APPENDIX A "Presently, the only formal means of seeking administrative review of decisions made by the Customs Service is to file a protest or petition. Protests may be filed only by the importer or consignee of the merchandise subject to the protested Customs action, by their agents,1 or by person to whom merchandise placed in a bonded warehouse has been transferred.2 A petition may be filed only by a U.S. manufacturer, producer, or wholesaler of the same class or kind of merchandise as that affected by the Customs action challenged. Moreover, the petition procedures allow challenges to only three types of action: "(1) decisions concerning the classification or appraised value of, or rate of duty on, merchandise; "(2) decisions not to impose countervailing or antidumping duties; and "(3) determinations that merchandise is not being, or is not likely to be sold at less than fair value under the Antidumping Act of 1921, or has not received a bounty or grant under the Countervailing Duty Act. U.S. manufacturers, producers, and wholesalers seeking to challenge Customs actions concerning a class of merchandise in which they do not deal, and other persons wishing to challenge Customs action through the administrative process, have no means of doing so. "Similar limitations restrict standing to seek judicial review of Customs actions. The Customs Court has no jurisdiction to review Customs action unless a protest or petition has been denied by Customs. District courts may take jurisdiction over Customs actions that are not in the exclusive jurisdiction of the Customs Court, but the Customs Court, because of its expertise and continuing control of Customs actions, would provide a better forum for review. Moreover, district courts have no jurisdiction over actions subject to a protest or petition procedure (since review of such actions is exclusively in the Customs Court) even if the plaintiff is not authorized to file a protest or petition. In short, many persons who may be adversely affected by decisions of the Customs Service have no effective means of challenging those decisions at either the administrative or the judicial level." Mr. ROBERT E. CHASEN, Commissioner of Customs, U.S. Customs Service, FEBRUARY 22, 1978. DEAR MR. CHASEN: The AFL-CIO opposes Treasury's proposed changes in the regulations for enforcement of the Antidumping Act against imports of products from Communist countries. These changes, published in the Federal Register on January 9, 1978, would allow Treasury to set lower charges against imports dumped by communist countries in the United States than those now required by law. The AFL-CIO recommends that this unfair proposed change be withdrawn. Dumping means selling a product in the United States at less than fair value or less than the market price in the exporting country's market. When a United States industry is hurt by dumping of imports, the law directs Treasury to put on a tariff to offset the unfair and illegal dumping price. Dumping is an illegal practice under the United States Antidumping Act of 1921, as amended, and international agreements. Communist countries have no equivalent of “fair market value" in a market pricing system, because their prices are set by government regulation. To determine dumping values, therefore, the Treasury established a practice of using prices charged for a similar product in a non-communist country where market prices exist. In Section 321(d) of the Trade Act of 1974, Congress made this practice part of the United States antidumping law. In 1976, Customs amended the regulation, 19 CFR Part 153.7, to conform with that law. 1 19 U.S.C. sec. 1514 (1970). 2 Id. sec. 1557(b). 3 See, e.g., Timken Co. v. Simon, 539 F. 2d 221 (D.C. Cir 1976) (suit to challenge failure to withhold appraisement under the Antidumping Act). 4 See, e.g. Consumers Union of the United States, Inc. v. Comm. for the Implementation of Textile Agreements. No. 76-1064 (D.C. Cir Apr. 20, 1977) petition for rehearing denied (D.C. Cir Sept. 2, 1977) (discussed in text accompanying notes 253-55 infra): Kocher v. Fowler, 397 F. 2d 641 (D.C. Cir 1967), cert. denied, 391 U.S. 920 (1968) (discussed in note 257 infra). Source: Peter M. Gerhart, "Judicial Review of Customs Service Actions" Law and Policy in International Business, vol. 9, No. 4, 1977, pp. 1162 and 1163. Now Treasury seeks to modify that ruling and allow Treasury officials to construct the appropriate value abroad in one of three ways: First, actual sales price in a country with "compaarble" economic development to the communist country. AFL-CIO opposes this because no realistic comparisons of economic development levels between market and non-market economies can be objectively established. Furthermore, a product can be dumped in the United States from an underdeveloped country. The level of economic development does not determine whether or not an unfair or illegal price is established. Second, if no "comparable country" exists which produces the product, Treasury could set up a "constructed value" based on costs of the product in a nonstate controlled country. But that value could be "adjusted for differences in economic factors" to meet the "comparable" country standard. The AFL-CIO opposes this because it would call for non-objective determinations by Treasury. The price in a dumping case is a market price of a productnot a constructed or theoretical price. Third, if no "comparable country exists", Treasury can set up hypothetical costs for "constructed value" which then can be adjusted for differences on the basis of "specific objective components" or factors of production. "Such specific components or factors of production, including, but not limited to, hours of labor required, quantities of raw materials employed, and amount of energy consumed, will be obtained from the state controlled economy under consideration." Then the Secretary of the Treasury would be empowered to determine whether or not "verification of these figures in the "state-controlled economy" meet his "satisfaction", and, if so, these would be "valued in a