The United States' international trade laws strictly enforce antidumping ("AD") rules, and its antitrust laws effectively oversee private settlement agreements. However, these two distinct, yet related, areas of law both fail to adequately address the legality of private post-order settlement agreements that occur in the shadows of the AD process. This Comment investigates the legality of such settlements and reveals how domestic firms are exploiting the overlap between AD and antitrust laws so as to circumvent both. Being fully aware that AD administrative reviews create costly uncertainty for foreign firms, domestic firms exploit this uncertainty and pressure their foreign competitors into agreeing to lucrative cash settlement agreements. Though these settlements frustrate the object and purpose of AD laws by incentivizing unfairly priced imports, the settlements sidestep existing AD laws and are not prohibited. Normally, such collusive efforts to disrupt trade would create immediate antitrust liability, but the Noerr-Pennington Doctrine, with its First Amendment foundations, immunizes domestic firms from liability. This Comment takes a closer look at the legal implication of these settlement agreements in both antitrust and international trade contexts. It then suggests ways to restore the functional effectiveness of AD laws.
Within the United States' international trade framework, domestic industries can exploit U.S. antidumping ("AD") laws to seek private monetary gain, restrain trade, and harm competition.1 Though this practice is not new, it operated almost entirely in secrecy until the International Trade Commission ("ITC") recognized its existence during a recent investigation.2 The discovery of this practice even caused one ITC Commissioner to proclaim, "I cannot figure out for the life of me how [this practice is] actually legal."3 The ITC, however, lacked the jurisdiction to address the legality of this practice.4
The United States maintains a system of trade laws to facilitate international commerce and protect domestic industries from unfair competition.5 Specifically, AD laws strive to overcome the harmful effects of dumping, a practice that occurs when a foreign firm sells goods in the U.S. market at unfairly low prices.6 To prevent these artificially low-priced goods from affording an unfair competitive advantage to foreign firms at the expense of domestic industries, the U.S. government assigns AD duties to foreign goods that are dumped in the U.S. market.7
The duty rates, however, are non-permanent and are subject to annual administrative reviews.8 These reviews create costly uncertainty for foreign firms, and domestic industries are quick to exploit this uncertainty by pressuring foreign firms into lucrative settlement agreements.9 Under these agreements, those foreign producers subjected to the AD order ("subject foreign producers") make cash payments to domestic producers, who then withdraw the petitions for administrative reviews, allowing foreign producers to avoid the costly review process.10
These collusive settlement agreements raise important antitrust concerns because they involve private price and quantity agreements that actively restrain commerce, as well as efforts to use government processes for improper purposes.11 However, due to retrospective AD procedures and First Amendment exceptions to antitrust rules, these settlements are likely permissible under both AD and antitrust laws.12 Thus, though the ITC may be "very troubled by [such] settlement agreement[s],"13 an unlikely intersection of international trade and antitrust laws allows domestic industries to circumvent both sets of laws and thus immunize themselves from any actionable liability.
This Comment addresses whether these private post-order settlement agreements are, in fact, legal under existing AD and antitrust frameworks and, if they are legal, how U.S. laws can adapt to account for these settlements. …