The Employment-Based Immigration Backlog

Summary: Currently in the United States, almost 1 million lawfully present foreign workers and their family members have been approved for, and are waiting to receive, lawful permanent resident (LPR) status (a green card ). This employment-based backlog is projected to double by FY2030. It exists because the number of foreign workers whom U.S. employers sponsor for green cards each year exceeds the annual statutory green card allocation. In addition to this numerical limit, a statutory 7% per-country ceiling prevents the monopolization of employment-based green cards by a few countries.

Summary: For nationals from large migrant-sending countriesâIndia and Chinaâthe numerical limit and per-country ceiling have created inordinately long waits for employment-based green cards. New prospective immigrants entering the backlog (beneficiaries) outnumber available green cards by more than two to one. Many Indian nationals will have to wait decades to receive a green card. The backlog can impose significant hardship on these prospective immigrants, many of whom already reside in the United States. It can also disadvantage U.S. employers, relative to other countries' employers, for attracting highly trained workers.

Summary: Solutions for addressing the employment-based backlog have been introduced in Congress. In July 2019, the House passed H.R. 1044 , the Fairness for High-Skilled Immigrants Act. Currently under consideration by the Senate ( S. 386 , as amended), the bill would eliminate the 7% per-country ceiling. Supporters of the bill argue it would ultimately treat all prospective immigrants more equitably regardless of origin country. Opponents contend it would allow nationals from a few countries, and their U.S. employers, to dominate most employment-based immigration. They argue that S. 386 ignores the fundamental issue of too few employment-based green cards for an economy that has doubled in size since Congress established the current limits in 1990.

Summary: This report describes the results of a CRS analysis that projects the 10-year impact of eliminating the 7% per-country ceiling on the first three employment-based immigration categories: EB1, EB2, and EB3. It models outcomes under current law and under the provisions of S. 386 , as amended. The bill would phase out the per-country ceiling over three years and reserve green cards for certain foreign workers, but it would not increase the current limit of 120,120 green cards for the three employment-based immigration categories.

Summary: The analysis projects similar outcomes for all three employment-based categories: Indian, and to a lesser extent Chinese, nationals in the backlog would experience shorter wait times under S. 386 compared with current law. The bill would eliminate current EB1, EB2, and EB3 backlogs in 3, 17, and 7 years, respectively, with modest differences by country of origin. Subsequently, new prospective immigrants would receive green cards on a first-come, first-served basis with equal wait times within each category, regardless of origin country. By FY2030, EB1, EB2, and EB3 petition holders could expect to wait 7, 37, and 11 years, respectively. Maintaining the 7% per-country ceiling, by contrast would substantially increase the already long wait times for Indian and Chinese nationals, but it would continue to allow those from elsewhere to receive green cards relatively quickly.

Summary: S. 386 would not reduce future backlogs compared to current law. Given current trends, the analysis projects that by FY2030, the EB1 backlog would grow from an estimated 119,732 individuals to an estimated 268,246 individuals; the EB2 backlog would grow from 627,448 to 1,471,360 individuals; and the EB3 backlog, from 168,317 to 456,190 individuals. The total backlog for all three categories would increase from an estimated 915,497 individuals currently to an estimated 2,195,795 individuals by FY2030. These outcomes would occur whether or not S. 386 is enacted, because the bill maintains the current limit on number of green cards issued.

Summary: Some legislative options include one or more of the following: maintaining current law, removing the per-country ceiling, increasing the number of employment-based green cards, and reducing the number of workers entering the employment-based immigration pipeline. Broadly restructuring the entire employment-based immigration system could involve merit-based or place-based approaches.

The United States currently has a population of almost 1 million lawfully present foreign workers and accompanying family members who have been approved for, but have not yet received, a green card or lawful permanent resident (LPR) status. This queue of prospective immigrantsâthe employment-based backlog âis dominated by Indian nationals. It has been growing for decades and is projected to double in less than 10 years.

The employment-based immigrant backlog exists because the annual number of foreign workers whom U.S. employers hire and then sponsor to enter the employment-based immigration pipeline has regularly exceeded the annual statutory allocation of green cards. The Immigration and Nationality Act (INA) that governs U.S. immigration policy limits the total annual number of employment-based green cards to 140,000 individuals. This worldwide limit is split among five employment-based categoriesâthe first three of which each receive 40,040 green cards, and the other two receive 9,940 each. (See Appendix A for more detailed category information.)

