. 	Countervailing 	duties 	and 	dumpinq: 	Carbon 	Steel
In 	January 	1982 	seven 	major 	United 	States 	steel 	firms 	filed
antidumping 	and 	countervailing 	duty 	petitions 	covering 	nine 	major
steel 	products 	imported 	from 	Belgium, 	Brazil, 	the 	Federal
Republic 	of 	Germany, 	France, 	Italy, 	Luxembourg, 	the 	Netherlands,
Romania, 	South 	Africa, 	Spain, 	and 	the 	United 	Kingdom. 	The 	FTC
filed 	briefs, 	presented 	oral 	testimony, 	and 	cross-examined 	other
parties' 	witnesses 	at 	both 	the 	DOC 	and 	the 	ITC.
20 	Individual 	consumers 	did 	participate 	in 	the 	carbon 	steel
escape 	clause 	case.
21 	The 	FTC's 	first 	major 	involvement 	in 	a 	trade 	proceeding 	was
in 	the 	"escape 	clause" 	case 	in 	1980 	dealing 	with 	imported
automobiles. 	In 	that 	case 	our 	Bureau 	of 	Economics
presented 	to 	the 	ITC 	a 	model 	which 	analyzed 	the 	likely
impact 	of 	the 	proposed 	tariffs 	and 	quotas 	on 	sales, 	prices,
profits, 	employment, 	competition, 	and 	costs 	to 	the
consumer.
- 	9 	-

The 	FTC's 	principal 	brief 	to 	the 	DOC 	on 	countervailing
duties 	stated 	that 	a 	major 	purpose 	of 	the 	Trade 	Agreements 	Act 	of
1979 	(which 	enacted 	the 	current 	countervailing 	duty 	law) 	is 	to
promote 	world 	trade 	based 	on 	efficiency 	or 	long-run 	comparative
advantage. 	The 	brief 	then 	applied 	this 	general 	principle 	to
three 	of 	the 	principal 	alleged 	subsidies 	involving 	imported
carbon 	steel.
It 	was 	alleged 	by 	petitioners 	that 	European 	steel 	firms
received 	subsidies 	because 	of 	payments 	by 	the 	respective 	European
governments 	to 	their 	domestic 	coal 	firms. 	The 	Commission 	said
that 	the 	legislative 	history 	and 	judicial 	precedent 	interpreting
the 	countervailing 	duty 	law 	indicate 	that 	payments 	to 	local 	coal
companies 	are 	not 	subsidies 	to 	the 	steel 	companies 	to 	the 	extent
these 	payments 	merely 	reduce 	the 	difference 	between 	the 	price 	of
local 	coal--which 	the 	steel 	companies 	are 	forced 	by 	their
governments 	to 	buy 	even 	though 	foreign 	coal 	is 	cheaper 	-- 	and 	the
price 	of 	imported 	coal; 	the 	Commission 	also 	said 	that 	there 	is 	no
subsidy 	to 	the 	steel 	firms 	if 	they 	buy 	the 	coal 	at 	the 	same 	price
as 	other 	users 	of 	coal.
A second 	major 	alleged 	subsidy 	involved 	the 	acquisition 	of
equity 	and 	the 	provision 	of 	grants, 	loans, 	and 	loan 	guarantees 	by
governments 	to 	steel 	firms 	as 	part 	of 	the 	"financial
restructuring" 	of 	these 	steel 	firms. 	The 	FTC 	observed 	that 	in
bankruptcy 	proceedings 	in 	the 	U.s. 	private 	creditors 	frequently
take 	equity 	or 	give 	new 	loans 	to 	private 	debtors, 	and 	the
Commission 	noted 	that 	in 	many 	cases 	the 	foreign 	government 	was 	a
creditor 	of 	the 	foreign 	steel 	firm 	prior 	to 	the
- 	10 	-

