The Role of the US International Trade Commission

The U.S. International Trade Commission (ITC) is a quasi-judicial organization led by a bi-partisan team of six commissioners, appointed by the President and confirmed by Senate. They serve nine-year-terms, and their mission is to administer U.S. trade remedy laws fairly and objectively, while also advising the President and Congress on matters regarding competitiveness and international trade.

The ITC website summarizes its mission with this statement: “the Commission serves the public by implementing U.S. law and contributing to the development of sound and informed U.S. trade policy.”

 

How and Why Was the ITC Established?

The ITC traces its origins back to 1916 with the formation of the U.S. Tariff Commission. As international trade burgeoned alongside economic growth in the early 1900’s, there emerged an increased push for laws designed to protect U.S. industries from unfair foreign competition. Political intervention produced the Tariff Act of 1930, from which the ITC derives its statutory authority.

Some time later, in 1974, President Gerald Ford sought an efficient way to negotiate tariff agreements at the Tokyo Round at the General Agreement on Tariffs and Trade (GATT) Convention. Congress responded by passing the Trade Act of 1974, which gave the President fast track authority to put together deals that Congress could neither amend nor filibuster. Before the Trade Act of 1974, it literally took an act of Congress to negotiate any trade agreements.

Since the President could not possibly — then or now — keep up with every aspect of U.S. Trade Policy, the administration relies heavily on the ITC to make recommendations and to keep track of quickly evolving trends in trade.

 

The International Trade Commission in Practice

The ITC has become a popular forum for trade disputes because its decisions carry the rule of law, and cases are heard and decisions passed down much faster than in US District Court. The ITC can conduct an investigation and make a ruling in just a few months, whereas a trial can last years. To provide a context for the ITC’s role in practice, we’ll take a look at a couple of fairly noteworthy ITC cases.

In a case focused on protecting domestic businesses from unfair foreign competition, the ITC heard a case in March 2003 that now protects U.S. manufacturers from a practice called “dumping.” That year, Ward Manufacturing, one of only two makers of non-malleable pipefittings used for industry standard fire sprinklers, asked the ITC to impose duties on imports of non-malleable cast iron pipefittings from China. Ward Manufacturing claimed that Chinese manufacturers were dumping cheap pipefittings in the U.S. market at lowball prices, which unfairly threatened to run Ward and their 850 employees out of business. The ITC ruled in the favor of Ward Manufacturing and leveled the playing field by imposing a duty on the import of non-malleable pipefittings from China.

In January 2006, the ITC went after ChoicePoint, a company that compiles and sells data about consumers (names, Social Security numbers, birth dates, employment information, and credit histories). While it is legal to compile and sell this kind of information, the ITC found ChoicePoint was careless in allowing consumer’s personal info fall into the hands of criminals. As a result, the Commission forced ChoicePoint to settle to the tune of $10 million in civil penalties and $5 million in consumer redress for violating federal privacy law. In this case, the good being “traded” was information, and the ITC was acting within its role of protecting consumer privacy.

 

The ITC’s Tricky Mission

The ITC is designed to protect domestic business, while at the same time promoting competition and fair trade worldwide. An obvious conflict of interest arises: since the ITC is funded by US tax payers and has a vested interest in protecting US business, how far can it actually go in remaining fair to foreign competitors?

Some foreign companies and even former members of the ITC have started to become more outspoken on this issue, in some instances calling into question ITC’s practices and legitimacy on the global stage. In a future post on the ITC, we’ll examine some of these expressed concerns in greater detail.

Quandary Peak Research

Based in Los Angeles, Quandary Peak Research provides software litigation consulting and expert witness services. We rapidly analyze large code bases, design documents, performance and usage statistics, and other data to answer technical questions about the structure and behavior of software systems.

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