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Justice Urges Court to Rule on Safeguards

WASHINGTON — Justice Department lawyers argued Thursday that a federal appeals court should resolve in its entirety a lawsuit filed against the government by importers that had stalled a decision on whether to impose fresh limits on Chinese...

WASHINGTON — Justice Department lawyers argued Thursday that a federal appeals court should resolve in its entirety a lawsuit filed against the government by importers that had stalled a decision on whether to impose fresh limits on Chinese textile and apparel exports to the U.S.

The U.S. Court of Appeals for the Federal Circuit last week lifted a temporary injunction issued by the Court of International Trade in December that had barred the government from reviewing petitions alleging that imports from China were threatening the domestic textile industry.

“The court has the power to resolve the case now,” the Justice Department’s Jeanne Davidson, deputy director of the commercial litigation branch, told the three-judge panel.

Brenda Jacobs, lead counsel for the U.S. Association of Importers of Textiles & Apparel, which sued the government in December, said after oral arguments from both sides that the resolution of the entire case by the appeals judges “would be highly unusual.”

The appeals court’s stay of the injunction allowed the government’s interagency Committee for the Implementation of Textile Agreements to move forward on industry petitions requesting safeguard quotas on 12 categories of goods, including cotton trousers and cotton knits shirts, representing $1.9 billion in Chinese exports to the U.S.

Quotas were lifted among World Trade Organization countries on Jan. 1, but China’s entry into the WTO allowed for safeguard import restrictions to be imposed if a country felt its market was being affected by a surge of exports from the world’s most populous country.

The domestic industry filed the threat-based petitions in the fall in advance of the end of quotas, but USA-ITA sued the government in the international trade court, saying it had not abided by its own policies or the Administrative Procedures Act when it accepted threat-based petitions for review. That case is still pending, as well.

Since then, the government has self-initiated safeguard reviews and the industry has filed additional petitions based on actual market disruption using 2005 import data.

Some of USA-ITA’s arguments Thursday centered on whether the government’s interagency committee had inappropriately changed its stance last year on accepting threat-based petitions. In September, Jim Leonard, deputy assistant secretary of apparel and textiles at Commerce, cast doubt on the viability of threat-based safeguard petitions. However, Grant Aldonas, undersecretary for international trade at Commerce at the time, later clarified the government’s position and said it would consider such petitions.

During the arguments, Davidson said the committee on textile agreements has the right to define its own procedures.

“When you say clarify, I understand the other side could say complete flip-flop,” chief judge Paul R. Michel said.

Michel also pressed the USA-ITA on the issue and asked Jacobs, “What is the authority for saying the procedures published by the committee limit the power of the committee?”

Jacobs said there was precedent for an agency restricting its own authority and that the court has to hold an agency to its own rules. There is no timetable for the appeals court panel to make its ruling.