Apart from these numerical limits, the INA also imposes a 7% per-country cap or ceiling that applies to each of the five categories. The 7% ceiling is not an allocation to individual countries but an upper limit established to prevent the monopolization of employment-based green cards by a small number of countries. This percentage limit is breached frequently for the countries that send the largest number of prospective employment-based immigrants, due to reallocations from other categories and countries.

For nationals from most immigrant-sending countries, the employment-based backlog does not pose a major obstacle to obtaining a green card. Current wait times to receive a green card for those individuals are relatively short, often under a year. This is particularly the case for nationals from countries that send relatively few employment-based immigrants to the United States.

However, for nationals from India, and to a lesser extent China and the Philippinesâthree countries that send large numbers of foreign workers to the United Statesâthe combination of the numerical limits and the 7% per-country ceiling has created inordinately long waits to receive employment-based green cards and exacerbated the backlog. New prospective immigrants currently entering the backlog (beneficiaries) are double the available number of green cards. Many Indian nationals can expect to wait decades to receive a green card. For some, the waits will exceed their lifetimes.

For these prospective immigrants, many of whom already reside in the United States, the backlog can impose significant hardships. Prospective employment-based immigrants who lack LPR status cannot switch jobs, potentially subjecting them to exploitative work conditions. While waiting in the United States, backlogged workers often develop community ties, purchase homes and have children. Yet with a petition pending approval and no green card, they cannot easily travel overseas to see their families, and their spouses may have difficulty obtaining legal permission to work. Any noncitizen children who reach age 21 before their parents acquire a green card risk aging out of legal status. In effect, a large part of these prospective immigrants' lives and those of their family members are on hold. If a prospective immigrant in the backlog dies while waiting for a green card, the individual's spouse and family lose their place in the queue, and in some cases their legal status to reside in the United States.

For some U.S. employers, the backlog can act as a competitive disadvantage for attracting highly trained workers relative to other countries with more accessible systems for acquiring permanent residence. U.S. universities educate a sizable number of foreign-born graduates in science, technology, engineering, and mathematics, among other fields, many of whom may be desirable candidates to U.S. employers. In the face of the substantial wait times for LPR status, however, growing numbers of such workers are reportedly migrating to countries other than the United States for education, employment, or both.

In recent years, some Members of Congress have proposed solutions for addressing the employment-based backlog, ranging from changing the existing system's numerical limits to restructuring the entire employment-based immigration system. The latter approach is widely viewed as legislatively and politically formidable. On the other hand, legislative proposals to alter the numerical limitsâand to remove the per-country ceiling in particularâfor employment-based immigrants have been introduced more regularly.

One proposal currently under consideration in the Senate following its passage in the House is the Fairness for High-Skilled Immigrants Act ( H.R. 1044 ; S. 386 , as amended), which would eliminate the 7% per-country ceiling for employment-based immigration, among other provisions. Supporters of the bill assert that it would improve the current employment-based immigration system, initially by granting more green cards to Indian nationals who generally have longer wait times under the current system compared with nationals from other countries. Ultimately, the bill would convert the per-country system into what some consider a more equitable first- come, first served system. Supporters of this approach argue that the existing 7% per-country ceiling unfairly discriminates against foreign workers on the basis of their country of origin. They contend that the current backlog incentivizes some employers to hire and exploit Indian foreign workers, knowing that these workers will be unable to leave their jobs for many years without losing their place in the queue.

Those opposed to removing the per-country ceiling maintain that it fulfills its original purpose of preventing a few countries from dominating employment-based immigration. They contend that removing the ceiling merely shuffles the deck by changing who receives employment-based green cards, benefiting Indian and Chinese nationals at the expense of immigrants from all other countries. Because Indian employment-based immigrants are employed largely in the information technology sector, such a change may benefit that sector at the expense of other industrial sectors that are also critical to the United States. Opponents argue that legislative proposals such as S. 386 do not address the more fundamental issue of too few employment-based green cards for an economy that has doubled in size since the law establishing their current statutory limits was passed in 1990.

If the 7% per-country ceiling were eliminated, some observers expect that Indian and Chinese nationals would initially receive most or all employment-based green cards for some years at the expense of nationals from all other countries. Once current backlogs were eliminated, however, country of origin would no longer directly affect the allocation of employment-based green cards, an outcome that some consider more equitable to Indian and Chinese prospective immigrants, and that others consider disadvantageous to prospective immigrants from all other countries.

