By Anna Jarman

Picture: Globe License: Public Domain

Last year, the “refugee crisis” experienced a political reckoning, as governments around the world sought to tighten boarders and curtail refugee-friendly policies where they had previously existed.  At the same time, the number of displaced people continued to climb in 2017, after it reached its highest number ever at 65 million people at the end of 2016.  The below events chronicle 2017’s most significant developments in the refugee crisis and the policy responses to it.

Travel Ban – Shortly after taking office, President Trump signed an Executive Order titled “Protecting the Nation from Foreign Terrorist Entry into the United States,” which greatly reduced the number of refugees the U.S. would admit -- including blocking admission of all Syrian refugees -- and suspended entry of nationals from seven Muslim-majority countries for 90 days.  The order was met with immediate protests, international criticism, and legal challenges by those who saw the order as a “Muslim ban.”  A nationwide temporary restraining order was issued in the case Washington v. Trump, and upheld by the Ninth Circuit.  The first order was replaced by a second and then a third order which revised the original list of countries, clarified the effect on green-card holders, and made the 90-day ban permanent.  The Ninth Circuit upheld a lower court decision finding the order unlawful in Hawaii v. Trump; the Supreme Court granted cert in January, and allowed the administration to implement the travel ban while legal challenges were pending.

Refugees Cross U.S. Border into Canada – the number of asylum seekers illegally crossing from the U.S. into Canada spiked to more than 15,000 people last year.  The refugees, many of whom fear Trump’s immigration policies, were met by both opposition by anti-migrant groups and a supportive response by Canada, which granted asylum at increasing rates.

South Sudan – Displacement from South Sudan’s war became the largest refugee crisis in Africa.  More than 2 million people had fled to neighboring countries by the end of the year, with another 2 million displaced inside the country.

Rohingya Refugee Crisis – After a group of militant Rohingya Muslims attacked police bases in northern Myanmar on August 25, the army responded with a brutal show of force, burning villages, killing civilians, and raping women.  Within weeks, over 420,000 Rohingya refugees had fled, leading to a mass exodus “unprecedented in terms of volume and speed,” according to the International Organization for Migration.  Over 700,000 Rohingya have now fled to squalid refugee camps in neighboring Bangladesh.  The U.N.’s human rights commission described the retaliation as ethnic cleansing and possibly genocide.

German and Austrian Elections – Radical right-wing populist parties performed well in both the Austrian and German elections.  The newly elected Chancellor of Austria, Sebastian Kurz, earned his reputation as foreign minister for tightening Austria’s borders during the refugee crisis, when Austria was taking in more asylum-seekers than any EU country except Sweden.  Germany’s chancellor, Angela Merkel has tightened her asylum policy under pressure from the far right and in response to backlash against her initial welcoming stance.  Germany resumed deporting Afghans whose asylum claims were rejected after stopping deportations in May when a bombing near the German embassy in Kabul killed around 150 people.

Manus Island Removal – Hundreds of asylum seekers held for years in an Australian-run detention center on Papua New Guinea’s Manus Island were forcibly removed in November, three weeks after Australia officially closed the camp.  Afraid to leave the camp, the refugees had remained, despite Australia cutting off electricity, food, and water.  Security forces eventually stormed the camp destroying the refugees’ shelters and belongings. 

Climate Change Spurs Migration -- Research published last year suggests that changing weather is spurring people to seek asylum in Europe, and predicts that trend to continue as temperatures are projected to rise.  The research has sparked discussions on the appropriateness of the current definition of “refugee,” which includes people fleeing persecution but not those forced to leave by climate change.

East Congo – Eleven Congolese refugees were killed by Rwandan police responding to a protest over reduced food rations in a Kiziba camp.  Over 17,000 Congolese refugees inhabit the Western Rwanda refugee camp.  Violence in Eastern Congo has worsened recently due to clashes between government soldiers, local militias, and foreign rebels.

Looking ahead, the U.S. Supreme Court is expected to hear arguments on the travel ban this year, and the new Austrian and German governments are likely to further articulate their more restrictive immigration policies.  At the same time, the international community will grapple with how to respond to the world’s ever-increasing number of displaced persons fleeing conflict, ethnic cleansing, and changing climate.

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April 03, 2018

By Alexandra Moffit

Photo: President Clinton Signing NAFTA, Creative Commons License

1. The North American Free Trade Agreement (NAFTA) is a treaty between the United States, Canada, and Mexico that’s been in effect since 1994.

The region is home to over 444 million people. Before NAFTA, the United States and Canada created a free trade agreement in 1989. The three countries started negotiations under the tenure of President George H. W. Bush, and the treaty was completed and signed into law by President Clinton.

