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Adams C. Lee

Bipartisan Effort Emerges To Salvage Trade Tool Targeting Chinese Subsidies
January 31, 2012, Dow Jones Newswires

A federal appeals court ruling prohibits the US Commerce Department from imposing countervailing duties on imports from non-market economies, such as China. China has also successfully challenged at the World Trade Organization (WTO) the US tactic of using countervailing and antidumping duties at the same time. As a result, many are calling for Congress to pass legislation that would address the court's decision.

But Adams Lee, counsel in the international trade group at White & Case, said he believes any legislation to deal with the US case would likely result in additional challenges at the WTO.

"Congress could devise a patch that would buy them more time to continue their practice even as the WTO appeals work their way through," said Lee, whose firm often represents foreign firms in trade remedy cases, though has also represented US firms. Indeed, the firm currently represents a Chinese producer in a Commerce investigation over imports of steel wheels and plans to argue that the case should be dropped in light of the recent appeals court decision.

Lee expects Commerce to seek a rehearing with the federal circuit court. If that request is rejected, the case could end up with the Supreme Court.

In the meantime, it's unclear whether the administration will be able to garner enough bipartisan support for trade legislation in an election year, he said.

"Although anti-China legislation might be attractive for certain members of Congress to push in an election-year, the political climate has become so poisoned, it might be difficult to get this issue through quickly," said Lee.