"restructuring. 1I The 	Commission 	concluded 	that 	the 	foreign
government's 	acquisition 	of 	equity 	or 	provision 	of 	additional
grants, 	loans, 	or 	loan 	guarantees 	was 	not 	a 	subsidy 	if 	it 	was
consistent 	with 	rational 	policies 	of 	private 	lenders 	in 	similar
circumstances.
Another 	major 	alleged 	subsidy 	dealt 	with 	government 	payments
for 	research 	and 	development. 	The 	FTC 	said 	that 	such 	payments
are 	not 	a 	subsidy 	if 	they 	are 	financed 	out 	of 	a 	special 	tax 	on
steel 	earmarked 	for 	research 	and 	development 	or 	if 	they 	are 	for
basic 	research.
Finally, 	the 	Commission 	proferred 	estimates 	prepared 	by 	our
Bureau 	of 	Economics 	of 	the 	costs 	to 	the 	economy 	and 	the 	consumer
of 	imposing 	a 	countervailing 	duty. 	For 	example, 	if 	a 	uniform
countervailing 	duty 	of 	15 	percent 	were 	imposed, 	then 	this 	would
illipose 	an 	annual 	cost 	to 	United 	States' 	consumers 	of 	$480 	million
and 	an 	annual 	inefficiency 	loss 	to 	the 	United 	States' 	economy 	of
between 	$238 	million 	and 	$257 	million.
The 	FTC's 	brief 	to 	the 	DOC 	on 	the 	dumping 	aspects 	of 	the
carbon 	steel 	cases 	again 	began 	by 	stating 	that 	in 	both 	the
antidumping 	law 	and 	the 	antitrust 	laws 	Congress 	sought 	to 	create
a 	legal 	environment 	in 	which 	the 	most 	efficient 	firms 	would
survive. 	Thus, 	while 	prohibiting 	lI un fair" 	competition 	from
foreign 	imports, 	the 	antidumping 	law 	should 	not 	be 	interpreted 	so
as 	to 	deny 	United 	States' 	consumers 	the 	benefits 	of 	fair
competition 	by 	efficient 	foreign 	firms. 	The 	FTC 	then 	turned 	to
some 	of 	the 	particular 	problems 	raised 	by 	these 	petitions. 	The
dumping 	law 	provides 	that 	the 	DOC 	shall 	compare 	the 	price 	in 	the
- 	11 	-

u.s. 	with 	an 	estimate 	of 	foreign 	production 	costs-- 	"constructed
value" 	-- 	if 	the 	price 	in 	the 	foreign 	market 	does 	not 	cover 	the
foreign 	firm's 	total 	costs 	over 	"a 	reasonable 	period 	of 	time."
The 	Commission 	suggested 	that 	a 	"reasonable 	period 	of 	time" 	would
be 	the 	entire 	business 	cycle 	and 	not 	just 	the 	recession 	period
argued 	by 	petitioners. 	Noting 	that 	the 	DOC 	adjusts 	the 	price 	in
the 	foreign 	market 	to 	reflect 	physical 	differences 	in 	the
product, 	the 	FTC 	suggested 	that 	the 	DOC 	should 	also 	adjust 	the
foreign 	price 	downward 	to 	allow 	for 	certain 	important 	non-
physical 	differences 	between 	sales 	to 	customers 	in 	the 	foreign
country 	and 	sales 	to 	customers 	in 	the 	U.S.; 	e.g. 	(1) 	foreign
steel 	firms 	may 	give 	their 	local 	customers 	more 	reliable
deliveries 	than 	they 	give 	their 	u.s. 	customers, 	(2) 	foreign 	steel
firms 	may 	give 	their 	local 	customers 	prompter 	service, 	more
timely 	deliveries, 	and 	better 	technical 	assistance 	than 	they 	give
their 	U.s. 	customers.
Following 	the 	DOC's 	findings 	that 	most 	of 	the 	foreign 	steel
firms 	were 	receiving 	subsidies 	and 	were 	dumping, 	the 	FTC
submitted 	briefs 	to 	the 	ITC 	on 	the 	injury 	phase 	of 	the
proceedings. 	The 	Commission 	asserted 	that 	there 	is 	no 	injury 	to
domestic 	steel 	firms 	if 	competitive 	conditions 	in 	the 	U.s. 	would
be 	unchanged 	even 	if 	there 	were 	no 	subsidized 	imports. 	The 	FTC
suggested 	that 	this 	might 	be 	the 	case 	here 	because 	a 	majority 	of
steel 	imports 	carne 	from 	low-cost 	producing 	countries, 	such 	as
Japan 	and 	Canada, 	not 	found 	to 	have 	been 	subsidizing 	their 	steel
exports, 	and 	these 	countries 	had 	substantial 	unused 	steel
capacity 	available. 	The 	Commission 	also 	stated 	that 	there 	was 	no
- 	12 	-