2. NAFTA was put in place to encourage economic integration between Canada, the United States, and Mexico.

NAFTA pushes countries to open their markets and eliminate tariffs. Another major goal of the treaty was to create and encourage North American competitiveness in the world. NAFTA was to create an economic zone like the European Union.

Similar to the European Union, an open economic zone would allow each country to specialize. In the United States, one oft-cited example is manufacturing. Since manufacturing is often cheaper in Mexico, some companies have moved production from the United States to Mexico under NAFTA. On the other hand, surplus agriculture such as almonds in the United States could be exported to Mexico or Canada.

3. NAFTA isn’t just an agreement – there are many institutions in place to facilitate it.

NAFTA includes a Free Trade Commission. This commission oversees the work of several working groups, committees, and other entities of NAFTA. There are many working groups in place to encourage investment and trade. These are in place to encourage cooperation in areas such as labor and environmental policies. Important aspects of NAFTA include customs, goods, agriculture, and business. Millions of people in each of the three countries depend on NAFTA every day.

4. President Trump hates NAFTA.

            

President Trump blames NAFTA for the loss of some U.S. jobs to Mexico. He has called the treaty the “worst trade deal in history.”  President Trump also remarked, “I’ve been opposed to NAFTA for a long time, in terms of the fairness of NAFTA.”

As President Trump said, the treaty caused some job loss in the United States’ Rust Belt, specifically in the manufacturing sector. However, millions of other American jobs depend on NAFTA In addition, there is no proven direct causation for any net loss of jobs being because of NAFTA, as job losses depend on many factors. For example, around the same time as NAFTA, China emerged as a manufacturing powerhouse and joined the World Trade Organization. China joining the WTO is one of the many potential factors that resulted in job losses in the United States’ manufacturing sector since 1994.

5. The United States, Canada, and Mexico have been renegotiating NAFTA for several months, and there is no end in sight.

Since President Trump took office, renegotiating NAFTA has been a top priority. The three countries have been negotiating a rewrite of the treaty for the past few months, with four rounds of talks completed so far.

In the most recent meetings, the NAFTA negotiators have decided to extend negotiations into 2018. The three North American powers have not been able to find common ground on several important points. These contentious points include how to rewrite the treaty and whether NAFTA should have to be renewed every five years. The fate of NAFTA is in jeopardy. Many experts believe that the dissolution of NAFTA could jeopardize North American competitiveness, making competing with China and the European Union more difficult. The current American climate of protectionism could hurt the economic growth of all three countries in the short term and long term.

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November 16, 2017

By Alexandra Moffitt

This week, a fourth round of negotiations begin in Ottawa as the United States, Canada, and Mexico meet to renegotiate the North American Free Trade Agreement (NAFTA). NAFTA covers issues of customs, government procurement, and intellectual property rights, among others. Millions of Americans depend on NAFTA every day directly and indirectly. On October 5^th, the Atlantic Council released a report entitled “What if NAFTA ended? The Imperative of a Successful Renegotiations” and held an event on the topic. Following keynote remarks from Representative Will Hurd and the Honorable Bill Zoellick, the drafters of the Atlantic Council report and Mr. Zoellick held a roundtable discussion of the effects of NAFTA and the importance of maintaining the agreement. The atmosphere framing the discussion are President Trump’s anti-NAFTA remarks in recent months.

In his keynote, Congressman Will Hurd, a Member of the U.S. House of Representatives from Texas, said, “sometimes we forget to talk about things we take for granted.” He stressed that NAFTA created North American competitiveness in the world, and that a lot of Americans do not know that Mexican companies create jobs in the U.S. He underscored the importance of keeping NAFTA for the economic benefits.

Former U.S. Trade Representative Bill Zoellick indicated that there were serious risks and huge implications if NAFTA were lost. NAFTA is a continental base for the 21^st century, which connects three democracies and 500 million people. NAFTA allows the three countries to better compete in the global system. Zoellick said, “bilateral trade deficits are negative trade income” to President Trump, which Trump equates to losing.  Zoellick called this “economic nonsense.” NAFTA negotiators are trying to push other countries to open their markets, and remove exemptions, while removing obligations from the organization.    

After Mr. Zoellick’s remarks, the event transformed into a panel discussion of the NAFTA renegotiations with Phil Levi, Daniel Schwanen, and Javier Mancera serving as experts for the United States, Canada, and Mexico respectively. Each of the three drafted sections of “What if NAFTA ended? The Imperative of a Successful Renegotiations.” Phil Levi said there is a lot of uncertainty surrounding NAFTA. After President Trump’s Executive Order on NAFTA, businesses and agriculture came out against it. Mr. Levi cautioned that the most difficult issues in the NAFTA renegotiation have not been discussed yet.

