US China Trade War Developments – Trade, IP, Antitrust and Investments

There has been major developments within the trade, Chinese Antidumping, 337, lawsuit, US/Chinese antitrust, and investments areas.



A week ago, I gave an address in Washington Electricity on the paper that eventually will end up articles within the Journal of Antitrust Enforcement. The purpose of the paper would be that the ongoing decision from the Commerce Department to deal with China like a nonmarket economy country to warrant its refusal to make use of actual Chinese prices and charges in China to find out antidumping rates for Chinese companies has already established a considerable anticompetitive effect on US companies in China and also the U . s . States.

In recent Hardwood Plywood Antidumping situation, Commerce used values in Bulgaria to calculate costs inside a Chinese antidumping situation. Within the 12thMushrooms Review Analysis, Commerce switched surrogate nations from India to Columbia and used surrogate values which were 100 occasions greater for grain straw and cow manure and rates went from 0s and a pair of.17% to 200 to in excess of 300%. See Certain Maintained Mushrooms in the People’s Republic of China, 77 Given. Reg. 55,808 (Dep’t Commerce Sept. 11, 2012). US import information mill the businesses that has to pay these elevated antidumping responsibilities.

Particularly, within the Mushrooms situation, Commerce used Columbia import prices as surrogate values for grain straw and also the value went from 8 cents a kilogram within the prior review to $1.35 a kilogram. Commerce also used import statistics for cow manure and also the surrogate value went from 2 cents a kilogram within the prior review to $1.33 a kilogram to value this raw material input. Incidentally, the number of nations really import cow manure?

Consequently, all Chinese maintained mushrooms happen to be shut from the U . s . States. On November 14, 2013, at least a year after Commerce’s final determination within the Maintained Mushrooms review analysis, a legal court of Worldwide Trade corrected the Commerce’s surrogate value determination in Blue Field (Sichuan) Food Industrial Co., Limited. v. U . s . States, Slip Op. 13-142 (November. 14, 2013), however the damage was already done. Many Chinese companies have simply quit and many Chinese maintained mushrooms are excluded in the US market.

Mushrooms might not seem that important, but it’s simply a good example of the unfair trade practice, that is known as US antidumping cases against Chinese companies. Actually, the Commerce Department has utilized bogus figures from surrogate third nations according to industrial policy and protectionism to calculate Chinese company costs and antidumping rates for many years. The result of the practice is to shut from the US market vast amounts of dollars in Chinese items by US antidumping and countervailing duty orders as lengthy as 3 decades. However the anticompetitive chickens are returning home to roost.

In China china government and also the Chambers of Commerce produced export cost flooring to discourage dumping. These export cost flooring, consequently, have triggered US antitrust cases. See discussion from the Ascorbic Acid situation below. In Section 11 from the WTO Accession Agreement, however, China decided to “eliminate all taxes and expenses put on exports . . . . “ The WTO has determined in a number of cases that China cannot implement export cost flooring to discourage antidumping cases.

What exactly does Chinese do? It utilizes reciprocity and brings its very own antidumping and countervailing duty cases against US companies, so that as described below, now antitrust cases against US companies to discourage trade cases. China is getting a sizable gun to some knife fight. What circles appears. So we’ve a trade war with China that’s distributing into other legal areas. Although China might not seem vital that you the typical American, having a consumer market of just one.6 billion people, it’s a bigger market compared to US and also the best-selling vehicle was the Buick, the Ford Fusion.

Furthermore, the Antidumping and Countervailing Duty Orders haven’t accomplished their intended purpose. Bethlehem Steel had protection through antidumping and countervailing duty orders from Steel imports for 3 decades. Is Bethlehem Steel alive today?

The issue, however, is whether or not on December 11, 2016 the united states Commerce Department follows Section 15(d) people China WTO Accession Agreement and also the demand the united states produced in a Agreement with China the nonmarket methodology will expire “15 years following the date of accession.” Up to now, the solution apparently isn’t any-agreements between your US and China only have no meaning. Commerce only will consider the statute.

But because indicated above and below, what circles appears and also the Chinese government can enjoy games around companies too. Maybe the time is right for the federal government to follow along with the agreement it signed and call from the Trade War with China that’s growing into a variety of legal areas.


Lately within an article printed within the Washington Publish titled “How to cope with Russia without reigniting a complete-fledged Cold War psychology” SCHULTZ NUNN the-us-strategy-for-keep George P. Schultz, former Secretary of Condition under President Reagan, and Mike Nunn, former Senator and Chairman from the Military Committee, said around the problems regarding Russia’s invasion of Crimea. However in the content, they provided an over-all statement about the significance of trade relations like a grounds for peace between nations, which is applicable straight to the connection between your U . s . States and China. They mentioned:

“The world works more effectively when government authorities possess a representative quality, once the corrupt make of excessive paperwork is lessened, so when economies are available to imports and exports in competitive marketplaces. The recent past has proven the harm completed to global security and also the economic commons by mix-border risks and also the uncertainty that hails from them.”

Among the fundamental fundamentals for peace may be the Rule of Law. However the Commerce Department’s decision for 3 decades to make use of clearly bogus surrogate values to calculate Chinese costs in antidumping cases has produced a really cynical look at US law in China. Because the US antidumping law is frequently the very first US law Chinese encounter, china government and lots of Chinese companies and people think that the united states only will twist its very own law for protectionist reasons in an effort to advance US industrial policy. However China can respond in the same manner twisting its very own law as put on US companies to succeed its very own industrial policy. As you Chinese antitrust lawyer mentioned in my experience lately, china government examines Chinese antitrust/competition law like a “weapon” to assist consumers or, as some might notice, a method to advance Chinese industrial policy, almost as much ast the united states Commerce Department has been doing using the US antidumping law.


As pointed out in past news letters, within the trade world, the most crucial developments could be the WTO discussions in Indonesia and also the Trans Off-shore Partnership (TPP) and Trans-Atlantic (TA)/ the Transatlantic Trade and Investment Partnership or TTIP discussions. These trade discussions will have a major effect on China trade, as trade issues becomes a focus in Congress and lots of Senators and Congressmen become increasingly more protectionist.

Many of the an issue since the protectionism is from the Democratic side from the aisle. Democratic Senators and Congressmen are based on labor unions. Up to now, President Barack Obama cannot acquire one Democratic Congressman to aid Trade Promotion Authority (“TPA”) in Congress. Without bipartisan/Democratic support of these Trade Contracts, Republicans won’t embark on a limb to aid President Barack Obama and risk being shot at through the Democrats throughout the mid-term elections as soft on trade.

As pointed out, within my Feb publish, on The month of january 29th, the next day President Barack Obama pressed the TPA within the Condition from the Union, Senate Majority leader Harry Reid mentioned the TPA bill wouldn’t be introduced around the Senate Floor.

In summary, on The month of january 9, 2014, the Bipartisan Congressional Trade Focal points Act of 2014 was introduced into Congress. See Feb Publish about this Blog for any copy from the bill. The TPA bill provides the Administration, USTR and also the President, Trade Promotion Authority or Steps For Success Authority to ensure that assuming USTR works out a deal a trade offer the TPP or even the Trans-Atlantic discussions, the Agreement can get an up or lower election in america Congress without any amendments.

Underneath the US Metabolic rate, Congress, not obama has the ability to manage do business with foreign nations. Article 1, Section 8, Clause 3, from the Metabolic rate empowers Congress “to regulate Commerce with foreign nations” Thus to barter a trade agreement, the Congress provides the Executive Branch, the Administration/Obama and U . s . States Trade Representative (“USTR”), the ability to barter trade deals.

Because trade deals are negotiated using the foreign nations, the only method to result in the system jobs are that underneath the TPA law once the Trade Agreement is negotiated, the Congress will agree with an up or lower election around the entire Agreement with no amendments towards the Agreement that was already negotiated is going to be permitted.

The story continues . . . .

On March 4, 2014, in the 2014 trade policy agenda the White-colored House set a brand new objective of finishing a TPP agreement in 2014. The White-colored House introduced it wants to summarize TPP discussions making substantial progress within the TTIP discussions with Europe this season.

U.S. Trade Representative Michael Froman mentioned that continuing to move forward with this particular Trade Agenda increases domestic job growth by getting rid of high responsibilities and nontariff obstacles against U.S. items abroad. The administration stated it might try to conclude discussions around the Trans-Off-shore Partnership (“TPP”) this season.

“In next season, USTR is constantly execute the president’s trade vision that depends on opening marketplaces, leveling the arena for American employees and producers, and fully enforcing our trade legal rights all over the world,Inches Froman stated.

On March 7, 2014 a Senior Federal Government official mentioned the TPP discussions are “almost complete.” The statement is made poor V . P . Joe Biden’s visit to Chile, where the v . p . talked about the TPP along with other trade ties using the South American nation.

On March 11, 2014 in a National League of Metropolitan areas conference in Washington, D.C. USTR Froman advised Congress to allow the administration fast-track authority to expedite approval from the TPP. Throughout his remarks, Froman recommended the TPP could be required for the U.S. economy’s future and would promote a rise in mix-border business in Asia. Froman mentioned that presently, you will find an believed 500 million middle-class consumers in Asia – several that’s likely to achieve 2.7 billion by 2030. Froman mentioned when individuals projections endure, the Asian market in twenty five years is going to be about six occasions how big the U.S. market. Also, he mentioned:

“If we don’t open individuals marketplaces, help enhance the standards and define the guidelines from the game, other nations will and we’ll remain around the sidelines, excluded in the quickest growing marketplaces on the planet, worked from global supply chains, facing a race towards the bottom that people cannot win and cannot run.”

