Trade: Obama team acts to stem practice of 'dumping' imports in US

The Obama admistration announced steps Thursday designed to strengthen enforcement of US trade laws – a move intended to combat Asian nations' alleged "dumping" of products at artificially low prices.

Citing the goal of a "level playing field for US companies," the Commerce Department proposed a range of measures that could go into effect as early as this fall, after a period of public comment and review.

Although many of the proposals target allegedly illegal import practices by China and other nations, the moves come as part of a broader administration effort focused on improving the climate for US exports. President Obama has set a goal of doubling US exports within five years through a National Export Initiative, and creating as many as 2 million new jobs in the process.

“The Obama administration is committed to aggressively enforcing our trade laws to ensure a level playing field for U.S. companies and their workers – the engines of our economic growth,” Commerce Secretary Gary Locke said in a statement announcing the proposals. “Today’s announcement is another demonstration of our continuing efforts to sharpen our trade enforcement tools.”

Both before and after the onset of recession in 2007, trade has been a trouble spot in the US economy. Imports perennially outpace American exports, at a rate that many economists say will prove unsustainable. This trade deficit in effect means that the nation is borrowing to finance present-day consumption by households.

The trade deficit narrowed during the recession, as the financial crisis took a harsh toll on global commerce. Recently, however, imports have been rebounding faster than exports. Because exports add to the US gross domestic product, and imports subtract from it, this trend represents a headwind to the US economic recovery.

The problem can also be phrased in stark political terms: Some critics of US policy say too many of the stimulus dollars from Washington are flowing, in the end, to overseas corporations rather than helping to create new jobs in the US.

At the same time, even economists who worry about the trade deficit aren't necessarily advocates of a get-tough trade policy. Many argue that efforts to crack down on trade violations could backfire, crimping commerce that, despite the trade deficit, benefits consumers and economic growth.

The Commerce Department proposals would be subtle efforts to tighten US policy. Some examples include:

• Expanded use of random sampling to select companies for investigation for suspected dumping, rather than choosing the largest exporters.

• Clarifying a rule to require companies from nonmarket economies to report broad production-inputs data – not data from facilities that produced merchandise destined for the United States (for use in dumping calculations).

• Strengthening the accountability of attorneys and nonattorneys practicing before Commerce.

• Tightening the deadlines for submitting new factual information in antidumping cases.

Already, a branch of the Commerce Department has increased dumping investigations, with 34 probes initiated in 2009 versus 19 the previous year.