Javier Mancera indicated that Mexico is looking to add new chapters rather than renegotiating previously decided ones. Because Chapters 11 and 19 of NAFTA each provide for a private right of action pursuant to violations, these chapters are immensely important to Mexico. Mr. Mancera mused that it was surprising that American Republicans would want to remove that clause. Daniel Schwanen stressed that Canadians have a consensus that trade helps the country. This feeling of goodwill towards international trade buoys Canada’s stance on NAFTA.

The most captivating moment of the discussion came at the end. Panelists were asked what percentage they gave that President would pull out of NAFTA. The panelists gave their percentages as 50%, 50%, 40%, and more than 50%. These percentages from experts in the field offer a chilling picture for the future of NAFTA. North America’s competitiveness in global trade are at a turning point. Will President Trump jeopardize North America’s status in the world?

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October 14, 2017

By E.J. Thomas*

Photo: Wikimedia Commons/Gnovick. Creative Commons Attribution 3.0 License. 

2016 marked an unprecedented year for steel producers and consumers across the United States.  The domestic steel industry overwhelmingly prevailed in its antidumping (“AD”) and countervailing duty (“CVD”) trade cases with the U.S. Department of Commerce (“Commerce”) imposing large duties on many steel products from all over the world.  However, while this was great news for the domestic steel industry, these actions actually harm American consumers as the prices of many goods increase and thousands of Americans who work in the construction and automotive sectors face job losses because drastic increases in steel prices can harm employment in these downstream industries.  If history is any lesson, more Americans will lose their jobs then are employed by the entire U.S. steel industry. 

2016 was an unprecedented year for trade enforcement in terms of the number of AD and CVD orders that were imposed and also in terms of the sky-high duties that were levied. In 2016 alone, Commerce issued over 30 new AD and CVD duty orders, many of which imposed large dumping and subsidy margins on countries from China to the United Kingdom. These large duties effectively prevent producers in these foreign countries from being able to sell steel in the United States.  To put the number of AD and CVD orders generated in 2016 in context, at the beginning of 2016, there were 332 AD and CVD orders in existence with just under half (149) on steel products.  Thus, Commerce and the International Trade Commission (“Commission”) increased the total number of AD and CVD orders in effect by 10 percent (over 30 AD and CVD orders) in just one year with all 10 percent of the increase targeting steel products. 

This rapid expansion in trade enforcement in 2016 is unlike anything even the most seasoned veterans have experienced during their careers in international trade.  Donald B. Cameron, Partner at Morris, Manning & Martin, LLP, who has represented the Korean steel industry for over 30 years, stated that “the domestic industry filed an unprecedented number of cases on steel products between 2015 and 2016, and thanks to several trade bills they passed through Congress that went into effect in 2016, this made it even easier for Commerce to manufacture and levy high AD and CVD duties on producers that are completely unrelated to any actual dumping or sale of subsidized merchandise actually taking place.” 

Why does any of this matter?  One could argue that there must have been a good reason to protect the domestic steel industry.  Recent news reports have estimated that the U.S. steel industry has lost 48,000 jobs since 2000, with the total number of jobs in the steel industry declining from 135,000 in 2000 to 87,000 in 2015. Although ArcelorMittal, one of the largest U.S. steel companies who is often involved in filing cases with Commerce and the Commission to impose large duties on foreign steel producers, attributes much of this decline in workers to automation and advances in technology, the common narrative in the media is that imports of foreign steel are flooding the market and costing American steelworkers their jobs. 

The problem with this narrative is that not only is it incorrect, but this protectionism of one industry will have adverse effects on American consumers and on Americans employees in downstream industries that turn steel into the products and structures that we all use on a daily basis.  Take, for example, the automotive and construction industries.  These two industries make up the two largest consumers of steel, and a conservative estimate of the number of people employed in these industries is north of 10,000,000 Americans.   

In one of Commerce’s most stunning decisions in 2016, it calculated subsidy margins of over 58 percent for cold-rolled and hot-rolled steel produced by Korean steelmaker POSCO.  A subsidy margin is calculated by taking the total subsidies a producer allegedly received and dividing it by their total sales of the subject merchandise.  The percentage or margin is the amount of countervailing duties importers will have to pay if they want to import that product.  In addition, Commerce also calculated combined 38+ percent dumping and subsidy margins for Hyundai Steel, South Korea’s other major steel producer, in the cold-rolled steel case, a 13+ percent margin in the hot-rolled steel case, and a 47+ percent margin in the investigation of corrosion-resistant steel.

