22 May 2008

CIT Says Importer Can Challenge Continued Imposition of Trade Sanctions

This article is excerpted from the 22 May 2008 edition of “World\Trade Interactive”.

The Court of International Trade recently took up again a case concerning the sanctions the U.S. maintains against the European Union in retaliation for its ban on imports of hormone-treated beef.

Plaintiff Gilda Industries Inc. has been trying for years to get the toasted breads it imports from Spain off the beef retaliation list pursuant to a statutory provision that requires the Office of the U.S. Trade Representative to periodically revise its sanctions lists unless one of two conditions is met. In a previous round of litigation the CIT dismissed Gilda’s case after ruling that one of these criteria had been satisfied; namely, that the affected U.S. industry found it unnecessary to revise the retaliation list.

In a separate case filed last December, Gilda argued that the USTR’s authority to impose 100 percent duties on the EU products on the beef retaliation list terminated as a matter of law on July 29, 2007, pursuant to 19 USC 2417(c). This statutory provision states that a measure (such as retaliatory sanctions) imposed to enforce U.S. trade rights must terminate after four years unless either the petitioner or a representative of the domestic industry that benefits from that measure submits a written request for its continuation.

The government argued that Gilda does not have prudential standing to sue under 19 USC 2417(c) because it cannot prove an indication of implicit or explicit congressional intent in the trade rights enforcement law to grant protection to importers. The CIT rejected this position, stating that it directly contravenes the Supreme Court’s directive that “there need be no indication of congressional purpose to benefit the would-be plaintiff” and that a “cause of action for review of [agency] action is available absent some clear and convincing evidence of legislative intention to preclude review.” …

Because Gilda is required to pay duties pursuant to a trade rights enforcement action taken by the USTR, its implicit interest in maintaining profit, remaining competitive and doing business in imported merchandise is arguably regulated by the relevant statute.

The court overruled another government argument against Gilda’s standing to file suit in finding that Gilda’s interest in not paying the retaliatory duties, particularly when none of the intended beneficiaries has come forward to request the continued imposition of those duties, is not contrary to the purpose of the trade rights enforcement law…. The court added that even though it is clear that Gilda’s ob