The New York Times

January 28, 1990, Sunday, Late Edition - Final

SECTION: Section 3; Page 13, Column 1; Financial Desk

LENGTH: 722 words

No Justice in Anti-Dumping

BYLINE: By JAMES BOVARD; James Bovard, the author of ''The Farm Fiasco,'' is
working on a book on ''The Myth of Fair Trade.''

While American politicians lecture the world on fair trade, our dumping laws
are an inquisitorial nightmare for foreign companies, making a mockery of due
process and justice at every turn. In the last 17 years, Congress and the
Commerce Department have repeatedly expanded the definition of dumping. Between
1980 and 1986, the Commerce Department found only 6 percent of all imports it
investigated not guilty of unfair trade practices.
The New York Times, January 28, 1990

Dumping occurs when a company charges a lower price for a product in an
export market than in its home market. But anti-dumping laws are a relic of the
days of fixed exchange rates. The Commerce Department will convict a foreign
company for a price difference as small as one-half of 1 percent between its
American and its foreign prices - yet the dollar routinely fluctuates 10 or 15
percent in value a year. Although Commerce Department officials treat dumping as
a self-evident crime, it is often solely the result of fluctuating currency
exchange rates that may be totally unrelated to trade trends.

The Commerce Department allows itself great latitude in how it administers
the dumping law. In 1984, an Italian company was convicted of a dumping margin
of 1.16 percent on its exports of pads for woodwind instruments. The Commerce
Department deduced the 1.16 percent by comparing the prices of a smaller
woodwind pad sold in the United States with a larger woodwind pad sold in Italy.
Since the smaller pad sold for a lower price than the larger pad, Commerce
Department found the Italian company guilty.

Even if a company sells its products in the United States for exactly the
same prices as in its home market, the Commerce Department can nail the company
for dumping. How? It compares the average foreign price over a six-month period
with individual American sale prices. Naturally, product prices vary over time
and in different locales. If any of a company's American prices fall below the
The New York Times, January 28, 1990

average foreign price, Commerce can slap a duty on all its imports.

In the 1980's, the Commerce Department has increasingly relied on
cost-of-production proofs to prove that foreign companies are dumping their
products in the United States at below the alleged cost of production. But,
Commerce Department cost analyses are straight out of ''Alice in Wonderland.''
American trade law requires that the Commerce Department always assume a foreign
company makes an 8 percent profit. If a foreign company shows a profit of 7
percent, then the Commerce Department convicts the company for selling at a loss
of 1 percent.

Once a company is convicted of dumping, the Commerce Department can
effectively keep the company under economic house arrest for the next 15 years.
While Australian and Canadian dumping laws have sunset provisions that
automatically end the protection provided by dumping duties after five years,
the Commerce Department has succumbed to domestic political pressure to
perpetuate dumping orders long after the alleged dumping has ended.

To be hit by a dumping order can easily cripple a foreign company, especially
since the Commerce Department can inflate the dumping margin in an annual
review. In August 1989, the Department announced that a Japanese ball-bearing
company must pay duties of 67 percent - for bearings it exported between 1974
The New York Times, January 28, 1990

and 1979.

Commerce is judge, jury, prosecuting attorney, and executioner, as Washington
trade lawyer David Palmeter told this author. The Commerce Department can demand
practically an infinite amount of information - and any refusal to comply is
taken as a confession of guilt, after which it imposes the highest possible
dumping margins. The Commerce Department collects vast amounts of confidential
information from foreign businesses and has frequently allowed this information
to fall into the hands of American competitors.

While other nations are calling for a General Agreement on Tariffs and Trade
agreement to trim or gut dumping laws, the American Government is almost alone
in advocating making dumping laws more punitive and protectionist. Yet, outside
the United States, American companies get hit by dumping penalties more than any
other nation's companies. The more oppressive our dumping laws become, the more
likely that it is that foreign nations will copy our laws and clobber American





The New York Times

February 18, 1990, Sunday, Late Edition - Final

SECTION: Section 3; Page 13, Column 1; Financial Desk

LENGTH: 301 words

HEADLINE: The Anti-Dumping Laws Do Work

BODY: To the Editor:

As administrator of the United States anti-dumping statute at the Commerce Department, I wish to note that in ''No Justice in Anti-Dumping'' James Bovard misstated department practice in several places (Forum, Jan. 28).

Most troubling was his assertion that the department has disclosed confidential information from foreign businesses to their American competitors. This is untrue. There are stringent rules to protect proprietary data, and sanctions to insure compliance. The integrity of this process lets us collect proprietary information and base dumping calculations on company-specific data.

And the criticism of the department's administrative review process is unfounded. Rather than inflate margins, it is designed to insure that dumping margins reflect up-to-date pricing practices. Once an order is issued, the department does not keep foreign firms ''under economic house arrest for the next 15 years.'' If no dumping margins are found three years in a row, anti-dumping orders can be lifted; more than 80 have been since 1980.

The article contains no recognition that anti-dumping regimes have their foundation in the GATT and are designed to deal with unfairly traded imports that injure a domestic industry. Other governments administer similar regimes, some with considerably less due process. The United States is addressing that problem in the current Uruguay Round of Multilateral Trade Negotiations.

The dumping law is an effective, internationally accepted way to handle unfair trade. It is complex and not perfect. But for American businesses there is justice in knowing that effective relief from unfairly traded goods is available.

ERIC I. GARFINKEL Assistant Secretary for Import Administration,

(c) 1990 The New York Times, February 18, 1990

Department of Commerce Washington, Feb. 1




LEVEL 1 - 160 OF 257 STORIES

Copyright (c) 1990 The New York Times Company;

The New York Times

February 11, 1990, Sunday, Late Edition - Final

SECTION: Section 3; Page 13, Column 1; Financial Desk

LENGTH: 324 words

HEADLINE: Unfair Swipe at Anti-Dumping

BODY: To the Editor:

James Bovard's article (''No Justice in Anti-Dumping,'' Jan. 28) presents an inaccurate description of laws designed to promote fair competition. As one who has had 20 years' experience in this field, my view of the anti-dumping laws is quite different:

1. The United States anti-dumping law is entirely consistent with the international Anti-Dumping Code, which is part of the General Agreement on Tariffs and Trade.

2. The Commerce Department adjusts for changes in exchange rates, so it is highly unlikely that exchange-rate changes alone will result in dumping charges.

3. Contrary to Mr. Bovard's impression, Commerce collects a large number of sample prices before it determines whether dumping has occurred.

4. Mr. Bovard suggests that Commerce has ''succumbed to domestic political pressure to perpetuate dumping orders long after the alleged dumping has ended.'' Untrue. If foreign producers stop dumping, the annual review process will reduce the duties to zero and foreign producers can petition to have the case terminated.

5. If a foreign company refuses to provide information to the Commerce Department, the Government does not impose ''the highest possible dumping margins.'' It will use the ''best available information,'' which may be allegations in the domestic industry's petition, collected through extensive research.

6. The nations urging changes in the GATT are those that repeatedly have been found guilty of violating American trade laws. Little wonder.

(c) 1990 The New York Times, February 11, 1990

7. Mr. Bovard cites a dumping case involving woodwind instruments, perhaps selected because of its limited impact on trade. However major industries such as steel, electronics, agricultural commodities, footwear, vehicles, televisions all have destinies directly linked to relief from unfair trade practices under American and international laws.

DAVID A. HARTQUIST Collier, Shannon & Scott Washington, Jan. 29

TYPE: Letter