On March 13th, however, it had been reported the U.S. and Japan have gaps within their positions on lowering farming tariffs included in the TPP discussions. Based on USTR, after 2 days of bilateral discussions there is “limited progress.” Appearing out of 2 days of discussions on March 12, the USTR’s office mentioned that US and Japanese authorities haven’t made much progress which “working-level” discussions would continue.

The USTR would be to speak in the finish of April towards the House Methods Committee, but his testimony was launched on April 3, 2014. FROMAN TESTIMONY Included in this speech, USTR Froman will condition:

“Over yesteryear 4 years, U.S. exports have elevated to some record a lot of $2.3 trillion in 2013. Actually, another in our total economic growth is related to this rise in U.S. exports. “Exports mean jobs. Each $1 billion in exports supports 5400-5900 U.S. jobs. 11.3 million People in america now owe their jobs to exports – a rise to at least one.six million jobs within the last five years – and individuals jobs pay 13-18 percent more typically than non-export related jobs.”

“In 2014, we’ll try to conclude discussions around the TPP agreement. TPP is presently being negotiated among 12 nations within the quickest growing region on the planet representing nearly 40 % of worldwide GDP along with a third of worldwide trade.” . . .

“As we pursue this agenda, we is constantly talk to Congress and seek input from an array of experts, stakeholders and also the public. We’ve held over 1,200 conferences with Congress about TPP alone – which doesn’t range from the conferences we’ve had on T-TIP, TPA, AGOA or any other trade initiatives. Our Congressional partners preview our plans and provide us critical feedback all the way. We make sure that any Person in Congress can evaluate the negotiating text and it has the chance to get detailed briefings by our arbitrators. . . .

“Finally, allow me to say a thing about Trade Promotion Authority (TPA). The final TPA legislation was ignored about ten years ago. Much has altered ever since then. There’s been the May tenth, 2007 agreement on labor, atmosphere, innovation, and use of medications. There’s been the emergence from the digital economy and also the growing role of condition-possessed businesses within the global economy. These problems ought to be reflected within the legal negotiating objectives of the new TPA bill.

“We often hear from many who TPA must be up-to-date. We agree. The Administration welcomed the development of bipartisan TPA legislation in The month of january and anticipate dealing with this Committee and Congress in general to secure trade promotion authority which has as broad bipartisan support as you possibly can.

We anticipate renewing Trade Adjustment Assistance (TAA) which expires in the finish of the year too.Inches

On April 8, 2014, in a speech in the center for Proper and Worldwide Studies in Washington, Republican Senator Orin Hatch, ranking Republican person in the Senate Finance Committee, belittled the Obama Administration’s efforts to succeed the TPA approval process for that TPP and TTIP discussions. Senator Hatch mentioned the Administration had made only an “anemic” effort to acquire support for that renewal of Trade Promotion Authority.

As Senator Hatch mentioned, “No complex, economically significant trade agreement has have you been negotiated by administration and approved by Congress without Trade Promotion Authority . . . . Sadly, this administration’s enthusiasm for TPA appears tepid at the best. Despite openly with approval of Trade Promotion Authority within the Condition from the Union, President Obama’s efforts to attain its effective consideration happen to be anemic.”

Hatch introduced the TPA bill together with former Senate Finance Chairman Max Baucus, the U.S. ambassador to China, and House Methods Chairman Dave Camp, R-Mi.

Hatch mentioned, “We require the president’s active engagement and support. We want total political commitment out of this administration to evolving TPA this season. Without them, we just won’t succeed. And, as persuasive like me, I’m not nearly competitive with President Barack Obama could be in convincing Democrats that renewing trade negotiating authority should be important for the nation. There’s still time, and i’m wishing that President Barack Obama will rise towards the challenge.”

See Senator Hatch’s speech at

On April 9, 2014, the following day, the brand new Senate Finance Committee Chairman Senator Ron Wyden introduced he was presenting a brand new TPA bill, what Senator Wyden calls Wise Track. Within the attached speech, WYDEN SPEECH Senator Wyden spoke towards the American Apparel Shoes Association Conference proclaiming that his new bill will need the Administration to become more open in the trade discussions and take ecological and labor issues together with currency manipulation into consideration during these trade discussions. Senator Wyden mentioned:

“Today I wish to discuss how trade these days can make good middle-class jobs and expand things i call the winners’ circle within our country.

It comes down to the truth that American trade policy happens to be a tale of adaptation and alter. . . . .

Today’s challenges and possibilities, greater than every other amount of time in my lifetime, come lower to making more good-having to pay, middle-class jobs. It’s my view that each trade discussion, each and every trade discussion, must now concentrate on how trade policy could be a springboard to high-skill, high-wage American jobs. Jobs in innovative fields that didn’t exist prior to the digital era. Jobs in high-tech manufacturing that can’t easily be outsourced. Jobs that provide People in america a ladder in to the middle-class. Here’s the truth folks, or the one which I hear at each town meeting – I’ve another approaching per week approximately – countless middle-class People in america simply don’t believe trade might help them succeed, or they worry their voices aren’t being heard. A twenty-first century trade policy needs to meet the requirements of individuals who’re middle-class today and individuals who desire to be middle-class tomorrow. On my small watch, I will tell you, individuals voices will not get short shrift within the Senate Finance Committee.

My fundamental philosophy regarding trade is I wish to see People in america grow making things here, innovate and increase the value of them here, and ship them somewhere, whether in containers, on planes, or perhaps in electronic bits and bytes.

My view can there be are possibilities for that U.S. to achieve that in trade contracts with nations over the Off-shore as well as in Europe, but it will take fresh guidelines – modified towards the occasions – to create individuals trade contracts work with all People in america.

I wish to be very obvious: only trade contracts which include several ironclad protections according to today’s great challenges can go through Congress. I’m not likely to accept or advance anything less.

First, trade contracts should be enforceable, and not simply in name only. The U . s . States needs to follow-through on enforcement both at home and all over the world. Whether it doesn’t, trade contracts won’t deliver on their own job-creating potential and also the economic winners’ circle, rather than growing, could really shrink.

A Global Trade Organization ruling that arrived on the scene just a week ago demonstrated an excellent illustration of enforcement done correctly. China’s limitations on rare earth mineral exports did real harm to American companies and consumers and may cost our country jobs across several industries.

Producers of rechargeable batteries for hybrid and electric automobiles, MRI machines, night vision goggles and many more required a success. My pal Leo Gerard in the U . s . Steelworkers will explain the outcome China’s limitations have experienced on his members’ jobs. Therefore the U.S. was up and challenged China within the WTO, and also the WTO ruled in America’s favor – making obvious that as part of the worldwide buying and selling system, china need to abide by the guidelines.

With American jobs at risk, all trade contracts needs to be enforced with this type of vigor. Enforcement needs to happen without hesitation over politics or other sorts of secondary factors.

At this time, for instance, Customs frequently seems to pay attention to security at the fee for its trade mission. Fake NIKE footwear and counterfeit computer chips having a fake Apple emblem too frequently make their well past America’s border agents undetected. Foreign companies have evaded the trade remedy laws and regulations that safeguard American employees, like individuals within the solar and steel industries. A twenty-first century trade policy can’t work when the cops in the border are not doing an sufficient job around the beat.

Second, trade contracts must promote digital trade which help promote innovation in places that America leads, like cloud computing. When President Kennedy made his pitch for any modern trade policy to Congress 50 years ago, nobody might have imagined exactly what the digital world would become, or how important the web is always to the worldwide economy. . . .

Fortunately, our country today likes a significant trade surplus in digital trade that fuels the development of high-quality, high-skill jobs. Twenty-first century trade contracts need to preserve this American advantage. They have to prevent unnecessary limitations on data flows or needs to localize data and servers. Make no mistake about this, these NSA guidelines have injured the American brand in areas of this debate and it is something which I will concentrate on altering, not only in the Finance Committee, but in the Intelligence Committee too. They have to include assurances that Internet companies don’t have any more legal liability in foreign marketplaces compared to what they do within the U.S. There’s grounds that America hosts the key technology and Internet companies: our legal framework promotes innovation and also the digital economy. . . .

Similarly, provisions such as the PIPA and SOPA bill that will achieve this much damage to the web or lead to its censorship don’t have any devote trade contracts. I would like everybody to understand that I’ll try everything within my turn on the Finance Committee to prevent them from entering future contracts. I welcomed Ambassador Froman’s statement in Feb that he’s dedicated to keeping them from TPP. It’s as easy as this: the web, which is usually the shipping lane from the twenty-first century needs to be stored open and free.

Third, trade contracts must combat the brand new variety of predatory practices that distort trade and investment and price American jobs. Chinese condition-possessed businesses, for instance, do not have the danger or borrowing costs their American competitors do.