injury 	if 	the 	foreign 	subsidies 	do 	not 	have 	the 	effect 	of
increasing 	sales 	of 	foreign 	steel 	in 	the 	u.s. 	Since 	most 	of 	the
subsidies 	found 	by 	the 	DOC 	related 	to 	the 	financial 	restructuring
of 	foreign 	steel 	firms, 	the 	Commission 	suggested 	that 	some 	of
this 	restructuring 	may 	simply 	have 	affected 	the 	steel 	firms'
fixed 	costs 	and 	so 	had 	no 	impact 	on 	their 	sales 	in 	the 	u.s. 	The
FTC 	also 	said 	that 	some, 	if 	not 	all, 	of 	the 	alleged 	margin 	by
which 	foreign 	steel 	sold 	below 	domestic 	steel 	in 	the 	u.s. 	might
be 	due 	to 	differences 	in 	non-physical 	aspects 	of 	the 	two
products, 	such 	as 	reliability 	of 	delivery, 	promptness 	of
delivery, 	and 	service. 	Finally, 	at 	the 	request 	of 	the 	FTC, 	the
staff 	of 	the 	lTC, 	using 	confidential 	data 	they 	had 	collected,
calculated 	Hirschman-Herfindahl 	indices 	for 	the 	various 	steel
products, 	and 	the 	Commission 	observed 	that 	some 	of 	the 	product
markets 	-- 	hot-rolled 	plate 	and 	structurals-- 	were 	so
concentrated 	that 	elimination 	of 	the 	challenged 	imports 	might
result 	in 	an 	increase 	in 	concentration 	sufficient 	to 	attract
attention 	if 	such 	an 	increase 	were 	to 	result 	from 	a 	merger. 22
While 	the 	cases 	against 	the 	EEC 	steel 	firms 	were 	settled 	in
the 	fall 	in 	1982 	by 	an 	agreement 	between 	the 	EEC 	and 	the 	u.s.
government 	setting 	quotas 	on 	EEC 	steel 	exports 	to 	the 	U.S., 	the
U.s. 	steel 	companies 	challenged 	in 	the 	Court 	of 	International
Trade 	the 	DOC's 	findings 	about 	the 	magnitudes 	of 	the 	subsidies
for 	Brazil, 	South 	Africa, 	and 	Spain. 	The 	FTC 	was 	granted
22 	For 	further 	development 	of 	this 	concept, 	see 	Benjamin 	I.
Cohen, 	"A 	Method 	for 	Analyzing 	the 	Effect 	on 	Competition 	of
Restricting 	Imports," 	5 Northwestern 	Journal 	of
International 	Law 	& Busness 	510 	(Fall 	1983).
- 	13 	-

permission 	by 	the 	Court 	to 	be 	an 	amicus 	curiae 	in 	these 	cases,
and 	the 	FTC 	then 	filed, 	in 	1983, 	briefs 	that 	presented
essentially 	the 	same 	analysis 	concerning 	financial 	restructuring
that 	the 	FTC 	had 	made 	to 	the 	DOC. 	The 	FTC 	pointed 	out 	to 	the
Court 	that 	the 	DOC 	had 	adopted 	our 	analytical 	framework 	about
restructuring 	in 	the 	case 	of 	a 	Luxembourg 	steel 	firm, 	and 	so, 	we
suggested, 	it 	would 	be 	appropriate 	to 	apply 	the 	same 	legal
standard 	to 	the 	restructuring 	that 	had 	occurred 	in 	the 	cases 	of
Brazil, 	South 	Africa, 	and 	Spain. 	Following 	a 	settlement 	between
the 	u.s. 	steel 	companies 	and 	the 	DOC 	in 	early 	1984, 	these 	cases
were 	voluntarily 	dismissed 	by 	the 	Court 	prior 	to 	any 	ruling 	on
the 	issues 	the 	FTC 	had 	raised.
B. 	Softwood 	Lumber 	Products 	from 	Canada
In 	April 	1983 	the 	FTC 	filed 	with 	the 	DOC 	a 	brief 	concerning
alleged 	subsidies 	given 	by 	the 	Canadian 	national 	and 	provincial
governments 	to 	exporters 	of 	softwooa 	lumber 	proaucts. 	The
alleged 	subsidy 	concerned 	the 	fee 	charged 	by 	the 	governments 	for
the 	right 	to 	cut 	trees 	on 	land 	owned 	by 	the 	governments 	("the
stumpage 	fee"). 	The 	FTC 	endorsed 	the 	DOC's 	preliminary 	finding
that 	the 	stumpage 	fee 	was 	not 	a 	countervailable 	subsidy, 	noting
that 	petitioners' 	request, 	if 	granted, 	might 	raise 	the 	cost 	of 	a
single-family 	house 	by 	as 	much 	as 	6.5 	percent.
The 	FTC 	stated 	that 	the 	language 	and 	legislative 	history 	of
the 	countervailing 	duty 	statute 	both 	indicate 	that 	not 	every
government 	payment 	or 	benefit 	to 	a 	private 	party 	is 	a
countervailable 	subsidy; 	only 	those 	payments 	that 	distort 	trade
and 	resource 	allocation 	by 	affecting 	the 	price 	or 	quantity 	of 	the
- 	14 	-

