23, 1974, p. 26758] The Secretary gave no explanation of his action, though we are aware that he did so entirely to accommodate the Tariff Commission's view that the LTFV determination should be so limited so as to facilitate the Commission's injury investigation. At any rate, the Secretary thereafter initiated a second hand tool antidumping investigation focused upon specific categories of nonpowered hand tools which had been “dropped" from the scope of the amended determination in the first case. [Federal Register, September 25, 1973, p. 26738] The Secretary again published a determination of sales at less than fair value [Federal Register, September 5, 1975, p. 41155], and, again, the Commission prevailed upon the Secretary to amend and narrow the scope of his LTFV determination to exclude categories of hand tools which the Commission believed not to have been the subject of specific price comparisons in the Secretary's investigation. [Federal Register, October 21, 1975, p. 49111]

Under the Antidumping Act, 1921, as amended, it is the sole responsibility of the Secretary of the Treasury to determine whether a class or kind of foreign merchandise is being, or is likely to be, sold in the United States or elsewhere at less than its fair value. When he makes such a determination he is commanded by the statute to "so advise" the Commission. The Commission, thereupon, has the responsibility to determine whether an industry in the United States is being or is likely to be injured, or is prevented from being established, by reason of the importation of such merchandise into the United States. The Commission has no jurisdiction to participate in, or interfere with, the determination of the Secretary as to sales at LTFV. The Secretary has no right to subordinate his judgment to that of the Commission in making an LTFV determination and in determining the class or kind of merchandise which is the subject of his determination. Thus, the domestic industry producting nonpowered hand tools was deprieved unlawfully of the benefit of the Secretary's initial determination that the entire class of nonpowered hand tools from Japan were being, or likely to be, sold in the United States or elsewhere at less than their fair value. This legal wrong was later to be compounded by the Commission's incorrect application of the Antidumping Act's intended injury test to the facts of the two hand tools cases, and by its arbitrary and capricious findings of fact, which, in each case, are contrary to the weight of the evidence, and indeed, lacking in substantial support in the evidence adduced in the Commission's investigations. We shall refer again to these matters. At the moment, we cite them, particularly the Secretary's initial determination that all nonpowered hand tools from Japan were being, or likely to be, sold in the United States at less than their fair value, as a proper predicate to the inclusion in the pending bills of all TSUS categories of nonpowered hand tools. As in the case of the specific categories which were the subject of the two antidumping investigations by the Commission, imports from Japan dominate total imports in the expanded list of categories which are the subject of the pending bills. In 1976 imports from Japan in all categories specified in the pending bills totaled $71.6 million, compared with $79.7 million for all other countries combined.

So, even though the Commission did not do so in its Memorandum to the Committee, we now offer our determination of the likely or potential effects of the enactment of the pending bill (s) on domestic production, employment, and consumers. The pertinent measurements are presented in the following table.

TABLE 4.-U.S. IMPORTS, DOMESTIC SHIPMENTS AND APPARENT CONSUMPTION OF ALL NONPOWERED HAND TOOLS IN 1976 AS COMPARED WITH A PROJECTION OF CHANGES IN FOREIGN AND DOMESTIC HAND TOOL SHARES OF THE DOMESTIC MARKET UNDER H.R. 139 AND COMPANION BILLS FOR THE PERIOD (ANNUAL RATE) JULY 1, 1977, TO JUNE 30, 1980

[Dollar amounts in thousands]

3 Landed cost of imports determined as specified, note 3, table 3.

4 Shipments for 1976 estimated from use of estimate of total employment in 1976, based on employment as reported in Bureau of Census, Annual Survey of Manufactures, for SIC 3423 in 1974, adjusted by percent change, 1974-76, of employment as reported in BLS, Employment and Earnings, for SIC 3421, 3423, 3425. Shipments then estimated as per formula; shipments, table 3 divided by (employment, table 3 divided by employment, table 4). Projected value in July 1977 to June 1980 of the 1976 derived shipments is based on assumptions stated, note 4, table 3.

5 Apparent consumption, as per note 5, table 3.

6 The 28.4 percent increase in apparent consumption includes the following price increases which may be attributed to the effect of the enactment of the bill: $60,261,000, or 3.3 percent, as a result of price changes incident to import substitution; and $15,281,000, or 0.8 percent, as a result of the increase in duty on imports.

7 Employment in 1976 estimated by Trade Relations Council as per methodology cited note 4 above. The projected employment estimated by use of factor specified note 7, table 3, above.