China’s indigenous innovation guidelines too frequently undermine American innovators by needing these to relocate ip. And currency manipulation undercuts American autoworkers and quite a few producers at home. Again, they are practices that cost good American jobs. They have a similar dangerous effects on American exports just like any other trade barrier, so modern contracts – such as the TPP – need to give our country the various tools to level the arena.

4th, some nations simply don’t share America’s dedication to labor and also the atmosphere, then when the U.S. doesn’t lead the way in which with strong standards and enforcement, trade contracts are unsuccessful. Obligations on these problems need to be core areas of trade contracts, instead of something similar to a side deal that’s just coasting along for that ride. This can be something in which the U.S. makes progress. . . . . .

Finally, contracts should be ambitious, opening foreign marketplaces and helping U.S. employees, maqui berry farmers, producers and repair providers increase exports. . . . .

Trade contracts should be a part of a larger framework, including Trade Adjustment Assistance, that moves exports more proficiently to foreign marketplaces and provides more People in america an opportunity to climb the economical ladder. You will find individuals who reason that the advantages of trade deals only have attended some. I reason that when we try to improve, more contemporary contracts that reflect the training in history, we are able to get trade deals that expand the winners’ circle which help revitalize the center class. . . .

When it comes to trade talks, in my town hall meetings, people want to know what’s being negotiated. In my view the public has a right to know what the policy choices are.  For its part, Congress has a constitutional responsibility to tell the President and the U.S. Trade Representative what they need to accomplish in trade deals, which it has traditionally done by passing trade promotion authority, or “fast-track.” I believe what’s needed to accomplish these things is different from a fast-track, or a “no-track,” and this afternoon I’d like to call it a “smarttrack.”

A smart-track will hold trade negotiators more accountable to the Congress, more accountable to the American people, and help ensure that trade agreements respond to their concerns of our people and their priorities, and not just to special interest groups. It will include procedures to get high-standard agreements through Congress, and procedures that enable Congress to right the ship if trade negotiators get off course. But to get better trade agreements, there must be more transparency in negotiations. The Congress cannot fulfill its constitutional duty on trade if the public doesn’t know what’s at stake or how to weigh in.

The general public must realize that somebody at USTR is dedicated to losing more light on trade discussions and making certain the United states citizens possess a strong voice in trade policy -a voice that’s really heard.

Moving forward dads and moms and days ahead, I will use my co-workers and stakeholders on the proposal that achieves these goals and draws in more bipartisan support. So far as I’m concerned, substance will drive the timeline.

Some want to lay blame for insufficient support for that TPA proposal lately introduced in Congress in the doorstep from the White-colored House. Obama and Ambassador Froman are, frankly, getting a hard time selling something that people aren’t thrilled about. Policy matters, and arbitrary timelines won’t work. Rather than casting blame, our time are the best spent moving up our masturbator sleeves and becoming to operate on guidelines that expand the winners’ circle for the people. Growing the winner’s circle will imply that People in america visit a trade agreement they really wish to pass. Which will build more bipartisan support for that president’s trade focal points. . . .”

An April ninth article in Roll Call described the tough problem the Administration faces with Unions within the Trade area due to the approaching mid-term elections. See


But on March 17, 2014, former Congressman Don Bonker of APCO printed articles within the China Daily concerning the obstacles the Federal Government is facing in relation to its trade agenda. BONKER ARTICLE As Congressman Bonker states:

“US The President has such good intentions, but his high goals frequently become bridges to nowhere. The most recent is worldwide trade. This time around the issue is not the Republicans, but their own party.

His administration continues to be positively negotiating two huge trade contracts, one with Off-shore Rim nations and something using the Eu, yet Congress must first pass the Trade Promotion Authority bill to permit fast-track consideration of these two trade contracts.

However, the Democrats’ top leader in america Senate, Harry Reid, has generate a roadblock by cautioning that “everyone could be strongly advised simply to not push this right now”. That’s the sentiment on most Congressional Democrats who check this out like a dangerous election within an election year.

Maybe the time is right for that Federal government to take a rest from going after contentious regional trade deals and provide a greater priority towards the US-China economic relationship. Why launch trade discussions with 11 Asian nations and then leave out China?

The Federal government earlier pictured the Trans-Off-shore Partnership like a geopolitical strategy that will provide the US a more powerful presence in Asia, plus allow a safety shield for Asian nations feeling threatened by China’s growth and influence in the area. However, since the US already has trade pacts with six from the TPP nations, why cast a bigger internet that unnecessarily adds burden, otherwise debate, towards the negotiating process?

Because the world’s two biggest economies, the stakes are greater with regards to China-US relations, much like the possibilities and challenges. Chinese investments in america bending this past year to some record $14 billion and early this season were built with a quick start with Lenovo Group’s two huge purchases of Google Inc’s Motorola handset division for $2.9 billion and it is acquisition of IBM Corp’s low-finish server unit for $2.3 billion.

Simultaneously, two large Chinese organizations, Richard Li’s Hybrid Technology LLC and China’s biggest auto parts company, Wanxiang Group Corp, were very competing to consider within the bankrupt Fisker Automotive Corporation with intends to revive the electrical sports vehicle manufacturer.

True, Chinese investments in america are growing quickly, however their figures could have been bigger were it not for that hostile atmosphere a lot of China’s suggested acquisitions and mergers encounter.

The Wall Street Journal reported the Lenovo acquisitions (both IBM and Google’s Motorola) will “likely draw scrutiny from US government bodies and worry about security issues concerning acquisitions by Chinese companies”. That it was the situation with Huawei Technologies Co. Limited. and ZTE Corp, two large Chinese telecom network providers.

What’s being overlooked would be the economic benefits such investments provide the U . s . States, including job creation, that is a major problem this election year. Based on the Rhodium Group, Chinese investments have produced greater than 70,000 jobs in america which number could achieve 200,000 by 2020 (as well as protecting the roles of unsuccessful and bankrupt US companies), and that’s why US President Barack Obama now sees foreign investment as vital to growing the country’s economy.

Last October, in a Department of Commerce Investment Summit, President Barack Obama introduced the development of Select USA, publically stating: “I would like your companies to take a position more within the Usa.” It had been something of the clarion call around the world that investments are actually welcomed in america.

This past year President Barack Obama and Chinese President Xi Jinping decided to revive discussions for any China-US Bilateral Investment Agreement that is supposed to break lower the obstacles to inspire more foreign investments backward and forward nations.

Yet may be the US ready to insulate the Committee on Foreign Purchase of the U . s . States process from getting used for economic and political interests to bar investments, and it is China, because of its part, prepared to allow foreign investments in the protected industries, particularly Condition possessed businesses as well as in the financial, transportation and telecom industries?

The switch side may be the ever-growing mercantile trade over the Off-shore. The entire concept of the TTP would be to lower tariffs, remove limitations and improve market access one of the taking part nations. But it’ll likely encounter exactly the same fate because the 20 free trade contracts formerly negotiated through the US Trade Representative that ultimately were welcomed with skepticism on Capitol Hill.

Nowhere is that this more apparent than US trade guidelines which are being unfairly targeted at China. America’s anti-dumping/countervailing duty laws and regulations are highly discriminatory for the reason that they still treat China like a non-market economy, which guarantees the imposition of punitive tariffs which are showing dangerous to companies both in nations.

It certainly boosts questions regarding the US’ protectionism, or at best the politicalizing of their trade guidelines, casting doubts on Congress acting sensibly along with a President’s capability to deliver on important trade deals. Indeed former US trade representative Robert Zoellick once asserted that “trade contracts were much more about politics than economics”. Attempting to address these problems is a challenge. Around the US side, it’s a mixture of old fashioned protectionism, China bashing, altered regulating guidelines and domestic companies seeking defense against Chinese competition.”

The writer, an old US Congressman, works together with APCO Worldwide, a completely independent communications working as a consultant.

. . . See the article at


On March 18, 2014, the Court of Appeals for the Federal Circuit (“CAFC”) in Guangdong Wireking Housewares & Hardware Co., Ltd. et al. v. United States, CAFC GXP NO CONSTITUTIONAL VIOLATION addressed the Congressional 2012 statute overruling the GPX decision and retroactively applying both antidumping and countervailing duties with respect to imports from non-market economy (“NME”) countries.   In that decision, the CAFC affirmed the Court of International Trade that the Commerce Department does not have to adjust for double counting and that the retroactive imposition of both countervailing and antidumping duties does not violate the Ex Post Facto Clause of Article I, Section 9 of the U.S. Constitution.


On March 26, 2014, the USTR announced that the WTO had sided with the United States, European Union and Japan in finding that China’s restrictions on the export of rare earth materials, tungsten and molybdenum violated its WTO accession commitments and the General Agreement on Tariffs and Trade (GATT).  In the rare earth case, the USTR challenged three types of Chinese export restrictions– export duties, export quotas, and requirements for enterprises permitted to export the materials.

Although WTO rules do not require members to eliminate export duties, China committed in Paragraph 11.3 of China WTO Agreement to eliminate all export restraints, including duties, except for those on 84 specific tariff lines.  Paragraph 11.3 of the US China WTO Agreement, which became the China WTO Agreement, specifically provides,” China shall eliminate all taxes and charges applied to exports unless specifically provided for in Annex 6 of this Protocol or applied in conformity with the provisions of Article VIII of the GATT 1994.”  As the materials at issue in the rare earths case were not included in that list, the panel found that the export duties violated Paragraph 11.3.

