Appeals court reverses China safeguard injunction

Appeals court reverses China safeguard injunction    The U.S. Court of Appeals for the Federal Circuit has reversed an injunction issued by the U.S. Court of International Trade that prohibited the U.S. government from considering petitions to invoke safeguards on textile and apparel imports from China based on threat. The appeals court had stayed the injunction May 28.
   In its decision Tuesday, the appellate panel said the inter-agency Committee for the Implementation of Textile Agreements (CITA) 'can lawfully consider whether to request consultations with China' without 'current market disruption' being 'a prerequisite for action.'
   The appeals court noted further that CITA is not obligated to follow its own prior procedures in setting U.S. textile policy.
   CITA comprises representatives from the U.S. State, Commerce, Treasury and Labor departments, and the office of the U.S. Trade Representative.
   The plaintiff in this case, the U.S. Association of Importers of Textiles and Apparel (USA-ITA), argued that CITA had overstepped its mandate in 'assuming authority over the administration of the textile safeguard provision in China's accession agreement' to the World Trade Organization (WTO), 'even though its mandate only permitted CITA to supervise the implementation of all textile trade agreements.' The appellate panel said that argument 'utterly fails to persuade, if indeed it is not also frivolous.'
   Throughout its decision, the Appeals Court for the Federal Circuit disagreed with conclusions reached by Judge Richard Goldberg of the Court of International Trade, who issued an injunction freezing the safeguards on Dec, 300.
   Noting that USA-ITA had argued that 'CITA's acceptance for consideration of certain petitions was arbitrary and capricious in that it conflicted with its published procedures,' the appellate panel ruled that USA-ITA 'failed to show even a fair chance of success on the merits' of its arguments. Furthermore, 'we hold that the trial court erred in its legal analysis and clearly erred in its fact-finding ' (and) abused its discretion in granting the preliminary injunction.'
   Although the appeals court expressed its disdain for USA-ITA's arguments, it did not dismiss the case, which continues before Goldberg. An eventual decision by the trade court, if it went against the government, would almost certainly be appealed to the Federal Circuit.
   Goldberg's office at the Court of International Trade had no comment on the reversal of his injunction.
   'Tuesday's ruling is a smashing victory for the U.S. government and vindicates the decision by the U.S. textile industry to file safeguard petitions on the basis of threat,' said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition (ANTAC), a group representing U.S. textile and apparel manufacturers.
   'We believe the ruling will make it virtually impossible for USA-ITA to win their case in the lower court,' Tantillo said.
   'That is not our feeling at all,' Brenda Jacobs, USA-ITA's attorney, told Shippers' NewsWire late Tuesday. 'We did not expect the injunction to be sustained by the Federal Circuit. Obviously, we've been given a challenge. As of tonight, we expect to continue our case before Judge Goldberg.' The next step is for the trade court to rule on a plea by the government for USA-ITA's case to be dismissed.
   USA-ITA's board of directors will meet today in New York. On Tuesday, a number of importers of textiles and apparel told Laura Jones, executive director of USA-ITA, that the nearly five months allowed them by Goldberg's injunction to bring in goods from China had been well worth the legal battle, whatever the outcome.
   The appeals court's ruling in the case, 'U.S. Association of Importers of Textiles and Apparel v. United States (05-1209),' may be found at https://fedcir.gov/opinions/05-1209.pdf.