A Study Of Legal Issues On Recognizing Domestic Industry In Section 201

Section 201 of the Trade Act of 1974 of United States (Section 201 for short in the following), enacted according to the safeguard clause in the international trade agreements, is the legal means and tools for U.S. to protect the domestic industry. Section 201 authorizes United States International Trade Commission (USITC for short in the following) and the President considerable discretion, and the USITC can use Section 201 at any time for the sake of protecting his domestic industry. Different from the multilateral regulations of WTO, Section 201 is a unilateral measure. Whether the other country's trade practice is right or wrong will be completely judged by the USITC according to his own standard. The ultimate aim of U.S. safeguard measures is to protect the safety of his domestic industry and home market well, and to keep them from being subjected to the fierce competition from foreign imported products. If every nation imitates the way of the U.S. and assumes the same rules as Section 201 to deal with his own trade partner, the multilateral trade mechanism will be none-existing. The standard of recognizing "related industries" in Section 201 plays an important role for U.S. to abuse Section 201, and the differences of the standard of "related industries"among Section 201, "Agreement on Anti-dumping", "Agreement on Subsidies and Countervailing Measures" and "Agreement on Safeguards" is key to the Sino-American trade friction. The analysis and comparative studies of the "related industries" and other related legal regulations can make a great sense for understanding United States trade law better, studying the right ways and measures for China to safeguard her export and domestic industry and maintaining the trade benefit under the system of WTO rules. Through the systematic analysis of Section 201 of the Trade Act of 1974 and the related WTO regulations, using the comparative and empirical analysis method, give some suggestions to perfect our country's safeguard measure system.The article will be divided into four parts.The first part is about elaborating the background and development of Section 201, which include three aspects---economic background, political background, and theoretical basis. There are two major periods, which are the executive orders dominating and the law dominating, in Section 201 formation. Especially, the evolvement of the regulations on the "related industries" reflects that U.S. trade policy is changed for several times. Combining with the regulations of the "related industries"in GATT1947, the relationship between GATT1947 and Section 201 will be elaborated.The second part is about the concrete contents of the "related industries" in Section 201, which include the definition of "domestic industry " and the recognizing standard of "like or directly competitive products ".In this part, the "geographical industry analysis" of the USITC, which is applied while recognizing some industry is whether "domestic industry" or not, will be specially elaborated. In the foundation of comparative studies and analysis of "domestic industry" in Section 201 with the one in WTO "Agreement on Anti-dumping" and "Agreement on Subsidies and Countervailing Measures", the principle of U.S. safeguard measures law will be revealed, which is that U.S. still expands the range of "domestic industry" as widely as possible and search for so-called law basis to practice an unilateral trade protectionism.The third part is about the conflict between Section 201 and the WTO "Agreement on Safeguards" in stating "related industries".Firstly,the article will define the scope of "domestic industry" stated in WTO "Agreement on Safeguards " with the aspects of the content and definition of "like products", "directly competitive products", "whole or a major proportion" and "domestic". In the comparative research of Section 201 and WTO "Agreement on Safeguards", it is clearly recognized that there are several differences between them, expect for the difference of the legal nature which is obviously, this provides a good base for us to research Section 201 completely. In the end, combining the empirical analysis of the practice of Section 201 on typical cases of WTO, a more concrete cognition of the practice of USITC defining "domestic industry" and the attitude of WTO Dispute Settlement Body(DSB) to this will be formed.The fourth part is about comparing "PRC Regulation on safeguard measures" and Section 201, especially the differences of the regulation of "related industries", and concludes the shortage of "PRC Regulation on safeguard measures". Based on the discussing, draws on some implications for China and gets the measures of perfecting "PRC Regulation on safeguard measures".