Paragraph 11.3 is also the provision at the core of the Vitamin C antitrust case that the Chinese government cites in its Appellate Brief, which will be discussed more below.  In fact, tungsten ore has been the target of a US antidumping action, and a US antidumping order was issued against China from Nov 21, 1991-Nov 3, 1999, shutting all tungsten ore out of the US for about 8 years.

All parties have 60 days or until May 25th to the WTO appeal the ruling.  On April 9th, the USTR announced that for strategic purposes, it has appealed the decision so that it can get a WTO ruling that can be enforced against China.

On March 26, 2014, USTR WTO VICTORY RARE EARTH METALS AND 2011 VITORY the USTR specifically stated in its announcement of the WTO victory on Rare Earths, Tungsten and Molybdenum:

“United States Trade Representative Michael Froman announced today that a World Trade Organization (WTO) dispute settlement panel has agreed with the United States in a major dispute, finding in favor of U.S. claims that China’s imposition of export restraints on rare earths, tungsten, and molybdenum breach WTO rules. Rare earths, tungsten, and molybdenum are key inputs in a multitude of U.S-made products for critical American manufacturing sectors, including hybrid car batteries, wind turbines, energy-efficient lighting, steel, advanced electronics, automobiles, petroleum and chemicals.

“Time and again, the Obama Administration has made clear that we are willing to go to the mat for American workers and businesses to make sure that the playing field is fair and level,” said Ambassador Froman. “The United States is committed to ensuring that our trading partners are playing by the rules. We will continue to defend American manufacturers and workers, especially when it comes to leveling the playing field and ensuring that American manufacturers can get the materials they need at a fair market price.”

“China’s decision to promote its own industry and discriminate against U.S. companies has caused U.S. manufacturers to pay as much as three times more than what their Chinese competitors pay for the exact same rare earths. WTO rules prohibit this kind of discriminatory export restraint and this win today, along with our win 2 years ago in an earlier case, demonstrates that clearly.”  . . .

The Chinese export restraints challenged in this dispute include export duties and export quotas, as well as related export quota administration requirements. These types of export restraints can skew the playing field against the United States and other countries in the production and export of downstream products. They can artificially increase world prices for these raw material inputs while artificially lowering prices for Chinese producers. This enables China’s domestic downstream producers to produce lower-priced products from the raw materials and thereby creates significant advantages for China’s producers when competing against U.S. and other producers both in China’s market and other countries’ markets. The export restraints can also create substantial pressure on foreign downstream producers to move their operations, jobs and technologies to China.  . . .

This dispute builds on and expands an earlier victory that the United States achieved in 2011 challenging China’s use of export restraints on a different set of raw material inputs used in the steel, aluminum, and chemicals industries (bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorous and zinc). “  Emphasis added.

As stated many times on this blog, there are outstanding US antidumping orders against magnesium, foundry coke, manganese, and silicon metal, which have shut probably $1 billion of imports of these Chinese metal products out of the United States for decades.  Exolon Esk, a one company US industry, tried to bring an antidumping case against Silicon Carbide, but failed.  The US industry, however, did prevail in the Tungsten Ore case, leaving an antidumping order in place and shutting all Chinese tungsten ore out of the US market for almost 8 years.

Thus the USTR states:

Chinese export restraints . . . can skew the playing field against the United States and other countries in the production and export of downstream products. They can artificially increase world prices for these raw material inputs while artificially lowering prices for Chinese producers. This enables China’s domestic downstream producers to produce lower-priced products from the raw materials and thereby creates significant advantages for China’s producers when competing against U.S. and other producers both in China’s market and other countries’ markets. The export restraints can also create substantial pressure on foreign downstream producers to move their operations, jobs and technologies to China.  . . .

But US antidumping orders against metal and chemical products from China based on bogus numbers that have no relationship to reality can have the exact same effect as export restraints, in many cases created by the Chinese government to deter US antidumping cases.

In effect, from the US government’s point of view it can have its cake and eat it too.  Smash Chinese companies and US import companies with antidumping cases based on bogus numbers, and if the Chinese government tries to set an export price floor to deter dumping cases, slam China at the WTO.

In 2011, it was reported that U.S. lawmakers applauded the first WTO determination and called for speedy implementation of the decision.

“These WTO findings are crystal clear — China is manipulating the raw materials market at the expense of American businesses,” said Senate Finance Committee Chairman Max Baucus (D-MT) in a July 5, 2011 statement. “As a WTO member, China has a responsibility to play by the rules and respect the rights of its international partners.”

But will the same US lawmakers now do right by US importers, US downstream producers and China and follow the treaty the US signed and the demand it made and make China a market economy country in US antidumping cases on December 11, 2016?  Or will the US Congress continue to seriously damage US companies, skewing “the playing field against the United States … in the production and export of downstream products.. . .” creating “substantial pressure” on US “downstream producers to move their operations, jobs and technologies to China . .  . .”


On April 8, 2014 the USTR printed the attached notice within the Federal Register seeking comments by May 2, 2014 on the WTO complaint filed by China against various US antidumping cases.  USTR NOTICE WTO DISPUTE SETTLEMENT NME SINGLE COUNTRY RATE  A few of the specific issues elevated through the Chinese government are targeted dumping and using homing in a variety of initial and review antidumping research, the only rate presumption from non-market economies, the use of NME-wide methodology and also the option to adverse details like the China wide rate.


On April 4, 2014, the federal government indicted a Chinese citizen and 2 Iranian companies for breach people export laws and regulations for unlawfully conveying products utilized in producing weapon-grade uranium to Iran.

Within the indictment, CHENG INDICTMENT Sihai Cheng and many Iranian co-defendants were billed with breaking U.S. export laws and regulations by conspiring to export U.S.-manufactured pressure transducers to Iran.

Cheng was arrested by British government bodies on February. 7 on a trip within the U.K. and it is being held there pending extradition towards the U.S. Based on the indictment, to evade US export controls, Cheng’s China agent setup front companies in China to pose because the finish customers in transactions with Cheng’s Shanghai office with regards to fraudulently acquiring export licenses in the U.S. If charged, Cheng faces as much as two decades imprisonment and fines as high as $a million for every export breach.


For a long time, the federal government and Congressmen have were not impressed with Chinese companies using prison labor to create items, that are exported towards the U . s . States.  In a recent Housewares Show in Chicago, however, this program Manager from the Business Development Group of the usa Justice Department’s Federal Bureau of Prisons was going booth to booth stating that the prison industrial facilities operated by the Justice Department’s Bureau of Prisons within the U . s . States could match any Chinese cost around prison labor.  What circles truly does plainly.


Within the attached second scope determination on curtain wall models, Commerce figured that curtain wall models are certainly taught in Aluminum Extrusions Antidumping and Countervailing Duty Situation.  Commerce Complete and handle Curtain Wall Ruling


As pointed out in prior news letters, we’re dealing with APCO, a properly-known lobbying/government relations firm in Washington Electricity, on creating an american importers/finish customers lobbying coalition to lobby from the growth of the antidumping and countervailing duty laws and regulations against China for the advantage of US companies.

On September 18, 2013, ten US Importers decided to make up the Import Alliance for America. The goal of the Coalition is to educate the united states Congress and Administration around the harmful effects of the usa China trade war, especially US antidumping and countervailing duty laws and regulations, upon us importers and US downstream industries.

We are targeting two major issues-Employed by market economy strategy to China in 2016 as provided in america China WTO Agreement and dealing against retroactive liability for all of us importers. The U . s . States may be the only country which has retroactive liability because of its importers in antidumping and countervailing duty cases. The main factor in our arguments is the fact that these changes in america antidumping and countervailing duty laws and regulations will be to allow us to companies, especially US importers and downstream industries. We may also be promoting for any public interest test in antidumping and countervailing duty cases and meaning US consumer companies.

We’re now contacting many US importers as well as Chinese companies to keep these things contact their US import companies to find out if they are curious about taking part within the Alliance.

As indicated above, currently, Commerce takes the positioning that it’ll not make China an industry economy country in 2016 as needed through the WTO Accession Agreement. Changes towards the US antidumping and countervailing duty law against China are only able to happen due to a push by US importers and consumer companies. In US politics, only squeaky wheels obtain the grease.

In forthcoming news letters we’ll provide more information concerning the Alliance and particular meeting days in numerous regions of the U . s . States.


As numerous individuals may have heard, I’m around the Board of Company directors from the Northwest Trade Adjustment Assistance Center, the only real trade program that really works.  We offer Authorities help US companies which have been hurt by imports underneath the Trade Adjustment Assistance for Firm (“TAAF”) program.  Total Government help companies each year is $16 million.  The federal government provides employees $1 billion to re-train them should they have been hurt by imports.  Maybe this out of whack situation ‘s the reason for a few of the trade problems in america.

The 2013 Report on the TAAF is attached FY13_TAAF_Annual_Report_to_Congress and can be found at

A few of the key findings, however, are listed below:

“In Fiscal Year (FY) 2013, firms aided through the U.S. Department of Commerce Economic Development Administration’s (EDA) Trade Adjustment Assistance for Firms (TAAF) program carried out more effectively compared to manufacturing industry in general, showing a substantial return on federal investment. . . . .

