The International Trade Commission (ITC) of the United States is an independent federal agency charged with providing foreign trade analysis and recommendations concerning foreign trade to the legislative and federal branches of the U.S. government. The ITC is bipartisan and objective in its operations.
The ITC was established in 1916 as the U.S. Tariff Commission. The agency took its present name in 1974. The ITC's goal is to determine the effect of imports on American industry. ITC economists also gather data on international trade and disseminate this information to various government branches and agencies, as well as the public. The ITC serves only in an advisory capacity. It cannot negotiate with foreign governments nor does it set policy. The ITC can, however, direct action against unfair trade practices relating to copyright, patent, and trademark infringement, and the ITC also revises and publishes the Harmonized Tariff Schedule of the United States. The responsibilities and duties of the ITC are defined in numerous legislative acts including the Tariff Act of 1930, the Trade Expansion Act of 1962, the Trade Act of 1974, the Trade Agreements Act of 1979, and the Omnibus Trade and Competitiveness Act of 1988.
A tariff is a duty or tax imposed by a government on imports and occasionally exports. The purpose of a tariff is to protect home markets. In the United States, Congress is the sole authority for regulating commerce with foreign countries. Since its inception, the U.S. government had been under pressure to create some sort of a tariff commission. As the economy grew and trade expanded so did the pressure for such a commission. It was felt by many that a nonpolitical independent agency could best provide the unbiased technical information required by the government to make sound trade and tariff decisions. In 1882 Congress created a temporary trade commission and in 1888 legislation was introduced to make the commission permanent. The bill passed the Senate but failed in the House in 1889. During President William Howard Taft's term in office (1909-13) he created a Tariff Board, but like its predecessor, it proved to be temporary. President Woodrow Wilson, under pressure from the U.S. Chamber of Commerce, the American Federation of Labor, and the Tariff Commission League, asked Congress to pass legislation creating a permanent tariff agency. The Tariff Commission was subsequently created in 1916. Under the Trade Act of 1974 it became the U.S. International Trade Commission with expanded powers and greater independence. The 1974 act removed the ITC's budget from the purview of the executive branch and gave the commission the power to review and issue remedies to trade infractions, subject to court review.
The ITC has many responsibilities and activities including: determining whether U.S. industries are being damaged by imports subsidized by a foreign government or imports priced less than their fair value; taking action against various unfair trade practices such as patent, trademark, or copyright infringement—subject to presidential approval; determining whether agricultural imports interfere with U.S. Department of Agriculture price-support programs; conducting surveys and gathering information on trade and tariff levels; monitoring import levels; developing uniform statistical data on imports, exports, and domestic production; and being involved in the establishment of an international harmonized commodity code. It is important to remember that the ITC does not make policy, negotiate trade agreements, or serve as a judicial body.
Two of the most important responsibilities of the ITC are determinating whether or not the fair importation of foreign goods is hurting a domestic industry and whether or not dumping is taking place. A domestic industry faces injury if competing foreign goods were to be brought into the country in overwhelming quantities. In such a scenario the ITC has the responsibility to recommend to the executive branch a rise in the tariff or an adjustment in the import quota of the good in question so as to protect the home industry. Dumping involves the importation and selling of foreign goods at less than the fair market price or the unfair subsidization of that imported good by a foreign government. Both actions could ultimately result in the home industry being forced out of business. In such a case increased duties equal to the dumping margin could be imposed. In matters of dumping allegations the ITC works closely with the U.S. Department of Commerce. The Commerce Department generally investigates whether or not dumping takes place while the ITC investigates as to whether or not a U.S. industry has been injured by the dumping practice.
Complaints of such unfair trade practices can be lodged with the ITC by representatives of an American industry. The commission has 30 days to decide whether or not to pursue the investigation. If the ITC chooses to investigate, it has one year to reach a decision. Complainants must show a relationship between the import and the injury and the relationship must be clearly documented. Such a complaint would be investigated by the commission's Unfair Import Investigation Division. The case could be tried before an administrative law judge and eventually appealed to a federal court. In such trials safeguards are often instituted so as to protect confidential technical information and marketing strategies.
The ITC is headed by six commissioners who are nominated by the president and confirmed by the U.S. Senate. From these six commissioners, no more than three of whom can be from any one political party, the president designates a chairman and vice-chairman. These two officers must be from different political parties and the chairman must be of a different political party than the preceding chairman. Both officers serve terms of two years while commissioners serve overlapping terms of nine years.
The ITC also has a Trade Remedy Assistance Office that aids small businesses and the public with relief from or benefits of U.S. trade laws. This office offers general information on the above as well as technical advice and legal assistance. The ITC also maintains its National Library of International Trade and the ITC Law Library.
[ Michael Knes ]
Dobson, John M. Two Centuries of Tariffs: The Background and Emergence of the U.S. International Trade Commission. Washington: International Trade Commission, 1976.
Hansen, Wendy L., and Thomas J. Prusa. "The Economics and Politics of Trade Policy: An Empirical Analysis of ITC Decision Making." Review of International Economics 5, no. 2 (May 1997): 230-45.
United States International Trade Commission. "U.S. International Trade Commission." Washington: United States International Trade Commission, 1998. Available from www.usitc.gov .