RUSSELL B. LONG* United States Law and the International Anti-Dumping Code On June 30, 1967, the United States entered into an executive agreement with 17 other nations establishing an International Anti- dumping Code.' The President's Special Trade Representative signed this agreement unconditionally and without reservation, on the ground that nothing contained in it conflicted with domestic law. Each of the other signatories, however, signed subject to approval by its parliament. The agreement went into effect on July 1, 1968, although not all signatories had implemented the Code as of that date 2 On September 9, 1968, the Senate acted to suspend United States participation in the Code, by an amendment to this effect to House bill 17324 (the Renegotiation Amendments Act of 1968). After the House disagreed with the Senate amendment, the matter went to a conference at which a compromise was reached. The compromise, enacted as Title II of Public Law 90-634, approved October 24, 1968, in effect permits domestic application of the provisions of the Code only to the extent that they (1) do not conflict with domestic law, and (2) do not limit the discretion of the Tariff Commission in its injury-determination function under the Antidumping Act of 1921. * United States Senator from Louisiana, Chairman, Senate Committee on Finance. 1 The other signatories are Belgium, Canada, The Netherlands, Luxembourg, France, Federal Republic of Germany, Italy, Czechoslovakia, Greece, Denmark, Norway, Sweden, Switzerland, Finland, The United Kingdom, Japan and Yugoslavia. 2 The most important signatory, as far as United States trade is concerned, is Canada, whose parliament had not ratified the Code on July 1. The Canadian Government informed the United States that although legislation necessary to implement the Code could not be enacted before July 1 due to the dissolution of Parliament for elections, it "is prepared to undertake that not later than 1 January 1969, it will bring its laws, regulations and administrative procedures into conformity with the Agreement." However, it has been reported in the press (Journal of Commerce, November 8, 1968) that "Canada's proposed antidumping legislation will not contain a definition of injury caused by dumping." This would mean that Canada will not adopt the definition of injury specified by the International Antidumping Code. International Lawyer, Vol. 3 No. 3 U.S. Law and the Int'lAnti-Dumping Code What motivated Congress to limit U. S. implementation of this executive agreement? Obviously, there were compelling reasons, the basic one being that the Code's provisions might have had the effect of changing domestic Federal statutory law, without the approval of the Congress. A background on the nature of dumping in international trade and on United States laws dealing with dumping, and a comparison between the Code and the Antidumping Act, form a helpful prelude to discussion of the impact of the Code on our internal law. Nature of "Dumping" and Antidumping Act of 1921 Dumping, in a foreign-trade sense, occurs whenever there are (or are likely to be) "sales at less than fair value" of foreign merchandise in the United States, causing (or likely to cause) injury to a domestic industry. Concern for providing a remedy against injurious dumping by foreign producers dates far, back in American history. In the years immediately after the War of 1812, Americans were already accusing English manufacturers of "deliberately dumping their products in the United States in order to crush out new industries which had developed during the war." 3 Judging from the following statement of Henry (later Lord) Brougham in the House of Commons on April 9, 1816, these fears were justified: It was well worthwhile to incur a loss upon the first exportation, in order, by the glut, to stifle in the cradle those rising manufactures in the United States which the war had forced into existence contrary to the natural course of things.4 During the early years of the present century, there were widespread fears that large, well-financed trusts and cartels were selling their products at lower prices in foreign markets than at home, in order to dispose of excess stocks or to lower their unit costs. As a result of these fears, antidumping statutes were enacted in Canada in 1904, in Australia in 1906, in South Africa in 1914, and in the United States in the Revenue Act of 1916. 3 VINER, DUMPING: A PROBLEM IN INTERNATIONAL TRADE 39 Chicago: University of Chicago Press (1923). 4 XXXIII Hansard, 1st Series (1816), 1098-99. InternationalLawyer, Vol. 3 No. 3 466 INTERNA TIONA L LA WYER Under the 1916 Act, "predatory" dumping in the United States is prohibited, and criminal penalties are provided.' That Act has not worked well as a deterrent to dumping generally, mainly because it is limited, in its criminal aspect, to "predatory" dumping, a concept difficult to prove in a criminal case. Also, United States jurisdiction over acts committed abroad designed to affect commerce in this country, had not yet been established. 