This report analyzes how removing the per-country ceiling would impact the employment-based immigrant backlog over the next decade, using the provisions of S. 386 , as amended, as a case study. While certain provisions analyzed are specific to only this bill, the broader objective of eliminating the per-country ceiling has appeared in numerous legislative proposals in past Congresses. The report reviews the employment-based immigration system, discusses the key provisions of S. 386 affecting the backlog, and presents results from a Congressional Research Service (CRS) analysis that projects, under current conditions, how the backlog would change over the decade following enactment. The report ends with concluding observations and some potential legislative options.

Overview of the Permanent Employment-Based Immigration System

Each year, the United States grants LPR status to roughly 1 million foreign nationals, which allows them to live and work permanently in this country. The provisions that mandate LPR eligibility criteriaâthe pathways by which foreign nationals may acquire LPR statusâand their annual numerical limits are established in the INA, found in Title 8 of the U.S. Code.

Among those granted LPR status are employment-based immigrants who serve the national interest by providing needed skills to the U.S. labor force. The INA specifies five preference categories of employment-based immigrants:

1. persons of extraordinary ability; 2. professionals with advanced degrees; 3. skilled and unskilled "shortage" workers for in-demand occupations (e.g., nursing); 4. assorted categories of "special immigrants"; and 5. immigrant investors (see Appendix A for more detail).

Each category has specific eligibility criteria, numerical limits, and, in some cases, application processes. The INA allocates 140,000 green cards annually for employment-based LPRs. In FY2018, employment-based LPRs accounted for about 13% of the almost 1.1 million LPRs admitted. The INA further limits each immigrant-sending country to an annual maximum of 7% of all employment-based LPR admissions, known as the 7% per-country ceiling. The ceiling serves as an upper limit for all countries, not a quota set aside for individual countries. As noted earlier, this percentage limit is breached frequently for the highest immigrant-sending countries, due to reallocations from other categories and countries.

The INA also contains provisions that allow countries to exceed the numerical limits set for each preference category and the per-country ceiling. First, unused green cards for each of the preference categories can roll down to be utilized in the next preference category. Second, in any given quarter, if the number of available green cards exceeds the number of applicants, the per-country ceiling does not apply for the remainder of green cards for that quarter. Third, any unused family-based preference immigrant green cards can be used for employment-based green cards in the next fiscal year.

Such provisions regularly permit individuals from certain countries to receive far more employment-based green cards than the limits would imply. For example, the numerical limit for each of the first three employment-based categories is 40,040, which combined with the 7% per-country ceiling, would limit the annual number of green cards issued to Indian nationals to 2,803 per category. However, in FY2019, Indian nationals received 9,008 category 1 (EB1), 2,908 category 2 (EB2), and 5,083 category 3 (EB3) green cards.

Among prospective immigrants, the INA distinguishes between principal prospective immigrants (principal beneficiaries), who meet the qualifications of the employment-based preference category, and derivative prospective immigrants (derivative beneficiaries), who include the principals' spouses and minor children. Derivatives appear on the same petition as principals and are entitled to the same status and order of consideration as long as they are accompanying or following to join principal immigrants. Both principals and derivatives count against the annual numerical limits, and currently less than half of employment-based green cards issued in any given year go to the principals.

While some prospective employment-based immigrants can self-petition, most require U.S. employers to petition on their behalf. How prospective immigrants apply for employment-based LPR status depends on where they reside. If they live abroad, they may apply as new immigrant arrivals. If they reside in the United States, they may apply to adjust st atus from a temporary (nonimmigrant) status (e.g., H-1B skilled temporary worker, F-1 student) to LPR status.

Employment-based immigration involves multiple steps and federal agencies. The Department of Labor (DOL) must initially provide labor certification for most preference category 2 and 3 immigrants. U.S. Citizenship and Immigration Services (USCIS) within the Department of Homeland Security (DHS) processes and adjudicates petitions for employment-based immigrants. USCIS assigns to each principal beneficiary and any derivative beneficiaries a priority date (the earlier of the labor certification or immigrant petition filing date), representing the prospective immigrant's place in the backlog. USCIS sends processed and approved immigrant petitions to the Department of State's (DOS's) National Visa Center , which allocates visa numbers or immigrant slots according to the INA's numerical limits and per-country ceilings. Individuals must wait for their priority date to become current before they can continue the process to receive a green card.