good 	produced 	should 	be 	sUbject 	to 	countervailing 	duties. 	The
FTC 	then 	provided 	a 	detailed 	economic 	analysis 	which 	showed 	that
the 	benefit, 	if 	any, 	realized 	by 	timber 	owners 	in 	Canada 	from 	the
stumpage 	fee 	did 	not 	affect 	the 	quantity 	or 	price 	of 	Canadian
lumber 	sold 	in 	the 	u.s. 	and 	so 	was 	not 	a 	countervailable 	duty
subsidy 	to 	lumber. 	The 	FTC's 	analysis 	also 	indicated 	that 	the
appropriate 	benchmark 	by 	which 	to 	determine 	whether 	there 	is 	a
subsidy 	would 	not 	be, 	as 	alleged 	by 	petitioners, 	the 	stumpage
price 	in 	the 	u.s. 	but 	would 	be 	the 	stumpage 	price 	that 	would
exist 	in 	Canada 	under 	a 	different 	system. 	The 	DOC's 	final
determination 	used 	a 	framework 	similar 	to 	that 	proposed 	by 	the
FTC 	and 	held 	there 	was 	no 	subsidy.
C. 	Color 	Television 	Receivers 	from 	the 	Reoublic 	of 	Korea
and 	Taiwan
Reflecting 	the 	ever 	increasing 	internationalization 	of
trade, 	many 	foreign 	firms 	have 	established 	manufacturing
facilities 	in 	the 	United 	States 	on 	a 	"grass 	roots 	basis" 	or
through 	acquisitions 	and 	joint 	ventures. 	The 	status 	of 	such
firms 	became 	an 	issue 	in 	a 	recent 	trade 	proceeding. 	Foreign
companies 	had 	established 	several 	plants 	in 	the 	u.s. 	to 	produce
color 	television 	receivers. 	In 	May 	1983 	the 	FTC 	filed 	a 	brief
with 	the 	ITC 	on 	the 	issue 	of 	whether 	plants 	owned 	by 	Japanese,
Korean, 	and 	Taiwanese 	firms 	should 	be 	considered 	by 	the 	ITC 	as
part 	of 	the 	U.S. 	industry 	in 	determining 	whether 	under 	the
applicable 	trade 	law 	the 	U.S. 	industry 	was 	being 	injured 	by
allegedly 	dumped 	imports 	from 	the 	Republic 	of 	Korea 	and 	Taiwan.
The 	petitioners 	argued 	that 	the 	U.S. 	industry 	consisted 	of 	only
- 	15 	-

five 	u.s. 	owned 	companies 	and 	-- 	without 	explanation 	-- 	one 	Dutch
owned 	company. 	The 	FTC 	presented 	a 	broader 	definition, 	which
included 	eight 	Japanese 	plants, 	a 	Korean 	plant, 	and 	two 	Taiwanese
plants. 23 The 	FTC 	stated 	that 	the 	legislative 	history, 	the 	lTC's
own 	precedents, 	and 	the 	nature 	of 	competition 	in 	the 	U.S. 	market
between 	foreign 	and 	domestic 	television 	receivers 	all 	indicated
that 	the 	ITC 	should 	consider 	all 	producers 	located 	in 	the 	U.S. 	as
part 	of 	the 	U.S. 	industry. 	The 	ITC 	eventually 	agreed 	with 	the
FTC's 	analysis 	on 	this 	issue. 24
D. 	Vertical 	Milling 	Machines 	from 	Taiwan
In 	January 	1984 	the 	FTC 	filed 	with 	the 	ITC 	a 	brief
concernipg 	alleged 	unfair 	practices 	by 	43 	Taiwanese 	manufacturers
and 	importers 	of 	vertical 	millin~ machines, 	a 	type 	of 	machine
tool. 	The 	petitioner 	argued, 	in 	part, 	that 	the 	general 	shape 	of
its 	"Bridgeport" 	brand 	vertical 	milling 	machine 	was 	a 	common 	law
trademark 	and 	that 	the 	Taiwanese 	firms' 	products 	should 	be
excluded 	from 	the 	U.S. 	because 	they 	were 	infringing 	on 	that
trademark 	and 	thus 	were 	engaging 	in 	an 	"unfair 	method 	of
competition." 	The 	Commission 	stated 	that 	there 	was 	a 	strong
national 	interest 	in 	encouraging 	competition 	in 	the 	production
23 	These 	plants 	were 	built 	following 	numerous 	successful
efforts 	by 	U.S. 	producers 	of 	television 	receivers 	to 	limit
imports 	from 	these 	countries. 	These 	efforts 	include 	a
major 	antidumping 	proceeding 	in 	1971, 	claims 	of 	unfair
trade 	practices, 	and 	an 	escape 	clause 	proceeding 	in 	1977.
The 	President 	negotiated 	Orderly 	Marketing 	Agreements 	with
Japan 	in 	1977 	and 	with 	Korea 	and 	Taiwan 	in 	1979.
24 	The 	FTC 	did 	not 	participate 	in 	the 	"injury" 	issue 	in 	this
case.
- 	16 	-