Overall, this program works well in assisting firms be competitive and overcome negative trade impacts. Good examples of TAAF program advantages to manufacturing firms are available in the supplement and also the finish of the report.

In FY 2013, firms taking part within the U.S. Department of Commerce Economic Development Administration’s (EDA) Trade Adjustment Assistance for Firms (TAAF) program reported that, typically, their sales elevated by 85 %, employment elevated by 43 percent, and productivity elevated by 29 percent from the moment of TAAF certification towards the completing the TAAF program. . . . .

All TAAF-aided businesses that completed this program in FY 2011 were functioning in the finish of FY 2013, showing strong survival rates for TAAF-aided firms when confronted with import demands.”


As a result of the united states along with other antidumping and countervailing duty cases, China’s Secretary of state for Commerce (“MOFCOM”) is initiating their very own antidumping and countervailing duty cases from the U . s . States.


On March 19, 2014, MOFCOM started an antidumping situation against Optical Fiber Preform items imported in the US and Japan. China petitioners are Yangtze Optical Fiber and Cable Company Limited., Jiangsu Hengtong Optic-electric Co., Limited, and Futong Group Co., Limited.

The United States respondent information mill Corning Incorporated and OFS Fitel, LLC. Japan respondent information mill: Shin-Etsu Chemical Co., Limited., Sumitomo Electric Industries, Limited., Fujikura Limited., and Furukawa.

The United States alleged antidumping rates are 25.42% and US imports into China are worth $142,065,372. A converted initiation notice is attached. Details about Optical Fiber Preform Antidumping Situation


On April 4, 2014, China released final antidumping responsibilities on cellulose pulp utilized in paper, textiles along with other goods in the US, Canada and South america. The Canadian antidumping rates ranged from 13% for Fortress Niche Cellulose Limited. to 23.7% for those other Canadian companies.

The greatest dumping rates were for that US companies with rates from 16.9% for Washington state’s Cosmo Niche Fibers Corporation. to 17.2% of Florida’s Rayonier Performance Fibers LLC. Washington-based Weyerhaeuser Co. received 17% and Georgia-Off-shore LLC’s GP Cellulose received 33.5%. XINHUA PULP



According to the Chinese ban on seafood in the West Coast, china government had detected inorganic arsenic inside a November shipment of geoducks from Washington’s Poverty Bay. That shipment and the other from Ketchikan, Alaska, which was tainted with algae contaminant, brought China on 12 ,. 3 to ban all imports of bivalve seafood gathered in Washington, Alaska, Or and Northern California.

The ban has seriously hurt the Off-shore Northwest seafood industry, obstructing imports towards the major marketplace for West Coast seafood for many several weeks now.

A March 21st visit to China by National Oceanic and Atmospheric Administration authorities might have began the movement to some solution because they met with counterparts in Beijing, and spoken about contaminant testing techniques. Inside a business call with staff from Alaska Senators Ak Senate and Mark Begich’s Offices, the NOAA administrator apparently mentioned the U.S. authorities came from the March 21 meeting positive about resolving the dispute, and finally lifting the ban.

Based on Senator Begich’s office, Chinese authorities told the NOAA reps that they are pleased with Alaska’s PSP testing techniques. But, more work is required to satisfy Chinese concerns about arsenic, which originated from Washington Condition.

With the federal government so tough on imports of farming and sea food items from China, US exporters of farming and sea food items should be expecting china government to become just like tough upon us exports to China.

What goes around does indeed come around.


On March 5, 2014, within the attached Guan v. Bi situation, Judge William Orrick Ill from the California Federal District Court clarified the limited achieve of federal courts over foreign litigants in 2 important respects. GUAN V BI Situation

Mr. Guan and the wife sued several Chinese people and also the Chinese government’s Dalian Customs Anti-Smuggling Bureau to have an alleged conspiracy to extort huge amount of money in the couple. The conspiracy incorporated an alleged kidnaping from the couple in China.

Because plaintiffs declined the extortion demand, these were jailed for a lot of several weeks in China. After release and go back to the united states, china couple sued in California condition court. The only real defendant in america searched for to get rid of the situation to Federal Court. However the US defendant resided within the same condition because the couple and there wasn’t any diversity.

This situation, however, wasn’t detachable underneath the ordinary cause for removal – federal question and variety jurisdiction. The contested issue, therefore, was if the worldwide character from the dispute produced any extra pathways for removal to Federal District Court from Condition Court. A Legal Court held that whenever an overseas sovereign is sued in condition court together with non-sovereign codefendants, just the foreign sovereign itself may take away the situation to federal court underneath the Foreign Sovereign Immunities Act (FSIA).

Second, the existence of non-U.S. litigants on sides of the situation cannot create diversity jurisdiction where complete diversity doesn’t otherwise exist between U.S. litigants on every side.



On April 3, 2014, the U.S. International Trade Commission (“ITC”) in Certain Digital Models, Digital Data, and Treatment Plans for Use in Making Incremental Dental Positioning Adjustment Appliances, the Appliances Made Therefrom and Methods of Making the Same affirmed that it has jurisdiction under 337 to prevent the international transmission of digital files that infringe patents.  The ITC agreed with the Administrative Law Judge that electronic files are “articles” under 337 and found that their transmission constitute “importation” under the statute.

The company released cease-and-desist orders against defendant. The ITC particularly mentioned within the attached Federal Register notice, Given REG DIGITAL FILES Situation:

”Specifically, the Commission affirms the ALJ’s conclusion the accused items are “articles” inside the concept of Section 337(a)(1)(B) which the mode of getting the accused items in to the U . s . States comprises importation from the accused items in to the U . s . States pursuant to Section 337(a)(1)(B). The Commission has determined to locate a breach regarding (i) claims 1 and 4-8 from the `863 patent (ii) claims 1, 3, 7, and 9 from the `666 patent (iii) Claims 1, 3, and 5 from the `487 patent (iv) claims 21, 30, 31 and 32 from the `325 patent and (v) claim one of the `880 patent. The Commission has released cease and desist orders forwarded to CCUS and CCPK, by having an exemption for activities associated with management of existing patients within the U . s . States.”

A complete copy of the perception is going to be published on my small blog, when it’s available.


On March 13, 2014, the Condition of Oklahoma through its attorney general sued Newayvalve Co., Neway Industrial Material (Suzhou) Co., Limited., Neway Oil Equipment Co., Limited., Neway Industrial Material (Dafeng) Co., Limited., Neway Valve Worldwide Corporation. and Neway Valve (Suzhou) Co., Limited. for copyright violation in China to be used of unlicensed Microsoft software in China. Within the attached complaint, AG Neway Complaint_3132014 the Oklahoma Attorney General states:

“Plaintiff Condition of Oklahoma (“Plaintiff’), by E. Scott Pruitt, the duly chosen Attorney General from the Condition of Oklahoma, commences this course of action with respect to the Condition of Oklahoma underneath the Oklahoma Deceitful Trade Practices Act (“ODTPA”), 78 O.S. § 51 et. seq., the Oklahoma Antitrust Reform Act (“OARA”), 79 O.S. § 201 et seq., and the like other reasons for action which exist at common law against Defendants Neway Valve Co., Neway Industrial Material (Suzhou) Co., Limited., Neway Industrial Material (Dafeng) Co., Limited., and Neway Valve Worldwide, Corporation. (with each other, “Neway” or “Defendants”). Complaintant alleges on information and belief the following: . . .

1. Plaintiff brings this action to remedy violations of Oklahoma statutory and common law in connection with Defendants’ unfair, deceptive and anti-competitive business practices.

2. Defendants produce a variety of valves and other equipment for sale to the petroleum industry and, in doing so, compete directly with several Oklahoma-based companies for the business of oil and natural gas producers in Oklahoma.

3. However, instead of engaging in legitimate competition, Defendants have illegally utilized unlicensed software in the production and distribution of their valves. As set forth in detail herein; in an industry characterized by thin margins, Defendants have illegitimately and unlawfully reduced their production costs by illegally obtaining copyrighted software that is crucial to the production and sale of their products. Defendants’ unlawful conduct has created an uneven playing field that favors Defendants’ products over comparable products sold by Oklahoma manufacturers.

4. Generally, federal laws and international treaties do not address the pernicious downstream effects of such acts in the Oklahoma valve manufacturing sector. The Defendants’ use of stolen software to gain a competitive advantage over domestic valve manufacturing companies,’ including those in Oklahoma, can be remedied, however, by proscribing such tactics as unfair, deceptive and anti-competitive methods of commerce under Oklahoma law.

5. Plaintiff asks this Court to enjoin Defendants unlawful business practices, impose civil fines and penalties, and award restitution, monetary damages, investigative costs and fees, and attorney fees, as well as such other relief as the Court deems just and proper.”