The discussion below of S. 386 , as amended, and the subsequent analysis are focused solely on the first three employment-based immigrant preference categories. These categories account for 120,120 or 86% of the 140,000 total employment-based green cards available annually. The EB4 category, which comprises special immigrants, and the EB5 category, which comprises immigrant investors, are statutorily included within the employment-based immigration system. Those categories, however, represent distinct types of immigrants that fall outside of S. 386 's provisions, as well as much of the debate over the per-country ceiling.

The Fairness for High-Skilled Immigrants Act (currently S. 386 , as amended) has been introduced in Congress in different versions since 2011. In the 116 th Congress, the bill was introduced in the House as H.R. 1044 by Representative Zoe Lofgren in February 2019 and was passed by the House on July 10, 2019, by a vote of 365 to 65. The bill was introduced in the Senate as S. 386 by Senator Mike Lee in February 2019. There have been negotiated proposed amendments since then, and the bill's provisions may change further.

In its current proposed form, S. 386 contains the following provisions found in prior versions of the Fairness for High-Skilled Immigrants Act:

1. Eliminating the per-country ceiling for employment-based immigrants; 2. Raising the per-country ceiling for family-based preference category immigrants from 7% to 15%; and 3. Allowing a three-year transition period for phasing out the employment-based per-country ceiling.

Eliminating the per-country ceiling for employment-based immigrants would convert the current system into a first-come, first-served system, with the earliest approved petitions receiving green cards before those filed subsequently, regardless of country of origin.

S. 386 , as amended, also contains the following additional provisions intended to address issues and concerns raised by stakeholders:

1. A Hold Harmless provision that would ensure no person with a petition approved before enactment would have to wait longer for their visa as the result of the bill's passage; 2. Allocating up to 5.75% of the 40,040 EB2 and EB3 categories (2,302 per category) for derivative and principal immigrants applying from overseas, who otherwise would wait in the backlog much longer once the per-country ceiling was removed, either to reunite with their principal immigrant parents/spouses or to be employed in the United States; and 3. Within the EB3 category, allocating up to 4,400 of the 40,040 slots for Schedule A occupations (professional nurses and physical therapists). It would also allocate slots for these immigrants' accompanying family members.

Analysis of the Employment-Based Backlog

The following analysis projects what the employment-based backlog would look like in 10 years under current law and compares that outcome with the projected outcome if S. 386 were passed. As noted above, the analysis is limited to the EB1, EB2, and EB3 categories, which together account for 120,120 (86%) of the 140,000 employment-based green cards permitted annually under the INA.

The projection of the impact of S. 386 assumes the bill is passed in FY2020, and its provisions take effect in FY2021. As such, the analysis begins with the FY2020 employment-based backlog for the EB1, EB2, and EB3 categories and projects how the bill's provisions alter these backlogs over the 10 years from FY2021 through FY2030. For each category, the analysis estimates the number of new prospective immigrants whose petitions would be approved each year (thereby added to the backlog), as well as the number of backlogged approved petition holders who would receive a green card each year (thereby removed from the backlog). Within each category, the analysis projects the resulting backlog for India, China, the Philippines (for EB3 only), and all other countries or the "rest of the world" (RoW).

Projected annual additions to the employment-based backlog in the analysis are based on FY2018 USCIS data on approved employment-based immigrant petitions. The analysis holds that number constant through the 10-year period examined.

Projected annual reductions to the employment-based backlog are based on green card issuances to approved petitioners and their derivatives. Because S. 386 does not increase the INA's annual worldwide limit of 140,000 green cards issued each year, annual green card issuances in the EB1, EB2, and EB3 categories sum to 40,040 under both scenarios. Projected issuances are based on current DOS data on the number of individuals, by country, who receive EB1, EB2, and EB3 green cards.

Under S. 386 , issuances occur from overseas petitioners (the 5.75% set-aside), Schedule A petitioners (nursing and physical therapy occupations), and the remaining individuals with approved petitions according to their priority date or place in the queue. In the analysis, the Hold Harmless provisions alter issuances for FY2021 only, and the three-year Transition Year provisions impact issuances for FY2022 and FY2023. The 5.75% set-aside expires in nine years (FY2029), and the Schedule A set-aside expires in six years (FY2026). (For more detailed methodology information, see Appendix B .)

