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13 Law & Pol'y Int'l Bus. 617 (1981)
Relief from Imports from Communist Countries: The Trials and Tribulations of Section 406

handle is hein.journals/geojintl13 and id is 627 raw text is: RELIEF FROM IMPORTS FROM
COMMUNIST COUNTRIES:
THE TRIALS AND TRIBULATIONS
OF SECTION 406
INTRODUCTION
Section 406 of the Trade Act of 19741 was enacted by the U.S.
Congress in the wake of recently opened trade with the People's
Republic of China (P.R.C.) and at the zenith of detente with the
Soviet Union. In contrast to the general escape clause remedy pro-
vided in section 2012 of the Trade Act, section 406 establishes an
import relief procedure to meet the unique circumstances of market
disruption3 caused by imports from communist countries.4 Section
406 reflects congressional concern over the perceived ability of a
communist country, through its nonmarket economy, to ignore
true costs, marshall resources, and direct the flow of imports so as
1. 19 U.S.C. S 2436 (1976 & Supp. III 1979).
2. 19 U.S. C. S 2251 (1976 & Supp. III 1979); see SENATE FINANCE COMM., REPORT ON
THE TRADE REFORM ACT OF 1974, S. Rep. No. 1298, 93rd Cong., 2d Sess. 119, reprinted in
[1974] U.S. CODE CONG. & AD. NEWS 7186, 7263 [hereinafter cited as SENATE REPORT].
3. See 19 U.S.C. S 2437(e)(2).
4. Section 201 was enacted to provide temporary relief to an industry suffering serious in-
jury as a result of excessive imports. SENATE REPORT, supra note 2, at 111, reprinted in [1974]
U.S. CODE CONG. & AD. NEWS at 7263; see Administrative Survey: October 1977 to September
1978 11 LAW & POL'Y INT'L Bus. 1, 10-12 (1976) [hereinafter cited as Administrative Survey].
Under section 201, the ITC aggregates the impact 'of imports from every exporting country
of the product under consideration to determine the extent of injury. See 19 U.S.C. §
2251(b) (1976 & Supp. III 1979); Administrative Survey, supra, at 19. In addition, trade restric-
tions imposed by the President under section 201 must be applied on a most-favored-nation
basis to all exporters of the product. GATT Doc. No. L/76 (1953); Easton, Administration of
Import Trade Statutes: Possibilities for Harmonizing the Investigative Techniques and Standards of the
International Trade Commission, 19 GA. J. INT'L & COMP. L. 65, 66-67 (1980). In contrast,
Congress enacted section 406 to provide a prompt and effective remedy against those par-
ticular communist countries that disrupt the domestic market by flooding it with imports.
SENATE REPORT, supra note 2, at 211, reprinted in [1974] U.S. CODE CONG. & AD. NEWS at
7343. Accordingly, restrictions imposed pursuant to section 406 are limited to those coun-
tries under investigation as a significant cause of market disruption. 19 U.S.C. § 2436(b)
(1976 & Supp. III 1979). In essence, section 201 remedies are directed against the country
causing market disruption. Administrative Survey, supra, at 19, n. 145 (emphasis in original).

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