On Feb 27, 2014, Smartphone Technologies filed new patent cases against ZTE and Huawei. SMARTPHONE HUAWEI SMARTPHONE ZTE

On April 7, 2014, Pragmatus Mobile sued ZTE for patent violation. PRAGMATUS ZTE

On April 8, 2014, Billabong Worldwide Limited, GSM Procedures PTY Limited. and Burleigh Point Limited d/b/a Billabong USA sued Digital Shui dba Multisport Asia for cybersquatting (unlawfully taking up your own domain name that offers no legal rights) around the website name after which demanding exorbitant sums of cash as ransom for that return from the charge of the Domains to Plaintiffs. Defendant’s conduct allegedly breaks the Anticybersquatting Consumer Protection Act, 15 U.S.C. 1125(d), (“ACPA”) and also the Computer Fraud and Abuse Act, 18 U.S.C. 1030(a)(4), comprises tortious interference with contract under Virginia common law, as well as comprises a breach of fiduciary duty, such as the duty of loyalty and good belief and fair dealing. BILL4


On April 3, 2014, the attached items liability complaint was declared wrongful dying by Maxine Surber within the Federal District Court within the Western District of Washington States from the Shanghai Zhenhua Heavy Industries Co., Limited. for that dying of Shaun Surber who died while keeping a spead boat to shore crane designed and made by Shanghai Industries.  Items LIABILITY SHANGHAI COMPANY



On April 4, 2013, the Justice Department introduced it had become effective the very first time in extraditing an overseas national to manage charges associated with a cartel, worldwide antitrust bid-rigging conspiracy associated with marine hose offered within the U . s . States. Within the attached April fourth announcement, United States FOREIGN NATIONAL the Justice Department mentioned:

“Romano Pisciotti, an Italian national, was extradited from Germany on the control of taking part inside a conspiracy to suppress and eliminate competition by rigging bids, fixing prices and allocating market shares for sales of marine hose offered within the U . s . States and elsewhere, the Department of Justice introduced today. This marks the very first effectively litigated extradition with an antitrust charge.

Pisciotti, an old executive with Parker ITR Srl, a marine hose manufacturer headquartered in Veniano, Italia, was arrested in Germany on Next Month, 2013. He showed up within the Southern District of Florida, in Miami, yesterday and it is scheduled to create his initial appearance today within the U.S. District Court for that Southern District of Florida in Foot. Lauderdale, at 11:00 a.m. EDT.

“This first available extradition with an antitrust charge enables the department to create an alleged cost fixer towards the U . s . States to manage charges of taking part inside a worldwide conspiracy,” stated Assistant Attorney General Bill Baer responsible for the Department of Justice’s Antitrust Division. “This marks a substantial advance within our ongoing efforts to utilize our worldwide antitrust co-workers to make sure that individuals seeking to subvert U.S. law are introduced to justice.”

Marine hose is really a flexible rubber hose accustomed to transfer oil between tankers and storage facilities. Throughout the conspiracy, the cartel affected prices for 100s of huge amount of money in sales of marine hose and related items offered worldwide. . . .

Pisciotti is billed with breaking the Sherman Act, which has a maximum penalty of ten years imprisonment along with a $a million criminal acceptable for people. . . .

Because of the department’s ongoing marine hose analysis, five companies, including Parker ITR Bridgestone Corp. of Japan Manuli Health spa of Italy’s Florida subsidiary Trelleborg of France and Dunlop Marine and Oil Limited, from the Uk, and nine people have pleaded guilty.”


As pointed out within my last e-mail, the Ascorbic Acid situation is overall in the District Court level. The ultimate judgment was modified downward from $153 million to some $147 million judgment due to double counting against by Hebei Welcome Pharmaceutical Co., Limited. (“Hebei”) and North China Pharmaceutical Group Corp. (“NCPGC”) for cost fixing.

On April 7, 2014, Hebei and NCPGC filed the attached appeals brief Hebei ascorbic acid appeal brief using the Second Circuit Court of Appeals asking for the Court reverse US District Judge John M. Cogan’s judgment imposing nearly $150 million in damages along with a permanent injunction as the organization was submission with Chinese laws and regulations and rules by fixing prices on Vitamin-C exports. In the brief, which is published on my small blog, Hebei and NCPGC particularly condition partly:

“The district court enforced nearly $150 million in penalties along with a permanent injunction on Appellants for submission using their own nation’s laws and regulations and rules in reaching cost and output contracts on ascorbic acid exports. The written text from the relevant rules, authoritative legal interpretations provided by china government, unrebutted expert testimony on Chinese law, along with other evidence the Chinese government mandated the challenged conduct didn’t have effect on the district court. Rather, a legal court assaulted the credibility from the Chinese government and grabbed on converted words without due regard for his or her cultural and linguistic context to be able to hold that China’s regime of export rules for ascorbic acid constituted a purely private “cartel.” Proper regard for Chinese sovereignty must have brought to dismissal of Appellees’ claims underneath the doctrines of foreign sovereign compulsion, worldwide comity, act of condition, or political question. The judgment below signifies an enormous extension of U.S. federal judicial power in to the matters of the sovereign nation and matters of foreign matters. This Court should hasten to repudiate it.

The brand new system was meant to facilitate China’s entry in to the World Trade Organization (“WTO”) and steer clear of antidumping sanctions enforced by foreign government authorities while keeping the Ministry’s policy of making certain the orderly growth and development of key export industries, for example ascorbic acid. . . . The Ministry described the new system could be “convenient for exporters even though it is favorable for that chambers to coordinate export cost and industry self-discipline.”

As might be predicted, china government has had umbrage in the district court judgment. Chinese authorities have noted the judgment will “cause trouble for the worldwide community” and “eventually harm the interests from the U . s . States. . . . . Leading experts have seen the situation “has potentially expansive implications for the way the U.S. antitrust laws and regulations do and really should communicate with executive branch and foreign interests on worldwide trade,” “is a minimum of in tension using the executive branch’s position [within the WTO],” and “rais[es] the issue of whether our antitrust laws and regulations needs to be construed as giving greater deference towards the sovereignty of person U.S. states rather than the sovereignty of foreign government authorities.” . . . .

The district court’s dismissal from the government’s sights was both disrespectful and unproven. The WTO filings and reviews which the district court depended to assert china government had contrary positions before that body (basically accusing a sovereign government of laying) don’t are a symbol of the proposition that China enforced no legal obligation on ascorbic acid producers to coordinate on export prices and output. . . . . . Rather, they merely condition that China had abandoned “restrictions on exports through non-automatic certification or any other means justified by specific product underneath the WTO Agreement or even the Protocol,” “[n]on-automatic export certification needs under WTO agreement and accession,” and “export quotas and licenses[.]” . . . . .

Not one of them stated that China had abandoned control over prices in ascorbic acid exports, not to mention the Chinese regulating regime became non-compulsory. China government’s representations both in forums were perfectly consistent.

Finally, the U.S. Trade Representative and also the WTO have discovered the Chinese government ongoing to manage export prices on a number of items susceptible to exactly the same fundamental regulating regime as ascorbic acid throughout the relevant period of time, which failure to conform was “subject to analysis resulting in potential criminal and administrative penalties.” . . . . This evidence further demonstrates the district court’s construction of Chinese law was erroneous. . . .

As talked about above, there’s a real conflict between Chinese law and U.S. law during these conditions. All Defendants were Chinese and also the conduct required place entirely in China. Complaints about Chinese export guidelines could correctly be addressed through diplomatic channels and/or even the WTO’s processes. The reason wasn’t to harm People in america but to alleviate the transition of China’s ascorbic acid industry from central planning to some more market-oriented program and also to avoid the injury to China’s trade relations that will derive from dumping charges. The exercise of jurisdiction through the district court has caused harm on U.S.- China relations. The court’s decision produces the possibilities of Chinese firms being under conflicting conduct needs. The U.S. and China are generally people from the WTO and therefore are susceptible to its rules on export limitations. To put it simply, every relevant substantial consideration favors comity abstention.

This situation boosts the same group of concerns concerning the inappropriateness from the judicial branch treading on delicate foreign policy questions. China government made a decision to regulate its domestic ascorbic acid export industry with what it believed was the very best manner within its system. Insofar as China’s sovereign policy choices about how exactly better to manage its economy conflict using the guidelines embodied in U.S. antitrust laws and regulations, that conflict ought to be addressed “through diplomatic channels,” and never with the “unnecessary irritant of the private antitrust action.” . . .

For China’s economic rules and enforcement practices “to be reexamined and possibly condemned by [U.S.] courts . . .would very certainly imperil the friendly relations between [the U.S. and Chinese] government authorities and vex the peace of nations.” . . .Indeed, the U.S. and Chinese government authorities are presently involved in ongoing discussions on issues concerning Chinese regulating its exports, and also the U.S. has acquired itself of WTO dispute settlement methods against China in line with the WTO’s rules on export limitations. . . .. The U.S.’s active engagement during these avenues for resolving disputes between sovereign government authorities shows that disputes concerning China’s regulating its very own exports are foreign relations issues correctly dedicated to the manager Branch. The U.S. judiciary ought to be loath to insert itself into such discussions.”

On April 14, 2014, china Secretary of state for Commerce (“MOFCOM”) filed its very own Amicus Brief for the 2 Chinese companies. Within the attached Amicus Brief, MOFCOM Ascorbic Acid APPEAL BRIEF MOFCOM mentioned:

“The Secretary of state for Commerce from the People’s Republic of China (“MOFCOM”) is an element from the central Chinese government and also the greatest administrative authority in China approved to manage trade between China along with other nations, including all export commerce. It’s the equivalent within the Chinese governmental system of the cabinet-level department from the U . s . States government. MOFCOM formulates methods, recommendations, and guidelines concerning domestic and move and worldwide cooperation. MOFCOM also drafts and enforces laws and regulations and rules regulating domestic and move, and regulates marketplaces to attain a built-in, competitive, and orderly market system.

