Sunset reviews at the ITC and foreign participation

The Uruguay Round Agreement Act passed in 1994 required the review of antidumping duty orders every five years to determine whether an antidumping duty order should remain in effect. The United States International Trade Commission (ITC) has been criticized for its voting behavior in these reviews. It was opined that when foreign firms do not participate, those are the orders that should be revoked and when foreign firms do participate, those are the orders to be maintained. It was argued that foreign firms would only participate if they wanted to aggressively re-enter the U.S. market. This study focuses on ITC voting in these reviews and the foreign decision to participate. Two studies to date have looked at the ITC voting behavior in these proceedings. Whereas these previous works only studied review of the antidumping orders in place prior to January 1, 1995, referred to as "transitional reviews", this study included reviews through June 2002. Another difference is that this study relies on data from the ITC public reports whereas the previous studies used more aggregate data. This study attempts to analyze whether foreign firm participation and overt congressional pressure impacts decision-making at the ITC. The probit modeling results indicated that overt congressional pressure was not significant in ITC decision-making. The modeling results suggest that foreign participation may reduce the likelihood of the ITC to decide to maintain the dumping order. In criticizing the ITC on its voting behavior the assumption was made that firms only participate if they have the intention of aggressively re-entering the U.S. market. Is this the only consideration in the firm decision or are there other explanations such as firms attempting to free-ride? Again probit analysis was used to look at the characteristics that tend to increase foreign firm participation. This modeling provided mixed indications on the issue of potential free-riding. To get further at the intent of foreign firms, subject trade flows prior to the removal of the dumping duty were compared to trade flows of the same products after the revocation of the order. This analysis did not support the proposition that foreign firms only participate to aggressively re-enter the U.S. market.