The United States implements import relief (or a safeguard action) under Section 201 of the Trade Act of 1974. These actions are in accordance with GATT Article XIX and the WTO Safeguards Agreement. United States trade law in this area sets forth the authority and procedures for the President to take action by determining if “an article is being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or threat thereof, to the domestic industry producing an article like or directly competitive with the imported article.”
A second important import relief mechanism is the special safeguard that helps U.S. industries and workers deal with import surges from China. This mechanism, found in Section 421 of the Trade Act of 1974 as amended, is available to the United States (and other WTO Members) for 12 years after China’s accession, or until December 11, 2013. This mechanism is distinctive because it is China specific, meaning that it allows the United States to apply safeguard measures that are targeted solely at Chinese products (rather than at imports from all countries, as is normally required by WTO rules).
The process for both safeguard mechanisms is similar. Following the receipt of an appropriate petition, the International Trade Commission (ITC) conducts an analysis to determine whether relevant imports are, or threaten to be, a substantial cause of injury to domestic industry. If a positive determination is made, the ITC then makes recommendations as to the type of remedy that could be used to provide for import relief.
Once a final ITC recommendation is made, the inter agency group must also formulate its recommendation to the President. MAS’s Office of Trade Policy Analysis (OTPA) has the lead on coordinating the ITA position on both global (Section 201) and China specific (Section 421) safeguard issues. OTPA coordinates with staff from MAS industry offices, IA, MAC, and OGC in assessing whether import restrictions will improve the competitiveness of U.S. industries and, if so, what remedies should be imposed.
OTPA draws on industry analyst expertise, empirical economic analysis, including economic modeling, and input from IA, MAC, and OGC in this process. Once an ITA consensus is reached, it and other agencies will vote on an inter agency recommendation to the President. The President then makes the final decision regarding the implementation of import relief.