non-state-controlled economy determined to be comparable in economic development. (b) (2). (153.7 The AFL-CIO opposes this because it is non-objective and because it would set up an ever-larger bureaucracy to determine hypothetical information. Again, dumping is sale in a market economy and must relate to real market prices. Dumping is not a theoretical problem for American workers. It is a hard, unassailable, job destroying fact. Imports of glass, shoes, golf carts, bicycles, have been dumped at the expense of United States workers. Now more sophisticated equipment such as aircraft engines, computer parts, etc., are coming in from communist countries and costing United States jobs. Any regulation to reduce the penalties for illegal dumping of these products is against the best interests of the United States and a mockery of United States' law. The Treasury Department has not justified any change in the current regulation 153.7 and 153.27 which now conform with United States law. The AFL-CIO urges withdrawal of the proposed changes. Sincerely, RUDY OSWALD, Director, Department of Research. Mr. OSWALD. The proposed Treasury ruling would allow the Treasury Department to construct the theoretical value of imported products for assessment. S. 2857 would deny any appeal to the courts of the Treasury determination. The markings case, brought by the IUE, urged that the country of origin on certain consumer electronic products be marked conspicuously. Treasury had allowed importers to mark these items so that consumers would not necessarily be able to see the marking. Despite many protests, Treasury failed to require importers to clearly mark the country of origin on the imported merchandise. S. 2857, section 2639 states: The decision of the Secretary of the Treasury or his delegate, is presumed to be correct. The burden to prove otherwise shall rest upon the party challenging a decision. Thus even where the right of appeal is granted in S. 2857, however, the burden of proof is on the injured and there is a presumption that he is wrong. Thus the unemployed worker or firm which has been hurt by imports is required to prove a case but the Government official who has already decided against him is presumed to be correct. Furthermore, the Government official decides what information to release to the injured party so that the case can be proved. The combination of asking workers to get information that the Government refused to collect and need not divulge if it does collect it, is unfair. To add insult to injury by making it a legal presumption that the decision against them is correct is a denial of the fundamental concept on which justice should be founded. In short, this provision makes a mockery of the stated intent of the statute. Some examples of recent experiences may explain our concern. The International Brotherhood of Electrical Workers has spent time and effort to call attention to problems for workers in the law's failure to have special classifications for various imported parts. One example of such a classification problem was horns for smoke detectors. IBEW members made these parts. Customs officials have no separate classification for these parts and showed little concern for the issue. The union believes that because the company in the case of these horns decided to help provide import reports, the information was made available and some of the laid-off workers received adjustment assistance. But it is often very difficult for workers to obtain proof necessary for adjustment assistance-particularly if the company that they work for produces the part overseas and their imports then destroy the jobs in the United States. The Trade Act of 1974 promises relief to workers who lose their jobs because of imports. S. 2857 would give to the Customs Court the jurisdiction for considering appeals under the Trade Act for adjustment assistance. S. 2857 gives exclusive jurisdiction to the Customs Court to review any decision of the Secretary of Labor or the Secretary of Commerce that certified or refused to certify workers, communities, or businesses as eligible for adjustment assistance under the Trade Act of 1974 (section 1546 (d)). The Customs Court has no special competence to review the impact of imports on U.S. jobs and production. Yet these are the adjustment assistance issues which S. 2857 would turn over to people whose specialty is the appraisement of imports and their value, not their effect, on communities and towns and businesses and jobs throughout America. Section 1583 also raises questions: (a) The Customs Court shall possess exclusive jurisdiction, except as otherwise provided by law, to review final agency action of any agency of the United States which directly affects imports into the United States. For purposes of this section, the terms "agency", "agency action", and "final agency action" are utilized in the same manner as those terms are utilized in sections 551 and 704 of Title V, United States Code. Nothing in this section shall be construed to create a cause of action, or to permit the maintenance of a suit not otherwise permitted by law. Nothing in this section shall affect limitations on judicial review or the power or duty of the court to dismiss any action or to deny relief on any other appropriate legal or equitable grounds. The United States should be concerned about the impact of imports--not merely the actions of U.S. agencies that could affect imports. Such protection of importers' concerns is unrealistic. Section 1583 also provides for review of decisions by the International Trade Commission, the Special Trade Representative under 201 and 301 of the Trade Act. These are decisions about impact and procedure-not just about imports. Let me note that it is especially disturbing to the AFL-CIO and to others who are interested in the costs as well as the benefits of international trade that working people are usually ignored in customs discussions. Merely giving labor the right to sue will not cure this problem. We are surprised that workers and unions were not included by the draftsmen in this