and 	sale 	of 	unpatented 	products 	and 	that 	the 	public 	interest 	in
preventing 	consumer 	confusion 	and 	deception 	can 	be 	adequately
protected 	by 	ensuring 	that 	imported 	products 	are 	truthfully
labeled 	as 	to 	their 	origins. 	The 	Commission 	suggested 	that 	in
determining 	what 	constitutes 	an 	"unfair" 	trade 	practice 	the 	lTC
should 	be 	guided 	by 	domestic 	law 	so 	that 	foreign 	producers 	were
not 	held 	to 	a 	higher 	standard 	of 	conduct 	than 	their 	domestic
competitors. 	Where 	the 	purchasers 	of 	milling 	machines 	were
knowledgeable 	and 	exercised 	a 	high 	degree 	of 	care 	in 	buying 	the
expensive 	machines, 	the 	Commission 	concluded 	that 	accurate
labeling 	as 	to 	the 	machines' 	manufacturer 	was 	sufficient 	to
prevent 	any 	consumer 	deception. 	The 	lTC 	dismissed 	this 	portion
of 	the 	petition.
E. 	"Escape 	clause" 	petitions 	on 	carbon 	steel, 	copper, 	and
canned 	tuna 	fish
In 	early 	1984 	"escape 	clausell 	petitions 	were 	filed 	with 	the
lTC 	seeking 	relief 	from 	imports 	of 	footwear, 	carbon 	steel,
copper, 	and 	canned 	tuna 	fish. 	The 	FTC 	participated 	fully 	in 	the
lTC's 	proceedings 	on 	carbon 	steel, 	copper, 	and 	canned 	tuna
fish. 25 	Following 	affirmative 	findings 	of 	injury 	or 	threat 	of
injury 	by 	the 	lTC 	on 	carbon 	steel 	and 	copper, 	the 	FTC 	also 	filed
briefs 	with 	the 	USTR 	and 	the 	Trade 	Policy 	Committee 	on 	these 	two
matters.
25 	On 	March 	20, 	1984 	the 	FTC 	notified 	the 	lTC 	that 	it 	wished
to 	participate 	in 	the 	lTC's 	hearing 	on 	remedy 	in 	the
footwear 	case. 	The 	ITC 	ultimately 	determined 	that 	there
was 	no 	injury 	in 	this 	case, 	and 	so 	there 	was 	no 	remedy
hearing.
- 	17 	-

In 	each 	of 	these 	three 	escape 	clause 	proceedings 	the 	FTC
presented 	identical 	analyses 	concerning 	the 	appropriate
analytical 	framework 	for 	determining 	if 	there 	was 	injury 	and, 	if
so, 	what 	remedy 	should 	be 	recommended 	to 	the 	President. 	The
Commission 	also 	presented 	in 	each 	ITC 	proceeding 	an 	estimate 	of
the 	cost 	to 	the 	U.S. 	consumer 	and 	the 	economy 	of 	the 	reliet
requested 	by 	the 	petitioners. 26
In 	the 	injury 	phase 	of 	each 	ITC 	investigation 	the 	FTC
asserted 	that 	the 	statutory 	language 	and 	legislative 	history 	both
suggest 	that 	escape 	clause 	relief 	should 	not 	be 	based 	on 	long-
term 	shifts 	in 	comparative 	advantage, 	declines 	in 	domestic
demand, 	or 	increases 	in 	the 	costs 	of 	a 	domestic 	industry. 	The
FTC 	then 	applied 	this 	analytical 	framework 	to 	each 	of 	the 	three
investigations.
For 	carbon 	steel, 	the 	Commission 	stated 	that 	available
information 	raised 	questions 	regarding 	petitioners· 	entitlement
to 	escape 	clause 	relief, 	since 	many 	of 	the 	import 	relatea
problems 	appear 	to 	have 	had 	their 	origins 	in 	long-term 	trends 	and
increased 	imports 	appear 	to 	be 	only 	one 	of 	many 	factors
contributing 	to 	the 	decline 	of 	the 	domestic 	steel 	industry.
In 	copper 	the 	FTC 	suggested 	that 	while 	a 	recurring 	decline
in 	domestic 	demand 	may 	be 	the 	most 	important 	cause 	of 	inJury 	to
the 	domestic 	industry, 	the 	ITC 	should 	also 	consider 	depressed
26 	Recently 	the 	USTR 	specifically 	requested 	the 	ITC 	to 	furnish
the 	Administration 	with 	estimates 	of 	the 	likely 	cost 	of
import 	relief 	to 	consumer 	industries 	and 	the 	ultimate
consumer 	in 	these 	types 	of 	proceedings. 	Letter 	from 	Hon.
William 	E. 	Brock 	to 	Hon. 	Alfred 	Eckes, 	Chairman, 	lTC, 	April
6, 	1984.
- 	18 	-