As such, the analysis that follows is an arithmetic exercise beginning with the current EB1, EB2, and EB3 approved petition backlogs, each broken out for India, China, the Philippines (only for EB3), and RoW. For each subsequent year, new petition approvals for prospective employment-based immigrants increase the backlog, and green card issuances to those individuals and their family members reduce the backlog. Because the INA treats derivative immigrants and principal immigrants equally for reaching the annual worldwide limit and maintaining the per-country ceiling, the analysis necessarily includes dependent family members of principal immigrants. Each year's ending backlog balance equals the following year's starting balance. The following sections describe the results of the analysis.

Table 1 presents the projected change in the current EB1 backlog after 10 years, as well as current and projected green card wait times. All figures are estimates. Status quo projections are compared to those that model the impact of S. 386 . All figures are estimates.

In both scenarios, total annual EB1 green cards issued and total new beneficiaries entering the EB1 queue are assumed to remain the sameâa conservative assumption (see Figure 1 , below). Since the number of new beneficiaries exceeds the number of green cards issued each year, the total backlog under both scenarios is projected to more than double from 119,732 in FY2020 to 268,246 in FY2030. S. 386 would alter how the backlog grows by country of origin over this period. For Indian nationals, the backlog would increase by only 21% under the bill's provisions, instead of 118% under current law. Chinese nationals would experience a 115% backlog increase, instead of a 215% increase. Nationals from all other countries would bear the impact of these reductions. Their backlog would increase by more than five times over this period, from 21,425 to 125,852.

Projected years to receive a green card for those waiting in the EB1 backlog reflect these shifts. Currently, backlogged EB1 Indian nationals can expect to wait up to eight years before receiving a green card. This also means that the current queue of 73,482 Indian nationals would require eight years to disappear. Under S. 386 , this time would decrease to three years, and the number of years required to eliminate the backlog for Chinese nationals would decrease from five to three years. The backlog for RoW nationals would benefit from the Hold Harmless provisions in S. 386 and thus would disappear after one year under both scenarios. In FY2030, however, RoW nationals would experience projected wait times of seven years for a green card under S. 386 , instead of one year under current law. In contrast, by FY2030, projected wait times for Indian and Chinese nationals would decline from 18 and 15 years, respectively, under current law, to seven years for each group.

Although rates of backlog increase and wait times diverge among country-of-origin groups, the common theme illustrated in Table 1 is the sizeable increase in the number of foreign workers and their dependents, largely residing in the United States, who would wait extended periods to obtain LPR status. Under this projection, the annual number of foreign workers sponsored for EB1 petitions continues to exceed (by an amount fixed at the FY2018 level) the number of statutorily mandated EB1 green cards.

Table 1 shows all EB1 foreign nationals in FY2030 facing the same seven-year wait to receive a green card. This demonstrates how eliminating the per-country ceiling under the provisions of S. 386 would convert the current employment-based system from one constrained by country-of-origin limits into one that functions on a first-come, first-served basis.

Table 2 presents projected changes to the current EB2 backlog after 10 years, as well as current and projected wait times for a green card. All figures are estimates. Projections are conducted for the status quo under current law and for if the current version of S. 386 were enacted. All figures are estimates.

Outcomes for the EB2 petition backlog would diverge considerably from those of the projected EB1 backlog because of the sizable difference between the current EB1 and EB2 backlogs. At 627,448 petitions, the current EB2 backlog is more than five times the size of the EB1 backlog (119,732 petitions) and is dominated overwhelmingly (91%) by Indian nationals. Chinese nationals make up the remaining 9% of the EB2 backlog. No EB2 backlog currently exists for nationals from any other country.

Total annual new beneficiaries entering the EB2 backlog and total EB2 green cards issued each year are the same under both scenarios. Since new entering beneficiaries always exceed green cards issued, the total backlog under either scenario is projected to more than double from 627,448 in FY2020 to 1,471,360 in FY2030. As with EB1 petitions, S. 386 would alter how the backlog grows by country of origin over this period. For Indian nationals, the backlog would increase by a smaller percentageâ77% under the bill's provisions compared with 123% under current law. Chinese nationals, in contrast, would see their backlog increase by a greater percentage under the bill's provisionsâ217% versus 194% under current law. Nationals from all other countries, however, would experience the most notable difference in FY2030. Instead of a relatively small backlog of 30,051 that would disappear after a year under current law, RoW nationals would face a backlog nine times its current size (278,333).