bill as having the right to sue in customs matters. Mr. Chairman, we agree that everyone should have a chance in court. But the objective of Government and courts should be to protect citizens, not just imports. Imports do cost jobs and they do not necessarily reduce prices. Imports can destroy an industry and then allow a foreign monopoly to establish unrealistic prices. This can be inflationary as the recent devaluation of the dollar has been inflationary by making imports more expensive. It is time to dismiss the obsolete belief that the consumer is automatically benefited by imports regardless of other factors. We urge this subcommittee to make sure that statutes of this Nation recognize that most citizens would like to have a job to go to and that there are many complex problems that go beyond the expertise of customs specialists. An article by Peter Gerhart, "Judicial Review of Customs Service Actions," published last year in "Law and Policy in International Business," illustrates this lack of concern for the working people. The article devoted over 80 pages to this subject without emphasizing the existence of labor or the impact of imports on American jobs. The author recognizes rights of some "persons who buy merchandise from importers: manufacturers, wholesalers, retailers, and consumers." He is properly concerned because Such persons are not authorized to file a protest or petition or otherwise challenge a Customs action despite the fact that they may be injured by the actions *** For example, decisions concerning duties directly affect the price of merchandise and decisions to exclude merchandise directly affect both availability and price. We also agree with concern about the failure of the courts to review a protest by Consumers Union against the textile quotas: In Consumers Union of the United States, Inc. v. Comm. for the Implementation of Textile Agreements, for example Consumers Union brought suit in a district court to challenge textile quotas imposed by the President under Section 204 of the Agricultural Act of 1956. After questioning the plaintiff's standing to sue in federal court, the Court of Appeals directed dismissal of the case because the subject matter-exclusion of merchandise under a customs law-was within the exclusive jurisdiction of the Customs Court. However, the Customs Court may not be able to hear the case. If Consumers Union itself does not import the textiles subject to a quota, it may not file a protest against the exclusion of the textiles, and therefore, may not seek review of the exclusion in the Customs Court. Under these circumstances, there may be no court available to adjudicate the claim made by the Consumers Union. Until the Congress and the courts of the United States begin to recognize that international trade now affects all parts of this Nation and creates both costs and benefits, proposed changes in judicial machinery will not be for the benefit of ordinary citizens. No statute that reduces the right of appeal will benefit them. 32-626 - 78 - 15 Jobs of U.S. citizens, the tax base of the cities where they live, the productive well-being of the U.S. economy and the future of American technology-all are affected by international trade. We urge this subcommittee to recognize this reality and to include the following concepts in any legislation to cure and prevent injustices: One, international trade should be viewed as a question affecting labor, business, and the public. Imports affect far more than importers, foreign governments, and consumer interests. They affect the Nation and its work force and small business. The impact of imports and trade are properly the subject for courts of broad jurisdiction. Two, unfair practices now carried out in the Customs Service should be changed. There should be a chance for fair treatment to importers and producers, with fair rules of procedure and the right to a day in court. Customs valuation should be carried on by those best qualified to handle it. Three, decisions by the executive branch-the President, his delegates, and the Secretary of the Treasury and his delegate should be subject to court review. Four, decisions by Government agencies about trade issues should be appealable in the courts, not merely in Customs Courts. We call the subcommittee's attention to other customs issues now affecting this and other bills. Other customs laws should be meshed with changes in the judicial machinery. The Customs Procedural Reform Act has now been passed in both Houses and is in conference. The problem of enlarging the power and rights of Customs and Treasury Department officials needs careful review. Adequate review machinery is even more serious now. Customs Courts should handle matters where their expertise is necessary but not other trade issues. While international negotiations on customs valuation and other procedures for U.S. international trade are going forward, changes in the U.S. customs jurisdiction might be regarded as giving special rights to importers, rights that amount to concessions to foreign producers. Changes should await the end of negotiations. Mr. Chairman, the appendix A to which I previously referred is included in the materials that I have already submitted to you for the record. Thank you, Mr. Chairman. Senator DECONCINI. Thank you. Senator DECONCINI. Your point is well taken and it concerns the committee that American workers need to have some recourse. Are you proposing that workers or their representatives as unions have the right to sue? Mr. OSWALD. We would hope that the committee would put that in, Mr. Chairman, as well as other actions to protect the rights of workers in terms of other actions besides just customs actions. We are very shocked that they do not have the right today because they often may be losing jobs as a result of these actions. Senator DECONCINI. You are speaking in a broader sense than just this legislation, is that right? Mr. OSWALD. Yes, Mr. Chairman. Senator DECONCINI. As it relates to all imports? Mr. OSWALD. Yes; to all import problems and international trade problems. |