Most Americans have never heard of the Import Administration,
a tiny agency tucked away in the Commerce Department headquarters along
Constitution Avenue in Washington, D.C. That's just fine for agency officials,
who have long adopted secrecy practices better suited to the CIA.
When George Bush was president, the Import Administration
required reporters to submit Freedom of Information Act requests to obtain
copies of officials' public speeches; today the agency's press officials
won't say what its annual budget is, nor how many people work there ($30
million, just under 300 employees). Spokesman Curt Cultice won't even
say how to spell his name. And he definitely doesn't entertain questions
like, "What's different at the Import Administration now that Bill
Clinton, who promised to bring change to Washington, is president?"
Mr. Cultice and his superiors have good reason to try
to remain out of sight. For if taxpayers knew more about the Import Administration,
they wouldn't be pleased. This is the agency that administers the U.S.
anti-dumping laws, the core of America's version of industrial policy.
If it worked better, the Import Administration might be likened to Tokyo's
powerful Ministry of International Trade and Technology. "MITI Without
Brains" is more like it.
The Import Administration's actions result in American
consumers paying more for everything from Chinese garlic to Colombian
flowers -- just two of a long list of products targeted for anti-dumping
duties. While the tariffs do protect a few thousand U.S. jobs, they do
so at an annual cost to consumers of at least $2.6 billion, according
to the Institute for International Economics.
To be sure, the basic problem doesn't stem from the
Import Administration bureaucrats. As with most problems in Washington,
Congress is the chief culprit. The anti-dumping laws, ostensibly aimed
at curbing "unfair" foreign trade, actually outlaw routine price-cutting
practices that promote competition and generally benefit consumers everywhere.
But as bad as these laws are, they're made worse by
the Import Administration. Here, unelected officials not only pick winners
and losers in the marketplace, but amass enough power to strike fear in
anyone who gets in their way.
Consider the story of Brian McLaughlin. He's the president
and CEO of Indiana-based Hurco Cos., one of the country's most innovative
machine-tool manufacturers. Nearly four years ago Mr. McLaughlin asked
the Import Administration to allow quotas on machine-tool imports from
Taiwan to expire at the end of 1991. He reasoned that the quotas only
harmed competitive companies like his, while propping up less-efficient
domestic manufacturers. But his free-trade views did not sit well with
some folks at the Import Administration. Without such quotas, these officials
would no longer be players in the machine-tool industry.
The bureaucracy quickly struck back. In 1987, when the
quota arrangements had been set, Hurco had been granted a special license
from the Import Administration to continue importing some machine-tool
components from Taiwan. But when Mr. McLaughlin lobbied to end the quota
system, the officials retaliated by revoking Hurco's license. Unable to
bring in Taiwanese parts, Hurco desperately scrambled to find other suppliers;
the previously profitable company was thrown into an economic tailspin.
Today, Hurco is still struggling to return to profitability.
I asked Jeffrey Garten, the undersecretary of commerce
who oversees the Import Administration, about the Hurco case in 1993.
He politely dodged the questions, but said he would look into the matter.
Nothing happened. When I pressed him on the subject again last April,
Mr. Garten blew up. "I don't care about Hurco," he blurted out
-- which accurately summarizes the attitude of the Import Administration
whenever confronted with complaints.
Many of the day-to-day operations of the Import Administration
are still run by a career official named Joseph Spetrini, the same bureaucrat
who yanked Hurco's import license. To see how Mr. Spetrini operates under
both GOP and Democratic administrations, consider his settlement last
March of a dumping case brought by the U.S. uranium industry against Russia.
The settlement set up a complicated scheme under which
Russians would be allowed to "dump" uranium in U.S. markets
as long as those sales were tied to those of higher-priced uranium sold
by domestic producers. Canada and other uranium-producing countries that
were excluded from the proposed cartel protested that it violates America's
legal obligations to free trade; and the Justice Department has warned
that Mr. Spetrini's scheme might violate antitrust laws. Even the U.S.
uranium industry that brought the original dumping case against the Russians
has howled that the settlement is legally dubious and unworkable.
But there's virtually no way to reverse Import Administration
decisions; the New York-based Court of International Trade is required
to uphold any Commerce action unless there is a serious abuse of discretion
involved.
Usually there isn't -- at least not legally. But in
practical terms the Import Administration abuses its authority all the
time. Every trade lawyer in Washington knows the game by now: When a U.S.
industry files a dumping case against some foreign company, the Import
Administration requires the foreigners to respond to lengthy questionnaires,
often sending so many queries that the foreigners can't respond in time.
That's when the Import Administration says "Gotcha," and sticks
on the highest possible duties.
This is precisely what happened to Usinor Sacilor, a
French steel company that was the subject of a complaint from U.S.-based
Inland Steel Industries Inc. After Usinor Sacilor was stuck with high
tariffs, it appealed to the Court of International Trade. Import Administration
officials admitted their questionnaire had been misleading to Usinor Sacilor,
but argued it didn't matter because Commerce had had its own deadlines
to meet. On Dec. 19, chief Judge Dominick DiCarlo ruled that Commerce
had abused its discretion and sent the case back to the agency. "In
this case, the court finds the interests of accuracy and fairness outweigh
the burden imposed upon the agency," he noted dryly.
But aside from an occasional court setback, the Import
Administration is virtually free of outside scrutiny. In fact the only
attention Congress lavishes on the agency is when lawmakers like Sen.
Jay Rockefeller (D., W. Va.) and Rep. Ralph Regula (R., Ohio) urge the
agency to protect steel industry constituents.
There's no sign that Republican free-traders, who now
run things on Capitol Hill, are paying any attention to what's happening
down the street at the Commerce Department. It's about time they did.
