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Preliminary injury determination
08/12/2022 10:30
Within 45 days after the petition is filed, the Commission must make a preliminary determination of whether there is evidence of injury to the domestic industry. Unlike most other phases of the investigation, there is no possibility of an extension. The Commission must make its determination in 45 days, based on whatever information is available.
The standard of proof in the preliminary injury determination is quite low. The domestic industry need only show that there is a 'reasonable indication' that an industry in the United States has been materially injured or is threatened with material injury. If the preliminary injury determination is negative, the anti-dumping investigations by the Commerce Department and the Commission will be terminated. If the preliminary injury determination is affirmative, the investigations will continue.
This first stage in an anti-dumping investigation is the threshold determination required by the General Agreement on Tariffs and Trade (GATT) to stop cases that are groundless. Unfortunately, the standard of proof is so low that most preliminary injury determinations are affirmative. In the past several years, the Commission has made negative preliminary injury determinations in approximately 15% of the cases filed.
The procedure for a preliminary injury determination is simple and quick. Approximately one week after the petition is filed, the Commission publishes a schedule for the preliminary determination in the Federal Register. A public hearing is held, but only the Commission staff attends, not the Commissioners who ultimately make the decision. During the hearing, interested parties can submit arguments and information that they feel would help the Commission in its decision-making. The Commission staff sends out questionnaires to members of the domestic industry, to importers of the merchandise under investigation, and to foreign producers to collect information needed for the investigation. Because of the severe time constraints, however, the quality and quantity of information collected for the preliminary injury determination is often extremely limited.
Even though a foreign company's chances of success are small, there are two important reasons to participate actively in the preliminary injury determination. First, sometimes domestic industries bring anti-dumping cases with fundamental flaws that foreign respondents can help reveal to the Commission. For example, in 2002 one United States company filed an anti-dumping case even though the company was itself one of the largest importers of the merchandise against which the case was filed. The Commission made a negative determination in that case. The chances of success may be small, but the benefits of avoiding the remainder of the investigation are worth the effort.
Second, even if the case survives the preliminary injury determination, many anti-dumping cases can be defeated in the final injury determination. In the past several years, the Commission has made negative final injury determinations in approximately 30%-40% of the cases. By participating actively in the early stages of the investigation, foreign exporters can often persuade the Commission to frame the issues in a favourable way and thus increase the likelihood of success later when the Commission conducts its more detailed final injury investigation. Not participating in the preliminary investigation runs the risk that the petitioner will be able to frame the issues in the investigation in the way most favourable to the petitioner's point of view.
The foreign company should note that injury determinations — at both the preliminary and final stages — are based on all United States imports from the exporting country. The Commission does not make separate injury determinations for individual companies. If there is injury 'by reason of imports from a country, all companies exporting to the United States from that country will be included in the injury finding. In most cases, the Commission will also consider together all the imports from different countries under investigation.