copper 	demand 	outside 	the 	u.s. 	and 	foreign 	currency 	devaluations
as 	other 	possible 	causes 	of 	injury 	which 	might 	entitle 	the
petitioners 	to 	relief.
In 	canned 	tuna 	fish 	the 	Commission 	indicated 	that 	available
information 	suggests 	that 	the 	shift 	in 	domestic 	demand 	from 	tuna
canned 	in 	oil 	to 	tuna 	canned 	in 	water 	is 	the 	most 	important 	cause
of 	actual 	or 	threatened 	injury 	and 	that 	there 	was 	reason 	to 	doubt
whether 	the 	domestic 	tuna 	industry 	could 	become 	competitive 	with
foreign 	tuna 	industries 	within 	the 	limited 	time 	period--five
years--for 	which 	escape 	relief 	would 	be 	available 	if 	injury 	were
found.
In 	each 	of 	these 	proceedings 	the 	FTC 	also 	proffered 	to 	the
ITC 	estimates 	of 	the 	costs 	to 	the 	consumer 	and 	the 	economy 	over
five 	years 	if 	the 	requested 	relief 	were 	grantea: 27
Cost 	to 	consumers 	and 	economv 	of
requested 	relief
Consumers 	Economv
----------------------$ 	Million
(1) 	(2)
Cost·of
adjustment
assistance 	to 	workers
(3)
carbon 	steel
copper
canned 	tuna 	fish
3,368
1,718
783
615
228
46-74
114
NA
15
In 	the 	remedy 	phase 	of 	each 	ITC 	investigation 	the 	Commission
stated 	that 	adjustment 	assistance 	to 	workers, 	whose 	jobs 	would 	be
lost 	because 	of 	rising 	imports, 	was 	preferable 	to 	restricting
27 	These 	costs 	were 	discounted 	using 	a 	discount 	rate 	of 	seven
percent.
- 	19 	-

imports. 	If 	imports 	were 	to 	be 	restricted, 	the 	Commission 	said
that 	tariffs 	were 	preferable 	to 	quotas. 	If 	quotas 	were 	to 	be
imposed, 	the 	Commission 	suggested 	that 	the 	quotas 	should 	be
global 	rather 	than 	country 	by-country 	and 	that 	they 	should 	be
allocated 	to 	U.S. 	citizens, 	perhaps 	through 	an 	auction, 	rather
than 	to 	foreigners.
The 	Commission's 	briefs 	to 	USTR 	and 	the 	Trade 	Policy
Committee 	on 	carbon 	steel 	and 	copper 28 presented 	essentially 	the
same 	analysis 	that 	the 	Commission 	had 	presented 	to 	the 	ITC
concerning 	the 	appropriate 	remedy, 	and 	the 	FTC 	also 	provided
estimates 	of 	the 	costs 	to 	the 	consumers 	and 	the 	economy 	of 	the
specific 	remedies 	recommended 	to 	the 	President 	by 	the 	majority 	of
the 	ITC.
IV. 	Evaluatinq 	the 	impact 	of 	the 	FTC's 	participation
It 	is 	difficult, 	if 	not 	impossible, 	to 	evaluate 	the 	impact
of 	the 	FTC's 	participation 	in 	the 	proceedings 	described 	above.
In 	some 	of 	these 	proceedings 	there 	were 	numerous 	other 	parties 29 ,
who 	sometimes 	presented 	the 	same 	or 	similar 	analysis 	that 	the
Commission 	made. 	In 	some 	of 	these 	proceedings, 	the 	formal
28 	The 	ITC 	determined 	there 	was 	no 	injury 	in 	the 	tuna 	fish
case, 	and 	so 	the 	investigation 	ended. 	On 	September 	6,
1984, 	the 	President 	decided 	that 	he 	would 	not 	impose 	import
restraints 	on 	foreign 	copper, 	and 	on 	September 	18 	the
President 	decided 	he 	would 	not 	unilaterally 	limit 	imports
of 	carbon 	steel.
29 	For 	example, 	in 	the 	carbon 	steel 	escape 	clause 	case 	there
were 	79 	other 	parties.
- 	20 	-

