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NEWS RELEASE 01-064; May 10, 2001 May 10, 2001
News Release 01-064
Inv. No. TA-201-67 (Consistency Determination)

ITC SAYS INCREASED IMPORTS OF WHEAT GLUTEN INJURED U.S. INDUSTRY

The U.S. International Trade Commission (ITC) today announced its determination and findings in its investigation No. TA-201-67, Wheat Gluten (Consistency Determination). The ITC announced that, based on the record in its 1998 investigation and after taking into account the December 2000 findings of the WTO Appellate Body and the record of this proceeding, it was making an affirmative determination that increased imports of wheat gluten are a substantial cause of serious injury to the domestic wheat gluten industry, and was making negative findings with respect to imports of wheat gluten from Canada and Mexico under section 311 of the NAFTA Implementation Act.

The ITC made its determination and findings following receipt of a request on April 3, 2001, from the United States Trade Representative (USTR) under section 129(a)(4) of the Uruguay Round Agreements Act. Section 129 sets forth a procedure under which the ITC, at the request of the USTR, might render its action in a safeguard investigation "not inconsistent" with the findings of a WTO panel or the WTO Appellate Body. In December 2000, the WTO Appellate Body found that certain ITC findings in its 1998 determination were not consistent with U.S. obligations under the WTO Safeguards Agreement ("United States -- Definitive Safeguard Measures on Imports of Wheat Gluten from the European Communities").

Chairman Stephen Koplan, Vice Chairman Deanna Tanner Okun, and Commissioners Lynn M. Bragg, Marcia E. Miller, Jennifer A. Hillman, and Dennis M. Devaney joined in the determination and findings. Only Commissioners Bragg and Miller were members of the Commission in 1998 and participated in the original determination and findings.

On March 18, 1998, the Commission transmitted to the President a unanimous affirmative determination and remedy recommendation that wheat gluten was being imported into the United States in such increased quantities as to be a substantial cause of serious injury to the domestic wheat gluten industry. The Commission also made negative findings with respect to imports of wheat gluten from Canada and Mexico. The President subsequently applied a safeguard measure on imports of wheat gluten. The European Union requested review under the World Trade Organization (WTO) Understanding on Rules and Procedures Governing the Settlement of Disputes. A WTO Appellate Body issued its report on December 22, 2000, and found that certain findings of the ITC were not in conformity with U.S. obligations under the WTO Agreement on Safeguards. The USTR requested the determination following receipt from the Commission on March 22, 2001, of an advisory report stating that the Commission had concluded that title II of the Trade Act of 1974 permits it to take steps in connection with its action in the original wheat gluten investigation that would render its action in that proceeding not inconsistent with the findings of the Appellate Body.

The ITC is scheduled to transmit its determination and views in today's action to the USTR by May 17, 2001. A public report concerning the investigation will be available as soon as possible thereafter.

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