"But to a trade expert’s ear, it makes no sense to say that Portman failed to stop illegal Chinese dumping. It’s like saying LeBron James failed to score any touchdowns last season — that's the wrong sport."
April 1, 2016
Ted Strickland goes back 11 years in an ad targeting incumbent Ohio Sen. Rob Portman, chastising his role as U.S. trade representative under President George W. Bush.
"It was his job to stop China’s illegal dumping of steel," the narrator says. "He failed, looked the other way, did nothing."
Titled "Beltway Rob," the ad is part of an ongoing name-calling battle between the Strickland and Portman campaigns. (Portman mocks Strickland as "Retread Ted.")
Strickland’s ad left us wondering if Portman dropped the ball on foreign steel during his year as trade representative. ("Dumping" in trade speak typically refers to a country introducing a cheaper-than-normal product into a foreign market and edging out domestic manufacturers.)
Was it really his job to stop China’s illegal steel dumping, and did Portman really do nothing to stand up for the United States?
Strickland’s campaign pointed us to a 2012 Politico article about potential running mates for Mitt Romney’s presidential bid. Portman’s name was on the short list, the article said, but a chapter in Portman’s trade history could be leveraged as a weakness by Democratic opponents.
We turned to the trade wonks for more clarity.
Role of trade representative
So was it Portman’s job to "stop China's illegal dumping of steel?"
In a word, no.
"Like a lot of political ads, it’s more complicated than the ad is saying," said Warren Maruyama, who served as general counsel for the Office of the U.S. Trade Representative under Portman’s successor, Susan Schwab.
The trade representative’s job is to act as the government’s spokesperson on trade, negotiate trade agreements, file cases with the World Trade Organization on behalf of domestic interests and defend against cases where those interests are challenged, and to oversee coordination with the alphabet soup of other agencies whose interests overlap with trade, Maruyama said.
Trade law is arcane, and it’s easier to yell "China bad!" than it is to explain its nuances. But to a trade expert’s ear, it makes no sense to say that Portman failed to stop illegal Chinese dumping. It’s like saying LeBron James failed to score any touchdowns last season — that's the wrong sport.
Likewise, the law is very clear that the U.S. trade representative has no role in the determinations on unfair trade practices such as dumping.
Determinations regarding dumping are made by the Commerce Department and the U.S. International Trade Court, in procedures which are deliberately shielded from political or outside interference. "It’s walled off from political considerations, and Portman could have gotten into trouble if he’d tried to interfere," Maruyama said.
If dumping is proven, it’s an unfair trade practice for which relief is mandatory. The U.S. International Trade Commission decides if there is injury or the threat of injury, and the Commerce Department determines the appropriate relief, through higher tariffs.
Alan Wolff, who was deputy special representative for trade negotiations during President Jimmy Carter’s administration, agreed. "Portman had no role on anti-dumping," he said. "That’s flat-out wrong."
The attack ad copy is conflating two different issues, Wolff said. The case referenced by Politico, the one that the Strickland ad wants to use as proof of Portman’s inaction on Chinese dumping, didn’t involve market-dumping at all.
The case at hand is different
In August 2005, American makers of circular welded non-alloy steel pipe, which is often used in home-building, filed for relief from "market disruption" under Section 421 of the Trade Act of 1974.
Market disruption is not the same as dumping. Trade experts draw a firm distinction between the two terms. (When the Wall Street Journal mischaracterized a similar 2009 market disruption case as a dumping case, the paper ran a correction.)
"There is a clear difference," Maruyama said. "The thing about ‘dumping’ is it sounds bad, so people throw it around, but it’s just not accurate."
Section 421 is "a unique and rarely used statute," according to Schwab, who took over for Portman after Bush tapped him to head the U.S. Office of Management and Budget.
Cases under this statute for market disruption fall under a category of "safeguard" considerations, where it is not necessary for the petitioner to prove wrongdoing, only that a trade action has caused them "injury, or threat of injury." It’s "a way of bypassing a formal dumping hearing by the trade commission," Schwab said.
Section 421 cases are also unique in that they require approval from the White House. The president, the law says, must determine whether trade relief measures are in the country’s economic interest, "or could threaten national security."
In October 2005, the International Trade Commission issued its determination on the steel pipe case. Four of six trade commissioners sided with the steel pipe manufacturers and recommended tariffs and safeguard actions be imposed on China’s pipe imports. Two commissioners dissented, finding no market disruption.
Here, it was Portman’s job to coordinate the process where representatives from other agencies weigh in.
"They all sit down and argue," Maruyama said, "and if they have a consensus, that’s the recommendation that goes up to the president. If there are differences, and often there are, it goes over to the White House in a memo summarizing all the pros and cons. And then Bush gets to decide."
Portman had a Cabinet role in this occasion, but Schwab said Bush was very clear that there was only one "decider" in his administration.
"It wasn’t a Portman-Bush decision," she said. "It was a Bush decision."
Bush did not impose relief in this case, or in three other 421 cases that crossed his desk when Portman wasn’t his trade representative. In the steel pipe case, Bush said that relief wasn’t in the national economic interest. He believed that punishing China on steel pipe wouldn’t ultimately help U.S. steel manufacturers.
"There are many other countries currently supplying standard pipe to the U.S. market that could fill the void created by curtailed Chinese imports," wrote Portman in a February 2006 letter to Sen. Blanche Lincoln, D-Ark., one of many lawmakers catching heat from angry steel industry constituents.
Schwab called attacks on Portman’s record on China "ironic."
"Portman was always my strongest ally when I wanted to take the Chinese to the WTO," she said. "He was a hawk on these issues. If I wanted to file trade enforcement cases on China I could always count on him."
Strickland’s ad says that it was Portman’s "job to stop China’s illegal dumping of steel. He failed, looked the other way, did nothing."
We consulted trade experts on both sides of the partisan aisle. They were unanimous that the ad’s statement is fundamentally wrong. Portman did not have a role to play in anti-dumping measures as U.S. trade representative. The 2005 trade matter that the ad attacks him over had nothing to do with dumping. This case only reached Portman, and ultimately Bush, because it was filed under another part of trade law that triggers presidential involvement that isn't used for true "dumping" cases.
And if you switched "Bush" for "Portman" in this ad, it would still be a cynical twisting of words. "Dumping" is not a catch-all for Chinese steel in the market.
We rate this claim False.