decision 	was 	consistent 	with 	our 	analysis. 30 	Other 	decisions
stated 	that 	the 	analysis 	relied 	upon 	had 	been 	developed 	in 	the
Commission's 	brief;3l 	others 	did 	not. 	Sometimes 	there 	has 	been
no 	discussion 	whatsoever 	of 	the 	issues 	raised 	by 	the 	FTC.
There 	has 	been 	one 	aspect 	of 	the 	FTC's 	role, 	however, 	that
has 	been 	rather 	unique. 	In 	all 	these 	proceedings 	the 	FTC 	has
blended 	fundamental 	economic 	analysis 	with 	legal 	arguments
derived 	from 	the 	statutory 	language, 	the 	legislative 	history, 	and
the 	precedents. 	The 	FTC 	has 	been 	the 	only 	party 	that 	has
presented 	estimates 	of 	the 	costs 	to 	the 	consumer 	and 	the 	economy
of 	the 	relief 	requested 	by 	the 	petitioners 	in 	the 	proceedings,
and 	the 	FTC 	has 	usually 	been 	the 	only 	party 	cross-examining 	the
economists 	presented 	by 	the 	other 	parties.
The 	FTC 	has 	also 	been 	cited 	in 	both 	the 	general 	press 32 and
the 	trade 	press,33 	and 	it 	is, 	of 	course, 	possible 	that 	these
articles 	have 	influenced 	the 	final 	decisions 	in 	the 	settlement 	of
the 	carbon 	steel 	countervailing 	duty 	and 	antidumping 	cases 	and
30 	For 	example, 	our 	arguments 	about 	financial 	restructuring 	in
the 	carbon 	steel 	countervailing 	duty 	cases 	were 	cited 	in
other 	parties' 	posthearing 	briefs, 	and 	in 	one 	case 	--
Luxembourg 	-- 	DOC 	used 	our 	approach.
31 	See 	opinions 	of 	ITC 	Vice 	Chairman 	Liebeler 	in 	Unwrouoht
Conner, 	ITC 	No. 	1549 	(July 	1984) 	and 	Carbon 	and 	Certain
Alloy 	Steel 	Products, 	ITC. 	No. 	1553 	(July 	1984).
32 	See, 	e.g. 	news 	stories 	in 	The 	Economist 	(June 	16, 	1984) 	at
64, 	Washinoton 	Post 	(June 	22, 	1984) 	at 	0-7, 	New 	York 	Times
(May 	8, 	1984) 	at 	0-15. 	See 	also 	editorial 	in 	Wall 	Street
Journal 	(June 	13, 	1984) 	reprinted 	as 	part 	of 	Senator
Chafee's 	remarks 	in 	Congressional 	Record 	(June 	18, 	1984) 	at
S 	7527.
33 	See, 	e.o., 	American 	Metal 	Market 	(May 	8, 	1984) 	at 	1.
- 	21 	-

may 	have 	possibly 	influenced 	the 	President 	in 	the 	escape 	clause
cases 	involving 	copper 	and 	carbon 	steel. 	Given 	this 	positive,
but 	somewhat 	unmeasurable, 	impact 	upon 	the 	trade 	proceedings 	in
the 	United 	States, 	the 	Commission 	believes 	that 	this 	voice 	for
competitive 	markets 	should 	be 	heard, 	and 	the 	Commission 	remains
committed 	to 	representing 	consumers 	in 	future 	trade 	proceedings.
- 	22 	-