Source: Foreign trade data, U.S. Department of Commerce, Bureau of the Census, IM-146, EQ-692.

By way of summary under this first topic, the data in Tables 3 and 4 establish that the potential effects of the enactment of the pending bill (s) on domestic production, domestic shipments, imports and import/domestic shipments shares of apparent domestic consumption are as follows:

(a) domestic production (and shipments) will increase by 29% and 30%; (b) imports, fob origin, will decrease by 21%;

(c) the landed costs of imports, duty paid, will increase by 3.4%;

(d) the share of domestic consumption accounted for by imports will decline from 19.4% to 15.6% (a 19.6% decline) for the LTFV impacted specific categories of hand tools, and from 12.7% to 10.3% (a 19.5% decline) for all imports of hand tools covered by the bill, taken as an aggregate.

(b) Potential effects on domestic employment

Employment in domestic hand tool factories will increase by 18.9%, or 2,976 jobs, in the production of the LTFV impacted categories of tools; and 17.6%, or 6,859 jobs in the production of all categories of hand tools covered by the bill (s).

(c) Potential effect on consumers

The enactment of the bill's) likely would result during the period July 1, 1977 to June 30, 1980 in an increase in the U.S. market price for hand tools to consumers, on an annual rate basis, of 4.8% as a result of price changes incident to the substitution of domestic tools for imported tools in the LTFV impacted categories, and 3.3% for the average of all hand tools due to the price effects of import substitution. In addition, the price changes incident to the duty increase alone would likely approximate 1.3% for the LTFV impacted categories of hand tools, but only 0.8% for all hand tools covered by the bill, taken as an aggregate.

(d) The foreign source of imports affected by the bill

In 1976, U.S. imports of hand tools in the categories specified in the bill(s), originated in the following regions of the world:

Thus 97% of U.S. imports originated in Asia and Europe. In 1976, the U.S. had a trade deficit in hand tools with Asia of $79.9 million; and with Europe, of $11.4 million. The details including a country break-out are supplied in the following table:

TABLE 5.-U.S. FOREIGN TRADE IN HAND TOOLS COVERED BY H.R. 139 ET AL, 1976

TABLE 5.-U.S. FOREIGN TRADE IN HAND TOOLS COVERED BY H.R. 139 ET AL, 1976-Continued

Note: Imports include TSUS items 648.53, 81, 85, 89, 91, 93, 95, 97; 649.01, 03, 04, 07, 37, 41; 650.91; 651.21, 23, 25, 27, 29, 31, 37, 47. Exports include schedule B items 695.2210, 20, 30, 40, 50; 695.2304, 08, 14, 18, 25, 40; 696.0925. Source: U.S. Department of Commerce, Bureau of the Census, IM-146, EQ-692.

We have now provided all of the information specified in the Subcommittee's Press Release, PR #9, at page 2 thereof. We now turn our attention to the topics which we shall present in further support of the approval and reporting for legislative consideration of the bill (s) by the Subcommittee and the full Committee:

1. THE REASON FOR THE BILL

The domestic hand tool industry, by its members, is petitioning the Congress for a redress of grievances suffered as a result of the United States International Trade Commission's mishandling of two consecutive antidumping injury investigations. When this Subcommittee held its first budgetary and legislative oversight hearings concerning the Commission in February 1976 we appeared and presented comprehensive testimony explaining our dissatisfaction with the Commission's erroneous determinations in considerable detail. [See Hearing before the Subcommittee on Trade of the Committee on Ways and Means, House of Representatives, 94th Congress, Second Session, February 19, 1976, "Authorization of Appropriations for and on Oversight of the U.S. International Trade Commission" pp. 79-102] Your Subcommittee took no action, however, failing even to comment upon the matter in your report [H. Rep. 94-1088, May 5, 1976]. Thirty-four members of the House of Representatives did pay heed to these grievances, however, and the pending bills have been co-sponsored by them to provide the only corrective action possible, the imposition, on a temporary basis, of an increase in duty proportioned to the margins of sales at less than fair value determined to apply to sales in the United States of hand tools from Japan on specific categories of tools which were before the Commission, and the remaining categories of hand tools which were within the scope of the Secretary's initial determination of sales at less than fair value on all categories of hand tools from Japan. Because of the dominant position of Japanese hand tools in U.S. imports, the theory of the bill is that a most-favored-nation increase in the tariff is appropriate, as the selling prices of all foreign suppliers are influenced by the Japanese dumping prices.

At this point we need to comment upon the indication which the Commission has given the Subcommittee that the domestic hand tool industry has failed to seek a correction of these grievances in the Courts.