The differential outcomes that S. 386 provides to Indian and Chinese nationals is also seen in the number of years they would have to wait for a green card by FY2030. Table 2 shows that under either scenario, green card wait times would increase for all groups in FY2030 compared to FY2020. Under current law, and owing to a limited number of green card issuances, the current backlog of 568,414 Indian nationals would require an estimated 195 years to disappear. By FY2030, this estimated wait time would more than double. Under S. 386 , the estimated wait time for newly approved EB2 petition holders would shrink to 17 years, and in FY2030, the wait time would be 37 years, the same as for all other foreign nationals.

The significant drop in FY2030 green card wait times for Indian and Chinese nationals under S. 386 would come at the expense of nationals from all other countries. RoW nationals would see their EB2 backlog and wait times increase substantially. Currently, no backlog exists for persons with approved EB2 petitions from RoW countries. Under the current system, EB2 petition approval for anyone from other than India or China generally leads to a green card with no wait time. By removing the per-country ceiling, however, S. 386 would create a new RoW backlog by FY2030 that would be nine times its projected size under current conditions

Table 3 presents projected changes to the current EB3 backlog and green card wait times for both current law and following the potential enactment of S. 386 . All figures are estimates. The EB3 analysis also includes projections for Filipino nationals, who represent relatively large numbers of foreign-trained nurses. As with the EB1 and EB2 categories, Indian nationals dominate the backlog, with 81% (137,161) of the total queue of 168,317 approved petitions. Chinese nationals represent 12% and Filipino nationals the remaining 7%. No backlog currently exists for nationals from all other countries.

The annual number of new beneficiaries entering the EB3 backlog and total EB3 green cards issued are the same each year under both scenarios, increasing almost all backlogs between FY2020 and FY2030. As with EB1 and EB2 petitions, S. 386 would alter how the backlog grows by country of origin over this period. For Indian nationals, the backlog is projected to decline by 8% under the bill's provisions compared with a 79% increase under current law. Chinese nationals, in contrast, would see almost no change in their backlog under the bill's provisions compared to current law. Filipino nationals would see a 25% increase in their relatively small backlog. RoW nationals would experience the most notable difference in FY2030, with the backlog increasing to roughly double the size under S. 386 (251,171) compared to the projected backlog under current law (136,783).

Projected years to receive a green card for those waiting in the EB3 queue reflect these changes in backlog size. Currently, new Indian beneficiaries entering the EB3 backlog can expect to wait 27 years before receiving a green card. Under S. 386 , this wait time would shorten to seven years, and the wait time for Chinese nationals would increase from five to seven years. For Filipino and RoW nationals, FY2020 wait times would not change. By FY2030, however, wait times under S. 386 would equalize the substantial differences in green card wait times under current law, with RoW nationals waiting an estimated 11 years to receive a green card.

This analysis projects the impact of eliminating the 7% per-country ceiling on the first three employment-based immigration categories over a 10-year period. It models outcomes under current law, as well as under the provisions of S. 386 , as amended. The bill would phase out the per-country ceiling over three years and reserve green cards for certain foreign workers, among other provisions. S. 386 would not increase the total number of employment-based green cards, which equals 120,120 for the first three employment-based categories under current law.

The analyses of the EB1, EB2, and EB3 categories all project similar outcomes: Indian nationals, and to a lesser extent Chinese nationals, who are currently in the employment-based backlog would benefit from shorter waiting times under S. 386 compared with current law. The bill would eliminate all current EB1, EB2, and EB3 backlogs in 3, 17, and 7 years, respectively, with some modest differences by country of origin. Once current backlogs are eliminated under the Hold Harmless provision of S. 386 , persons with approved employment-based petitions would receive green cards on a first-come, first-served basis, with equal wait times within each category, regardless of country of origin. In FY2030, foreign nationals with approved EB1, EB2, and EB3 petitions could expect to wait 7, 37, and 11 years, respectively, regardless of country of origin. By contrast, maintaining the 7% per-country ceiling would, over 10 years, substantially increase the long wait times to receive a green card for Indian and Chinese nationals, but it would also continue to allow nationals from all other countries to receive their green cards relatively quickly.

