NAFTA re-opens the debate

NAFTA re-opens the debate
Published: 29 June 2005

The NAFTA Panel reviewing the ITC’s 2000 Sunset Review Decision today remanded the case to the ITC ordering the ITC to re-evaluate its decision under the correct legal standards, and with further analysis and explanation.  The NAFTA Panel has issued extremely clear and tight instructions as to how the ITC must conduct its remand proceeding, and the further analysis and evaluation it must provide to the NAFTA Panel, within 60 days from 24th June 2005.

First, as to the main legal issue in the case, the Panel has instructed the ITC to apply the correct legal standard:  that is, that the word "likely" means "probable," and not something less than probable.   U.S. law permits the ITC to continue an antidumping order after a sunset review only if the ITC properly determines that a recurrence of material injury is "likely" in the reasonably foreseeable future if the antidumping order were revoked.  Since our case is an unusual "regional industry" case, it was also necessary for the ITC to properly determine that such injury would be likely to affect producers of "all or almost all" regional production.  We argued that the ITC did not define "likely" as probable, and the Panel has now ordered the ITC to apply the correct "likely as probable" standard.

Second, the Panel has also remanded each of the ITC’s three critical factual determinations which supported its finding of likely injury to all or almost all.  The Panel has remanded the ITC’s determinations on likely volume increases, likely adverse price effects, and likely adverse impact on the regional industry if the order were revoked.  The Panel has provided the ITC with very specific instructions as to the additional analyses and explanations which the ITC must now provide to the Panel.  For example, the Panel has instructed the ITC to explain how it could have reached its injury decision when it also determined that the same industry was not in a "vulnerable" state.  The Panel has also instructed the ITC to explain how the decline in the regional industry’s market share caused by increased market demand was not attributable to imports from third countries.  The Panel also issued extremely tough instructions on the issue of "all or almost all" -- essentially requiring the ITC to provide a very high level of detail to justify key conclusion. Perhaps most importantly, the Panel has ordered the ITC to evaluate "fully" CEMEX’s acquisition of Southdown, which was announced prior to the ITC’s Sunset Review decision.