6 After it became clear that the 1916 Act did not offer a realistic remedy, the Tariff Commission was requested to report to the House Ways and Means Committee on the operation of the Canadian antidumping law.7 The Commission reported that the Canadian law seemed to have operated successfully as a check on dumping, although it was questionable whether the same enforcement procedures would work in the United States.8 In 1921, a new antidumping bill was passed by the House and referred to the Senate Finance Committee. Like the Canadian law, the new bill would have assessed special dumping duties against any kind of dumping in competition with a domestic industry, without requiring a showing of injury. Dumping duties were to be imposed simply if the "dumped" goods were competitive with articles produced in the United States. An injury requirement was incorporated into the bill by the Senate Finance Committee, but the Committee report indicates that this was done to facilitate administration of the Act, not to restrict its operation. A representative of the Customs Service had testified that it would be impossible to enforce the House bill with their present staff, because it would require that every importation be checked for dumping, and this in turn would require that the home market value of 5 39 Stat. 798, 15 USC 72. The law stipulates for imposition of a $5000 fine, or imprisonment not exceeding one year, or both. In addition, injured parties may sue for treble damages. There has been only one reported case under this statute, and it did not involve a substantive determination. H. Wagner & Adler Co. v. Mali, 74 F.2d 666 (CA 2-1935). However, the law has never been repealed. 6 American Banana Company v. United Fruit Company, 213 US 347 (1909). 7 The Canadian Act provided for the assessment of dumping duties on any import for sale at less than fair market value, if a comparable article was produced in Canada. 8 The Commission pointed out that the Canadian law was aimed largely at United States firms, and that the Canadian authorities had developed dependable sources of information in the United States. The United States, on the other hand, was faced with dumping by countries in Europe and Asia, where information on prices and costs was far more difficult to acquire. International Lawyer; Vol. 3 No. 3 U.S. Law and the Int'lAnti-Dumping Code every importation be checked in the exporting country. In its report on the bill, the Committee noted that the purpose of its amendment was to relieve the Customs Service of the necessity of examining every importation for possible violation of the statute.9 The House conferees agreed to the amendment, and the act was passed.' 0 Discussing the foregoing legislative history, in Orlowitz Co. v. United States, 47 Cust. Ct. 583, 590 (1961), aff'd 50 CCPA 36, the court said: There was no suggestion, as we read the Senate proposal and proceedings, of intention either to limit or enlarge the concept of "injury" intended in the House bill, where the mandate was to each individual appraising officer in his own district. Mere intention to improve administration is not persuasive of an intention to change the scope of the law. The clearly expressed intention was to facilitate administration, and no intention was expressed other than to do that. This is persuasive of a legislative intention that the basic objectives were not to be changed. In addition to the Antidumping Act of 1921, and the Revenue Act of 1916, the price-discrimination aspect of dumping is dealt with in the Sherman Antitrust Act of 1890 (15 USC 1), the Wilson Tariff Act of 1894 (15 USC 8), the Federal Trade Commission Act of 1914 (15 USC 45), and Section 337 of the Tariff Act of 1930 (19 USC 1337). However, the principal comparisons herein, between the International Antidumping Code and United States law, will be made with reference to the Antidumping Act of 1921. It is sufficient to say at this point, that Congress has declared price discrimination in domestic and foreign commerce to be unlawful; but since it is virtually impossible to prosecute foreign producers guilty of dumping, Congress has provided an alternative remedy in the form of special dumping duties imposed on the offending goods under the Antidumping Act of 1921. Virtually all proceedings since 1921 have been brought under this Act. Under that statute, the Treasury Department has the responsibility of determining whether [or not] there has been price discrimination, 9 "The House bill made it necessary for the appraising officers to look for dumping in the case of each importation of merchandise, and, in the case of merchandise procured otherwise than by purchase, required a bond of the importer that would obligate him to furnish the collector upon the sale of the merchandise the selling price of the merchandise and to pay additional dumping duties that might be found due.