MOFCOM continues to be positively involved with this lawsuit since 2006, if this filed an amicus brief for defendants’ motion to dismiss. That appearance was historic. It marked the very first time that any entity from the Government of China had made an appearance being an amicus, described towards the district court that MOFCOM had directed the defendants’ conduct, and endeavored to explain the different regulating systems accustomed to compel defendants’ compliance.

MOFCOM includes a compelling curiosity about this appeal since the district court declined to defer to MOFCOM’s interpretation of Chinese law and introduced its very own contrary look at what Chinese law needed from the defendants. Furthermore, the district court implied that MOFCOM’s interpretation wasn’t just wrong, but deliberately false: “a publish-hoc make an effort to shield defendants’ conduct from antitrust scrutiny.” That charge is profoundly disrespectful, and wholly unproven.

MOFCOM files this brief to create straight the record about its regulating and lawsuit conduct to make sure that this Court is aware of china Government’s displeasure concerning the district court’s management of MOFCOM and also to urge turnaround of the judgment below, which unfairly penalizes a Chinese company for submission with Chinese law. . . . .

The district court refused summary judgmentAnd didn’t question the fundamental tenets from the foreign sovereign compulsion doctrine, but held based on its independent assessment of Chinese law, as well as in direct contradiction to MOFCOM’s interpretation, that Chinese law “did not compel defendants’ conduct.” . . . The district court acknowledged that both Top Court and also the Second Circuit have held that the foreign government’s statement in regards to the concept of its very own law is “‘conclusive’” of this law’s meaning. . . . .

The district court then introduced it might “decline to defer to [MOFCOM’s] interpretation of Chinese law,” . . . stating this Court’s statement that “[w]here an option between two interpretations of ambiguous foreign law rests carefully balanced, the support of the foreign sovereign for just one interpretation furnishes legitimate assistance.” . . . The district court made an appearance to attract out of this that deference is unnecessary if your foreign law real question is not “finely balanced,” and outlined its cause for declining to defer within this situation. . . . The district court first stated the 2009 statement was “particularly undeserving of deference” because it didn’t “cite to the [specific] sources to aid its broad assertions concerning the regulating system regulating ascorbic acid exports,” contained “ambiguous terms and phrases,” and didn’t “distinguish between” the 1997 and 2002 export regulating regimes. . . . The district court conceded, however, that MOFCOM’s amicus brief, which this year’s statement specifically depended, “attempted to describe the regulating system regulating ascorbic acid exports by stating to, and talking about, specific governmental directives and Chamber documents.” . . .

The district court next pointed to claims China had made around the world Trade Organization (“WTO”) showing that “‘export administration … of vitamin C’” stopped on The month of january 1, 2002. It stated that this statement “appear[erectile dysfunction] to contradict [MOFCOM’s] position within the instant lawsuit,” and considered mtss is a “further reason to not defer.” . . .

Third, the district court mentioned that “more careful scrutiny of the foreign government’s statement is warranted” when “the alleged compulsion is incorporated in the defendants’ own self-interest.” . . . . Finally, the district court opined that “the factual record opposes [MOFCOM’s] position.” . . .

Getting thus figured that it wouldn’t defer to MOFCOM’s interpretation of Chinese law, the district court carried out a completely independent overview of Chinese law, including documents a legal court referred to as “traditional causes of foreign law.” . . . . The district court at points recommended it might depend around the “plain language” of those documents, . . ., nevertheless its analysis also contained a number of inferences on how to interpret Chinese legal texts. None of individuals inferences was premised, a minimum of specifically, on any principle of Chinese law. . . .

The district court erred by disregarding MOFCOM’s formal claims of Chinese law, performing a completely independent study of that law according to “plain language” of converted texts and ungrounded presumptions on how to interpret Chinese law, and proclaiming that MOFCOM’s interpretation of Chinese law was exactly backwards. The court’s erroneous conclusions weren’t based on any resolution of any Chinese government official, Chinese court, or Chinese scholar, but uncovered Chinese companies to massive class-action antitrust liability for conduct occurring exclusively within China. Several companies produced to that particular in terrorem pressure and settled. The rest of the defendants face a nine-figure judgment that needs to be vacated not less than three good reasons.

First, the district court unsuccessful to follow along with Top Court precedent holding that the foreign government’s formal claims concerning the interpretation of their own law are “conclusive” in American courts.

Second, the district court overlooked comity concerns that at least demand that “conclusive” deference to such claims should be given when foreign sovereign compulsion is asserted like a defense inside a private antitrust suit. The foreign sovereign compulsion doctrine owes its expereince of living towards the recognition that significant questions of worldwide law and comity would arise if U.S. courts permitted American law to override an overseas sovereign’s contrary command on how to organize its very own domestic commerce. Whenever a foreign sovereign seems in this situation to state what it really required of the defendant, it shouldn’t most probably to some district court to deny the command was handed.

Third, the district court specifically “decline[d] to defer to [MOFCOM’s] interpretation of Chinese law.” Rather, the district court simply resolved all queries because it saw fit, using self-made interpretive canons not grounded in Chinese law, and therefore arrived at a conclusion that’s unlike Chinese law.

The district court’s approach and result have deeply troubled china government, that has sent a diplomatic note regarding this situation towards the U.S. Condition Department. This Court should reverse, and in that way reaffirm that concepts of worldwide comity require district courts to deal with official claims of the foreign government having a high amount of deference and respect, with due caution concerning the court’s capability to determine precisely what the law states of the unfamiliar legislation. . . .

The district court stated that China’s claims towards the WTO it had quit “‘export administration … of vitamin C’ by The month of january 1, 2002,” “appear to contradict” MOFCOM’s position that Chinese law ongoing next date to want industry coordination of export cost and quantity. . . . That conclusion, however, reflects a fundamental misunderstanding from the technical trade-policy context by which individuals claims were created.

The claims reported through the district court connect with a “transitional review” by which China participated following its 2001 accession towards the WTO. Each statement provides partly that “on 1 The month of january 2002, China threw in the towel export administration” of certain goods, including “vitamin C.” However in context-so that as shown by the titles that preceded them-these claims indicated that China abandoned “restrictions on exports through non-automatic licensing” with that date, and never that China removed every existing export restriction in a single stroke.

Another document reported through the district court unambiguously shows that this more limited studying is exactly what China intended. That document . . . is really a report through the WTO Secretariat summarizing its “trade policy review” regarding China. Stating among the two “export administration” claims described above, the WTO Secretariat described that “[o]n 1 The month of january 2002, China eliminated export quotas and licenses for … Ascorbic Acid.” Thus, the WTO Secretariat specifically construed China’s earlier “export administration” claims to connect with abolition of “export quotas and licenses for … Ascorbic Acid,” although not other types of export regulation.

The U . s . States government adopted exactly this same construction inside a 2009 WTO dispute resolution proceeding, alleging (as China later acknowledged), that China had maintained “a system that stops exportation unless of course the vendor meets or surpasses the minimum export cost.” Quite simply, the U . s . States adopted the identical position in WTO dispute settlement proceedings that MOFCOM has advised within this situation: after 2002, China was still being needing exporters to follow a cost-setting regime. China’s claims towards the WTO, accordingly, did . . .not provide any foundation for the district court to won’t accord MOFCOM deference. . . .

MOFCOM grants or loans that the district court that faces a contested question of foreign law without any the help of an overseas government frequently may have no choice but to understand the nettle and do its best. But here, the district court’s confusion was self-caused. MOFCOM offered an authoritative look at Chinese law. The district court erroneously declined that assistance after which, predictably, floundered in the make an effort to discern the whole process of an intricate foreign regulating system. The district court rather must have deferred, because it unquestionably could have been needed to complete were built with a U.S. regulator presented an similar statement inside a brief. . . . Its failure to do this, or at least to use Chinese legal concepts to the independent analysis, requires reversal.”


On March 31, 2014, Judge Armstrong of the California Federal District Court rejected the Chinese solar companies’ motion to dismiss The Solyndra Residual Trust vs. Suntech Power Holdings, Suntech America, Trina Solar Limited, Trina US, Yingli Green Energy Holding Ltd, Yingli Green Energy Americas Inc (“Solyndra v. Suntech”) antitrust case.  In the attached decision, Solyndra order denying motion to dismiss Judge Armstrong stated:

“According to Plaintiff, the alleged price fixing scheme which led to the demise of Solyndra and numerous other American solar panel manufacturers was perpetrated by Suntech, Trina and Yingli (all of which are publicly-traded on the New York Stock Exchange), and their respective American alter egos, Suntech America, Trina U.S. and Yingli Americas. . . . Defendants are members of the China New Energy Chamber of Commerce (“China New Energy”), a trade association which has the stated purpose of promoting “collaboration” amongst its members. . . . Through China New Energy, Defendants were able to meet regularly and develop a coordinated pricing and output strategy aimed at dominating the United States solar panel market. . . .

