Biodiesel from Argentina and Indonesia

Transcription

1 Biodiesel from Argentina and Indonesia Why Trade Remedies Are Relevant for Energy Companies December 13, 2017 Mark Herlach Ryan Weiss 2017 (US) LLP All Rights Reserved. This communication is for general informational purposes only and is not intended to constitute legal advice or a recommended course of action in any given situation. This communication is not intended to be, and should not be, relied upon by the recipient in making decisions of a legal nature with respect to the issues discussed herein. The recipient is encouraged to consult independent counsel before making any decisions or taking any action concerning the matters in this communication. This communication does not create an attorney-client relationship between (US) LLP and the recipient. (US) LLP is part of a global legal practice, operating through various separate and distinct legal entities, under. For a full description of the structure and a list of offices, please visit

2 The Basics - Key Players and Issues Government Players US Department of Commerce (DOC) US International Trade Commission (ITC) US Trade Representative (USTR) Issues for Energy Companies Trade Remedy Cases Section 201 Solar Panel Investigation Free Trade Agreements NAFTA, KORUS, etc. Trade is a Political Issue 2

3 The Antidumping & Countervailing Duty Process Purpose Protects US industries from sales of products at less than fair value or from sales of products that benefit from subsidies. Investigations by both DOC and ITC. Process Investigations typically initiated following filing of a petition by domestic industry. DOC determines whether dumping or subsidies exist and calculates the additional duties necessary to alleviate unfair trade practices. ITC determines whether imports have injured the US industry. Remedy Antidumping and countervailing duties. Duties can be imposed up to 90 days prior to the publication of DOC s preliminary determination to counteract a surge of imports. 3

4 Biodiesel From Argentina and Indonesia Allegations Domestic biodiesel companies filed a petition in March 2017 alleging dumping and subsidization of biodiesel imports from Argentina and Indonesia. Also alleged unfairly produced imports have injured US biodiesel producers. Key Issues Impact of Domestic Incentives RFS Biodiesel Tax Credit State Programs Critical Circumstances 4

5 Case Timeline Petition Filed Filed by NBB Fair Trade Coalition March 2017 ITC Preliminary Determination Full investigations to proceed May 5 DOC Preliminary Determinations CVD Published: August 28 AD Published: October 31 DOC Final Determinations CVD Published: November 16 AD Pending (Expected Q1 2018) ITC Final Determination Found injury in CVD case on December 5 Vote in AD case expected Q Potential Appeals? U.S. Court of International Trade Must be filed within 30 days 5

6 Remedies Country Producer Countervailing Duty Rate Antidumping Duty Deposit Rate* LDC Argentina S.A % 54.36% Argentina Vicentin S.A.I.C % 69.91% All Others 71.87% 62.92% Wilmar Trading PTE Ltd % 50.71% Indonesia PT Musim Mas 64.73% 50.71% All Others 38.75% 50.71% *The antidumping duty rates are preliminary rates that may be adjusted in DOC s final antidumping determination. 6

7 Why Should Companies Care? Market Impact Potential for increased prices Associated attributes i.e., RINs Domestic Producers Potential market benefits Protects against unfair trade practices Importers No exceptions for existing contracts Impact on foreign investments Need to restructure supply chains Foreign Producers Potential foreclosure from US market Impact on existing investments 7

8 Trump Administration: 11 Month Report Increased number of trade remedy investigations Return to procedures not used in many years Section 201 Solar Panels Section 232 Steel and Aluminum cases Self-initiation of investigations on aluminum sheet Skepticism about benefits of free trade agreements TPP withdrawal NAFTA negotiations Threats to renegotiate KORUS China viewed as a trade adversary 8

9 I don t blame China, I blame the incompetence of past Admins for allowing China to take advantage of the U.S. on trade leading up to a point where the U.S. is losing $100 s of billions. How can you blame China for taking advantage of people that had no clue? I would ve done same! President Trump, November 9, 2017 (Twitter) 9

10 Outlook Will NAFTA survive? What happens if the US withdraws? Trade Remedies More self-initiated cases? Will Sections 201 and 232 be used more in the future? China Balance between trade and foreign policy (i.e., North Korea) What would a fair trading relationship look like? WTO fight over China s treatment as a market economy 10

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12 Mark D. Herlach Partner Ryan R. Weiss Associate eversheds-sutherland.com 2017 (US) LLP All rights reserved.