LIST 	OF 	TRADE 	INTERVENTION 	BRIEFS
I. 	Carbon 	Steel: 	Countervailina 	Duties 	and 	Antidumoinq
Department 	of 	Commerce
Comment 	by 	the 	Federal 	Trade 	Commission's 	Bureau 	of
Competition, 	Bureau 	of 	Consumer 	Protection, 	and 	Bureau
of 	Economics 	on 	Countervailing 	Duty 	Investigations 	(May
28, 	1982)
Posthearing 	Brief 	by 	the 	Federal 	Trade 	Commission's
Bureau 	of 	Competition, 	Bureau 	of 	Consumer 	Protection,
and 	Bureau 	of 	Economics 	on 	Countervailing 	Duty
Investigations 	(July 	21, 	1982)
Posthearing 	Brief 	by 	the 	Federal 	Trade 	Commission's
Bureau 	of 	Competition, 	Bureau 	of 	Consumer 	Protection,
and 	Bureau 	of 	Economics 	on 	the 	Issue 	of 	Financial
Restructuring 	in 	the 	Countervailing 	Duty 	Investigations
(July 	26, 	1982)
Comment 	by 	the 	Federal 	Trade 	Commission 	on 	Antidumping
Investigations 	(July 	28, 	1982)
International 	Trade 	Commission
Comment 	by 	the 	Federal 	Trade 	Commission 	on 	the
Countervailing 	Duty 	Investigations 	(August 	11, 	1982)
Prehearing 	Brief 	of 	the 	Federal 	Trade 	Commission
(August 	27, 	1982)·
The 	Federal 	Trade 	Commission's 	Posthearing 	Brief 	and
Responses 	to 	Commissioners' 	Questions 	and 	~equests
(September 	14, 	1982)
Court 	of 	International 	Trade
Brief 	by 	the 	Federal 	Trade 	Commission 	as 	Amicus 	Curaie
on 	Plaintiffs' 	Motions 	Concerning 	Creditworthiness 	and
Equity 	Infusions 	of 	ISCOR, 	USIMINAS, 	and 	COSIPA
(June 	14, 	1983)
Brief 	by 	the 	Federal 	Trade 	Commission 	as 	Amicus 	Curaie
on 	Plaintiffs' 	Motions 	Concerning 	Carbon 	Steel 	Products
from 	Spain 	(December 	2, 	1983)
- 	23 	-

II. 	Softwood 	Lumber 	Products 	from 	Canada: 	Countervailinq 	Duty
Department 	of 	Commerce
Prehearing 	Brief 	by 	the 	Federal 	Trade 	Commission
(A p r i 1 	7, 	1983 )
III. 	Color 	Television 	Receivers 	from 	the 	Republic 	of 	Korea 	and
Taiwan: 	Antidumpino
International 	Trade 	Commission
Brief 	by 	the 	Federal 	Trade 	Commission 	(May 	31, 	1983)
IV. 	Certain Vertical 	Milling 	Machines 	and 	Parts, 	Attachments 	and
Accessories 	Thereto: 	Unfair 	Practices
International 	Trade 	Commission
Comment 	by 	the 	Federal 	Trade 	Commission 	Opposing 	an
. Exclusion 	Order 	(January 	9, 	1984)
V. 	Carbon 	and 	Certain 	Allov 	Steel 	Products: 	Escape 	Clause
International 	Trade 	Commission
Prehearing 	Brief 	by 	the 	Federal 	Trade 	Commission 	(May 	3,
1984)
Posthearing 	Brief 	by 	the 	Federal 	Trade 	Commission
(May 	18, 	1984)
Prehearing 	Brief 	on 	Remedy, 	the 	Federal 	Trade 	Commission
(June 	15, 	1984)
Posthearing 	Brief 	on 	Remedy, 	the 	Federal 	Trade
Commission 	(June 	29, 	1984)
Office 	of 	the 	United 	States 	Trade 	Representative, 	Trade
PolicY 	Committee, 	and 	Trade 	Policy Staff 	Committee
Brief 	by 	the 	Federal 	Trade 	Commission 	on 	Section 	201
Investigation 	Regarding 	Imports 	of 	Carbon 	and 	Alloy
Steel 	(August 	10, 	1984)
- 	24 	-

VI. 	Unwrouoht 	Cooper: 	Escaoe 	Clause
International 	Trade 	Commission
Prehearing 	Brief 	by 	the 	Federal 	Trade 	Commission 	(May 	8,
1984)
Posthearing 	Brief 	by 	the 	Federal 	Trade 	Commission
(May 	23, 	1984)
Trade 	Policy Staff 	Committee
Brief 	by 	the 	Federal 	Trade 	Commission 	Regarding
Recommendations 	of 	the 	International 	Trace 	Commission 	on
Unwrought 	Copper, 	Investigation 	No. 	TA-201-S2 	(August 	2,
1984)
VII. 	Certain 	Canned 	Tuna 	Fish: 	Escape 	Clause
International 	Trade 	Commission
. Prehear ing 	Brief 	by 	the 	Federal 'I'rade 	Commission
(May 	29, 	1984)
Posthearing 	Brief 	by 	the 	Federal 	Trade 	Commission
(June 	18, 	1984)
- 	25 	-