Issue link: https://read.dmtmag.com/i/65232
LEGAL LINE Continued from page 15 to ask the U.S. government for help. USGET hires a lawyer who prepares a complaint to the United States International Trade Commission. Th e ITC then conducts an investigation to determine if it will take the case and move to step two, an actual anti-dumping or coun- tervailing duty proceeding. Here is where politics comes in. How many jobs and taxes are going to be aff ected if USGET hits the wall? Th e local house Representatives and state Senator need to get on board and lobby the ITC, and if there is an industry group, it needs to step up as well. On the other side might be the counter- parts from the location of BB's domestic importer or even a large customer. If the "good guys" prevail by establishing a threshold of harm or imminent harm to their company or industry, then the ITC will certify the matter to a full investigation and "trial" before the ITC. In this process, ITC investigators will look into the complainer's books and records, those of the foreign competitor (if volunteered) and other market factors. All of this is confi den- tial and sealed to the ITC until trial. Th is investigation will include going overseas and inspecting plants and records, interviewing and obtaining records from USGET's and BB's customers and others, with the power to compel production of records and representatives, but only in the United States. 52 If the foreign competitor refuses to provide informa- tion, the penalty is that they cannot present anything in the proceedings that they have not disclosed, and then the ITC can look at only what the com- plainer provided and the ITC's own investigation. In one case back in the late 1980s, the American undercar- riage producers and compo- nent forgers complained that Italian and Spanish undercar- riage makers and forgers were being subsidized by direct pay- ments from their governments for export assistance. Th ey convinced the ITC to take and go forward with their case. Th e lineup was soon estab- lished: the American under- carriage industry and a key OEM's union, the UAW, on one side and the foreign producers and a large U.S. OEM on the other. Wait, wasn't the OEM an American company? In reality, the OEM wanted to defeat its own supplier's complaint so that it could continue to drive down U.S. prices using the subsidized and dumped foreign competition as the hammer. Aſt er two years of ITC investigative proceedings and a full scale trial before the ITC, the result was a sliding scale penalty duty of 4-5 percent on forgings only, which was not even remotely eff ective and caused the American industry to disappear forever from the undercarriage business, OEM and aſt ermarket. What happened? Under- currents were and always will be at work in these situations. Th e politicians from both sides battled for the heart of the ITC and in this process, the fi red up ITC investigative and legal team that genuinely believed in the American industry story, was quietly re-assigned. An entirely new place-keeping/ face-saving team of unin- formed and disinterested ITC operatives and lawyers did little more than show up and sit down at the proceedings. It's that golden rule again: He who has the gold…. As I began this narrative, the new "golden fl eece" is the solar and wind power and equipment industry, started here and heavily-promoted by the government. Unfor- tunately, the economics are now becoming unsustain- able. Foreign competitors are fl ooding the market with solar panels and windmills that sell to end users for less than the cost of manufacturing in the U.S. Th is puts the U.S. govern- ment in a nasty place: Keep the holy grail of renewable energy alive and continue to subsidize/ incentivize the adoption and use of these energy sources, but at the cost of turning the entire market over to foreign compet- itors and losing the domestic industry and its supply chain forever. Th is brings us full circle to: "What is fair trade?" Is it more unfair for Airbus to subsidize airliner development and sales prices with handouts from the governments of the "partner" countries in Airbus or to have the American government sub- sidize Boeing's civilian airliner business through the "military" part of Boeing with otherwise unjustifi able program and product pricing? Th ere is no easy answer in this mess. Governments will continue to meddle in industry and the marketplace, here and overseas. Politicians and government agencies will continue to be subject to "infl uence" in one form or another, and companies and industries will grow or wither and die in the harsh climate of "free trade. " Th e reality is that the captive markets of 19th and 20th century colonialism are long gone and so should be the thinking that went along with them. Every business has its strengths—engineering, production processes, supply and customer service chain management, patents, trade secret protections—and they are my suggestion for focus. Will the government help? Do they have the tools to help? Th e answer is a big maybe, and not one on which to hang a business plan. It's "free trade, isn't it? " McIntyre, Kahn & Kruse Attorneys 1301 East 9th Street Suite 2200 Cleveland, Ohio 44114 rmcintyre@mkkglaw.com 216-579-4114 fx 216-579-0605 IDA UNIVERSAL May-June 2012