S. 386 would not alter the growth of future backlogs compared to current law. This analysis projects that, by FY2030, the EB1 backlog would grow from an estimated 119,732 individuals to an estimated 268,246 individuals; the EB2 backlog, from 627,448 individuals to 1,471,360 individuals; and the EB3 backlog, from 168,317 individuals to 456,190 individuals. In sum, the total backlog for all three employment-based categories would increase from an estimated 915,497 individuals currently to an estimated 2,195,795 by FY2030. If the current number of new beneficiaries each year continues, these outcomes would occur whether or not S. 386 is enacted, as the bill contains no provisions to change the number of green cards issued.

As noted throughout this report, all figures from this analysis are estimates. They are based largely on the assumption that current immigration flowsâof newly approved employment-based immigrant petitions added to the backlog and of employment-based green card issuances by country of origin re moved from the backlogâremain constant over 10 years. As such, results from the analysis are subject to change, depending on how numbers of future petition approvals and green card issuances deviate from current levels.

In one respect, the analysis yields conservative estimatesâit assumes that the number of new beneficiaries entering the employment-based immigration system will remain at their FY2018 levels. USCIS data for the past decade, however, show a consistent upward trend in the number of approved I-140 employment-based immigrant petitions ( Figure 1 ). Regarding green card issuances, the analysis is not subject to future variation because under current law or the provisions of S. 386 , the number of employment-based green cards issued each year remains fixed by statute. In FY2018, the former exceeded 262,000, while the latter remained at 120,120.

The number of employment-based immigrants who are sponsored by U.S. employers and who enter the immigration pipeline with the aspiration of acquiring U.S. lawful permanent residence far exceeds the number of LPR slots available to them. Removing the 7% per-country ceiling would initially reduce wait times considerably for Indian and Chinese nationals in the years following enactment of S. 386 , but it would do so at the expense of nationals from all other countries, as well as of the enterprises in which the latter are employed. In a decade, wait times would equalize among all nationals within each category, regardless of country of origin. This outcome may appear more equitable to some because prospective immigrants from all countries would have to wait the same period to receive a green card. However, it may appear less equitable to others because it would make backlog-related waiting times apply to nationals from all countries rather than just nationals from a few prominent immigrant-sending countries. S. 386 would not address the imbalance between the number of foreign nationals who enter the employment-based pipeline and the number who emerge with LPR status.

Four options Congress could consider related to the current employment-based immigration backlog include maintaining current law by leaving the 7% per-country cap as is; removing the 7% per-country cap for employment-based immigrants as is proposed under S. 386 ; increasing the number of employment-based LPRs permitted under the current system; or reducing the number of prospective immigrants entering the employment-based pipeline. These options are not necessarily mutually exclusive and could be considered in combination with others. Some Members of Congress have also introduced legislation that would offer more substantial structural changes to the employment-based system.

Maintain C urrent L aw . Supporters of the per-country ceiling cite the current law's original purpose of this provision: to prevent nationals from a few countries from monopolizing the limited number of employment-based green cards. This 7% threshold allows prospective immigrants from other countries to acquire LPR status in a relatively short time, diversifying the skilled pool of workers from which U.S. employers may draw. To the extent that prospective immigrants from high immigrant-sending countries such as India and China concentrate in particular industrial sectors, the per-country ceiling imposes constraints on some industries and allows others to access that worker pool. Because Indian nationals, in particular, have entered the employment-based backlog in relatively large numbers over the past two decades, they experience the most pronounced impact of the per-country ceiling. Some Indian nationals currently wait for decades to receive green cardsâand in the case of new EB2 petition holders, centuries. Some Indian nationals consider this provision of the law discriminatory and unfair.

Remove A nnual P er- C ountry C eiling for E mployment- B ased I mmigrants . Supporters of removing the per-country ceiling emphasize the inordinately long wait times which, as shown above, require Indian nationals who enter the employment-based backlog to wait an estimated 8, 195, and 27 years, respectively, for green cards in the EB1, EB2, and EB3 categories. This analysis estimates that, holding current conditions constant, these wait times could increase to 18, 436, and 48 years, respectively, by FY2030. Long wait times call into question the legitimate functioning of the employment-based pathway to lawful permanent residence when large numbers of current and prospective backlogged workers remain in temporary status most, if not all, of their working lives. Opponents of removing the per-country ceiling maintain that it currently functions as intended. They point to the concentration of Indian and Chinese nationals in the U.S. information technology sector and argue that prospective employment-based immigrants from other countries benefit far more segments of the U.S. economy.