In its Memorandum to the Committee (apparently submitted on April 6, 1977), the International Trade Commission remarked that "[t]he domestic hand tool industry has not, as of this time, sought judicial review of the Commission's negative determinations in either of the aforementioned dumping cases in the appropriate court." [Page 2.] To the extent that this statement suggests that a clear avenue toward judicial review exists or existed, or that full judicial review was or is available, or that the domestic industry slept on its rights, the comment is grossly misleading.

The two "hand tools" cases were decided by the Commission on October 21, 1974 (39 Fed. Reg. 38133), and on December 2, 1975 (40 Fed. Reg. 57517). During that time period, the International Trade Commission also rendered a negative injury

determination in another case, Portable Electric Typewriters From Japan (decided June 19, 1975 (40 Fed. Reg. 27079). In that matter, the domestic industry (consisting of one manufacturer-SCM Corporation) did seek immediate judicial review from the United States District Court for the District of Columbia. Suit was commenced on July 23, 1975 by my law firm on behalf of SCM against the International Trade Commission, the individual Commissioners, the Secretary of the Treasury, the Assistant Secretary of the Treasury for Enforcement, Operations and Tariff Affairs, and the Commissioner of Customs (Civil Action No. 75-1179). The District Court, rather than the Customs Court, was chosen because it did not appear that Congress had provided for review by American manufacturers of negative injury determinations under Section 516 of the Tariff Act of 1930, as amended either by the Trade Act of 1974 or by earlier statutes. On August 15, 1975, the District Court, pursuant to Government counsel's motion, entered an order dismissing SCM's action for lack of subject matter jurisdiction, on the ground that subject matter jurisdiction existed exclusively in the United States Customs Court. SCM filed an appeal with the United States Court of Appeals for the District of Columbia Circuit on August 29, 1975, urging as it had done below that there was no jurisdiction in the Customs Court to review negative injury determinations made by the Commission under the antidumping Act.

It was not until January 12, 1977, that the Appellate Court rendered its decision, which concluded as follows (slip opinion in Appeal No. 75-1816, at 21): “SCM has raised what are far from frivolous doubts concerning its ability to obtain review in the Customs Court pursuant to section 516(c). On the other hand, appellees have urged upon us what appear to be quite possible constructions of the applicable statutes and legislative history. Under these circumstances, we believe that the Customs Court itself should be given the opportunity to utilize its own expertise concerning the applicable statutes, and to determine whether or not it has jurisdiction to review the Commission's negative injury determination in a section 516 (c) proceeding.

"The judgment below in favor of appellees is therefore reversed and the within case is remanded to the District Court. That Court shall retain jurisdiction over this action until SCM has the opportunity to press its quests for relief in the Customs Court. If that Court should determine either that it has no jurisdiction or that it does not have the authority to grant to SCM adequate relief to correct the Commission's negative injury determination if it decides that the latter conclusion is in error, the District Court shall then itself proceed to exercise jurisdiction under 28 U.S.C. § 1340 and to reach the merits of SCM's claims.

So ordered."

Thus, in view of the Appellate Court's directive, SCM, on January 24, 1977, filed a petition with the Commissioner of Customs under Section 516(a) of the Tariff Act of 1930, as amended, as a condition precedent to instituting suit in the Customs Court. On February 25, 1977, the Commissioner of Customs denied the petition stating:

"The Customs Service is foreclosed from investigating allegations as to injury or examining any conclusions of the International Trade Commission made within the scope of its statutory authority under section 201 of the Antidumping Act of 1921, as amended (19 U.S.C. 160). It is our opinion that the negative determination of injury, having been made, must be considered valid in the absence of a decision of the Customs Court to the contrary, and therefore is binding upon us. Accordingly, the decision not to assess antidumping duties was correct and your petition must be denied."

Since receipt of the aforesaid letter, SCM complied with the requirements of Section 516 (c) and on April 1, 1977 instituted suit in the Customs Court (Court No. 77-4-00553). On April 4, 1977, SCM filed a motion for a determination by the Court as to whether it has subject matter jurisdiction. The motion is pending as of this writing.

Thus, American industry still has not received the definitive word from the courts as to which forum is the appropriate one in which to seek judicial review over negative Antidumping Act injury determinations. With respect to the hand tools industry, it should be clear from the foregoing that the commencement of suit by it while the SCM appeal was pending would have been futile and wasteful. Suit in the District Court would clearly have resulted in dismissal. Suit in the Customs Court was believed to be impermissible as we argued, on behalf of