Defendants, desiring to dominate the United States market for solar panels, became concerned with the innovation presented by Solyndra’s technology. . . .  To that end, Defendants allegedly formed a conspiracy to “dump” (i.e., to price their panels below cost) their solar panels in the United States market.  . . To that end, as demand for solar panels was rising, Defendants acted contrary to “rational economic rules” by “slash[ing] their prices in an effort to aggressively capture market share and drive competition from the marketplace.” . . .

Defendants also are alleged to have used China New Energy to fix prices at artificially low rates. . .  . Each year since founding in 2006, China New Energy has held an International Forum (“Forum”), at which the chairs of Suntech, Trina and Yingli have been featured speakers. . . . Defendants allegedly used China New Energy’s annual International Forum as a means of meeting and communicating with one another and reach agreements to fix and lower prices.  . . . After each Forum, prices charged by each of the Defendants fell precipitously. . . .For example, after meeting during the second Forum which held on December 11-12, 2007, Defendants lowered their prices by 40%.  . . . This pricing behavior “shocked” even seasoned industry analysts, who had predicted price reductions of only 5% per year.  . .

As prices for Chinese solar panels in the United States plummeted, American solar manufacturers could not keep pace.  .  . Since 2010, “at least twelve domestic U.S. manufacturers have shut down plants, declared bankruptcy, or staged significant layoffs.” . . .

In contrast, Defendants now occupy a dominant position in the American solar panel market, and by the end of 2011, controlled 65% of the rooftop solar market. . . . Correspondingly, Defendants’ net revenues soared, with Suntech’s net revenue alone increasing to $3.1 billion in 2011 from $1.6 billion in 2009. . . .

Here, the pleadings specifically allege facts that are more than sufficient to suggest that Defendants reached an agreement to fix prices and flood the American market with their below cost Chinese-made panels for the purpose of stifling competition. The FAC alleges that Defendants effectively controlled their industry trade organization, China New Energy, and held meetings at its annual Forums to coordinate their market strategy including the coordinated, drastic lowering of prices to dominate the American market for solar panels. After each Forum held between 2007 and 2010, Defendants’ prices uniformly fell precipitously. These uniform price decreases were completely unanticipated within the industry, given that it was economically irrational to slash prices so significantly in the face of rising demand. . . . . Allegedly as a result of Defendants’ predatory and collusive conduct, Solyndra and a host of other American competitors went out of business, while Defendants correspondingly increased their sales and market share in the United States. . . .

Construing these allegations in a light most favorable to Plaintiff, the Court finds that they are sufficient to present a plausible claim that Defendants formed an agreement to restrain trade.”


Commentators have observed that governments are increasingly using antitrust and other regulatory powers for broader political and economic purposes and following the Commerce Department’s lead, the Chinese government is doing the same.

On January 28, 2014, there was a report out of China that Qualcomm is facing a record antitrust fine of $1 billion in an antitrust case from China’s National Development and Reform Commission (NDRC).

In the US National Trade Estimate report, its annual reports on trade barriers, released on March 31, 2014, 2014 NTE Report on FTB the USTR expressed concerned about the deteriorating conditions for US companies operating in or hoping to export to China across a broad range of sectors, due to selective anti-monopoly law enforcement.  With regards to stepped-up enforcement of anti-monopoly laws by China’s National Development and Reform Commission (NDRC), the USTR stated in its March 31st report:

“Anti-Monopoly Law

The Chinese government’s interventionist policies and practices and the large role of SOEs in China’s economy have created some uncertainty regarding how the Anti-Monopoly Law will be applied. One provision in the Anti-Monopoly Law protects the lawful operations of SOEs and government monopolies in industries deemed nationally important. To date, China has enforced the Anti-Monopoly Law against SOEs, but concerns remain that enforcement against SOEs will be more limited.

In 2013, NDRC increased its enforcement activity noticeably, particularly against foreign enterprises. In addition, U.S. industry has expressed concern about insufficient predictability, fairness and transparency in NDRC’s investigative processes, including NDRC pressure to “cooperate” in the face of unspecified allegations or face steep fines. U.S. industry also has reported pressure from NDRC against seeking outside counsel, in particular international counsel, or having counsel present at meetings.”


A recent report by John Yong Ren, a well-known Chinese antitrust lawyer, states that there was an explosive growth in antitrust cases under China’s anti-monopoly law in 2013, with even more cases coming in 2014.  T&D Monthly Antitrust Report of March 2014

It was reported that both the Justice Department and now the NDRC have started investigations of Auto Parts and are targeting capacitor manufacturers.


On March 11, 2014, in the attached complaint, AGFEED COMPLAINT the Securities and Exchange Commission (“SEC”) filed suit against Agfeed Industries, Junhong Xiong, Selina Jin, Songyan Li, Shaobo Ouyang, Edward J. Pazdro and K. Ivan Gothner for accounting fraud.  The SEC sued bankrupt AgFeed Industries Inc. and former principals of the company over an alleged accounting fraud scheme, in which revenues were inflated by $239 million in order to boost the industrial hog producer’s stock price.

Four executives at the China-based but U.S.-traded company purportedly used a variety of methods to inflate revenue from 2008 through 2011, such as faking invoices for sales of feed and nonexistent hogs, which executives later tried to cover up by claiming the bogus hogs had died.

According to Andrew J. Ceresney, director of the SEC’s Enforcement Division, “AgFeed’s accounting misdeeds started in China, and U.S. executives failed to properly investigate and disclose them to investors.  This is a cautionary tale of what happens when an audit committee chair fails to perform his gatekeeper function in the face of massive red flags.”

According to the SEC the fraud started in China and U.S. management eventually got wise to the fraud, which included keeping two sets of books: one for insiders with accurate information, and one with inflated figures shown to outside auditors. But instead of intervening, US management moved to spin off the company’s feed division and reported nothing about the incident to law enforcement or investors.


On April 2, 2014, the federal government indicated six foreign excellent within an alleged conspiracy to bribe Indian authorities to approve a $500 million titanium mining project.

Dmitry Firtash, recognized by prosecutors because the leader from the alleged conspiracy, co-is the owner of RosUkrEnergo using the Russian gas company Gazprom, and controls worldwide conglomerate Group DF that is the owner of several mining companies.

Firtash was arrested in Vienna on March 12 and then launched on about $174 million bail. Prosecutors are trying to find forfeitures of approximately $10.six million in the defendants.

Prosecutors furthermore want Firtash to forfeit his interests in Group DF and it is assets, including greater than 150 companies within the British Virgin Islands, Europe and Cyprus. The foreign excellent address two decades imprisonment which are more serious charges and as much as millions of dollars in fines.

In announcing the indictment within the attached statement, FOREIGN People PROSECUTED UNDER FCPA the Justice Department mentioned:

“Fighting global corruption belongs to the material from the Department of Justice,” stated Acting Assistant Attorney General O’Neil. “The charges against six foreign excellent introduced today send the unique message that we’ll root out and attack foreign bribery and produce to justice individuals who incorrectly influence foreign authorities, wherever we discover them.”

“Criminal conspiracies that stretch beyond our edges aren’t beyond our achieve,” stated U.S. Attorney Fardon. “We uses all the tools and sources open to us to guarantee the integrity of worldwide transactions which involve U.S. commerce.”

“This situation is yet another illustration of the FBI’s readiness to strongly investigate corrupt conduct round the globe” stated Special Agent in control Holley. “With the help of our police force partners, both foreign and domestic, we is constantly pursue individuals who allegedly bribe foreign authorities to acquire lucrative business contracts.”

Tom Gorman, a Dorsey partner within our Washington Electricity office, who formerly labored within the SEC enforcement division, has described this indictment the following:

“FCPA enforcement authorities have frequently emphasized they intend to pay attention to people as a good way of halting possible violations. A situation unsealed yesterday underscores this time.Inches

See his entire article on his blog at


On March 10, 2014, in SEC v. China Intelligent Lighting & Electronics Corporation. et al, a brand new You are able to Federal Judge released the attached default choice NDEF IDEF in support of the U.S. Investments and Exchange Commission and against two Chinese electronic companies charged with misleading traders about using money from public choices, ordering the businesses to pay for as many as almost $33 million.


On March 27, 2014, the SEC sued against World Capital Market Corporation, WCM777 Corporation. WCM777 Limited. d/b/a WCM777 Businesses and Ming Xu a/k/a Phil Ming Xu and Kingdom Capital Market, Manna Holding Group, Manna Source Worldwide, WCM Sources, Aeon Operating and PMX Jewels for investments fraud. As described within the attached complaint SEC WORLD CAPITAL Marketplaces,

“This matter involves a continuing pyramid plan, Ponzi plan, and misappropriation of investor funds with an unregistered investments offering that targets people from the Asian-American and Hispanic-American towns, in addition to foreign traders. Beginning around March 2013 and ongoing to the current, operating underneath the offering name “WCM777,” Defendants have collected over $sixty five million from traders within the U . s . States and abroad. Of this amount, over $28 million was deposited into accounts within the U . s . States between March and October 2013. After October 2013, Defendants deposited investor funds right into a banking account in Hong Kong.”

Apparently, the traders were not just in the united states, but additionally in China and Hong Kong.

Within the attached complaint, a Kaira Berkowitz has filed a class action lawsuit investments situation against Sino Gas and many Chinese people and firms. SINO GAS