These margins shocked steel trade observers because POSCO and Hyundai Steel had received de minimis margins in CVD investigations and administrative reviews for the past decade and margins ranging from 0 to 3 percent in AD investigations and administrative reviews of flat rolled steel cases during that same period.  When a company receives a de minimis margin in either an AD or CVD investigation, the investigation with respect to that company is terminated, they are not subject to any duties, and they are excluded from any AD or CVD order.  Similarly, when a company receives a de minimis margin during an administrative review, which takes place every year after an AD or CVD order is imposed if the Petitioner or the foreign producer request one, the company is not subject to any duties for that review period.  For more than 10 years, POSCO and Hyundai Steel had not been subject to any subsidy margins as Commerce consistently calculated de minimis margins in any CVD investigations against them.  Further, the AD margins calculated for POSCO and Hyundai Steel during this period were never above 3 percent for flat-rolled steel investigations or reviews. 

However, all of that changed in 2016 when these two major Korean steel producers received some of the highest margins ever levied against a market economy producer of goods.  This decision to place exorbitantly high duties on Korean steel will have a significant impact on American jobs and the U.S. automotive industry.  Both Kia Motors and Hyundai Motors use steel from POSCO and Hyundai Steel.  Collectively, Kia and Hyundai employ 57,000 Americans across the United States.  Kia and Hyundai also indirectly employ thousands of other Americans across the country through their 755 dealerships and 800+ dealerships, respectively. 

This decision by Commerce to impose such high margins for steel products forces downstream steel-consuming companies, like Hyundai and Kia, to either significantly increase the cost of their vehicles to pay these high duties or suddenly find an entirely new source of steel, which will also most likely lead to increases in the cost of their vehicles.  When steel prices increase due to punitive tariffs, American employees of downstream steel-consuming industries suffer.  Higher steel prices lead to the cost of other goods increasing, which then leads to fewer goods being purchased.  This, in turn, leads to layoffs and reduced paychecks for employees in these downstream industries, as American consumers become less likely to purchase these downstream products. 

While no recent study has been conducted to measure job growth or loss after this recent surge of AD and CVD orders, a comprehensive study conducted in 2003 after a wide array of AD and CVD tariffs were imposed found that 200,000 Americans lost their jobs due to higher steel prices.  This is especially shocking given the fact that more Americans lost their jobs in one year because of higher steel prices than were employed by the entire U.S. steel industry. 

Yet, today, the United States again finds itself in a similar predicament.  While the jobs of 87,000 steelworkers are undoubtedly important, Commerce and the Commission have buckled to the political pressure exerted by steel industry executives and protectionist politicians and have started manufacturing AD and CVD margins to protect one shrinking industry at the expense of both American consumers and the millions of Americans who work in downstream industries that consume steel.  Although there are laws and regulations instructing Commerce on how it should calculate margins, the agency maintains significant discretion in applying this methodology, which allows it to make decisions that can significantly impact the margin. 

Further, in 2015, Congress passed new legislation allowing Commerce even more authority to make decisions that significantly increase margins.  Although technically legal, reliance on such techniques to manufacture high margins does not satisfy the intent of these trade laws, which are supposed to allow for the imposition of duties commensurate to any dumping or benefit resulting from subsidies and not to allow for duties to be used as a mechanism to insulate domestic industries from competition from imports.  In some of the most egregious cases, Commerce preliminarily determined that a company either was not selling its goods at less than fair value (i.e., dumping) or did not receive any unlawful subsidies and then reversed course in the final determination to levy duties between 58 and 92 percent. 

What could explain this dramatic change?  Based on the public record from these cases, Commerce was pressured by Congressional representatives, unions, and other interested parties to manufacture margins.  On one such letter from the Secretary of Commerce, Penny Pritzker, in response to a letter from the President of the United Steelworkers Union, Secretary Pritzker included a handwritten note on a form letter saying that “We are using our tools.”  Although it is unclear exactly what Secretary Pritzker meant by this, one thing is clear:  Commerce felt pressured to generate these margins and margins increased exponentially between the preliminary determinations and final determinations.    

Even with a 10 percent increase in the number of AD and CVD orders in one year and massive dumping and subsidy margins levied against a large portion of foreign steel imports, politicians from both sides of the aisle, including President Trump, Senator Rob Portman, and Senator Sherrod Brown continue to push for more investigations on steel, including a Section 201 investigation, under which, if successful, the United States would impose high duties on certain products from all countries.  Section 201 duties could, therefore, prove even more fruitful for protectionists and be used to isolate domestic producers from competition from all imports of specific products. 

Some trade lawyers think a Section 201 investigation is likely, especially in the new Trump Administration.   Mr. Cameron stated, “Given that Trump’s USTR team is filled with lawyers that represent the domestic industry who are constantly arguing for even higher duties to be levied, it is only a matter of time before the Trump administration files a Section 201 petition to block all imports.” 

*E.J. Thomas is a law student at Georgetown University Law Center and an International Trade Law Clerk at Morris, Manning & Martin, LLP.  This Article represents the author’s personal views and does not necessarily represent the official views of Morris, Manning, & Martin, LLP.  

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February 21, 2017