Increase N umber of E mployment- B ased LPR s under C urrent S ystem. The number of green cards for employment-based immigrants could be increased by altering current numerical limits for specific categories or the total worldwide limit. Some have proposed exempting accompanying family members to achieve this goal. Other proposals would increase employment-based immigrants in exchange for reducing the number of other immigrant types, such as family-based preference or diversity immigrants. Such legislation would alleviate current and future employment-based backlogs more expediently than under the current system. Supporters of expanding the number of green cards point out that the current limit of 140,000 for all five employment-based preference categories (120,120 for the first three) was established 30 years ago when the U.S. economy was half its current size. They contend that the larger U.S. economy and the shifting economic importance of technological innovation reinforces the need to find the "best and brightest" workers, including from overseas, who can contribute to U.S. economic growth. Opponents of increasing the number of employment-based green cards point to the lack of evidence indicating labor shortages in technology sectors. They contend that the green card backlog harms U.S. workers by forcing them to compete in some industries with foreign workers who may accept more onerous working conditions and lower wages in exchange for LPR status. Some also argue that current immigration levels are too high. Legislation increasing the number of green cards may face resistance from the Trump Administration and some Members of Congress who oppose increasing immigration levels.

Reduce N umber of P rospective I mmigrants E ntering E mployment- B ased P ipeline . A primary pathway to acquire an employment-based green card is by working in the United States on an H-1B visa for specialty occupation workers, getting sponsored for a green card by a U.S. employer, and then adjusting status when a green card becomes available. When first established in 1990, the H-1B program was limited to 65,000 visas per year. Current limits have since been expanded by excluding H-1B visa renewals and H-1B visa holders employed by nonprofit organizations and institutions of higher education, as well as 20,000 aliens holding a master's or higher degree (from a U.S. institution of higher education). In FY2019, for example, 188,123 individuals received or renewed an H-1B visa, far more than the original 65,000 annual limit. Although some other nonimmigrant visas allow foreign nationals to work in the United States, the INA permits only H-1B and L visa holders to be "intending immigrants" who can then renew their status indefinitely while waiting to adjust to LPR status. Eliminating this "dual intent" classification or otherwise reducing the number of prospective immigrants entering the employment-based backlog would reduce the growth of the backlog and shorten wait times. Arguments against reducing skilled migration emphasize the impacts on economic growth in certain industrial sectors.

Reform S tructure of E mployment- B ased I mmigration S ystem. Some recent legislative proposals have taken broader approaches toward restructuring the employment-based immigration system. The Trump Administration and some Members of Congress have proposed changing the current system from one that relies on employer sponsorship to a merit-based system that would rank and admit potential immigrants based on labor market attributes and expected contributions to the U.S. economy. Other Members of Congress have introduced proposals establishing place-based immigration systems that would let each state determine the number and type of temporary workers it needs. All of these approaches exceed the scope of the more narrow discussion of the numerical and per-country limits addressed in this analysis.

Appendix A. Employment-Based Preference Categories

Within permanent employment-based immigration, the Immigration and Nationality Act (INA) outlines five distinct employment-based preference categories. Each of the five categories is constrained by its own eligibility requirements and numerical limit ( Table A-1 ).

The results presented in this report are based on an arithmetic projection of the employment-based backlog under current law and under the provisions of S. 386 , as amended. Each element of the projection is described below.

Current Backlog Balance . The current backlog balance consists of individuals who possess approved employment-based petitions and who are waiting for a statutorily limited green card. For this analysis, CRS obtained unpublished data from U.S. Citizenship and Immigration Services (USCIS) indicating, for each of the countries within the three employment-based categories analyzed herein, the number of people with approved I-140 petitions. The USCIS data are further broken down by year of priority date, indicating the numerical order in which approved petitions in the backlog are to receive green cards.

New Petition Approvals . To estimate newly approved petitions of prospective employment-based immigrants, the analysis relies on unpublished USCIS figures of EB1, EB2, and EB3 petitions approved in FY2018. The figures are further divided by country, for India and China only. These figures include only principal immigrants and do not account for derivative immigrant family members who accompany or follow to join the principal immigrants and who are included within the same statutory numerical limits. Derivative immigrants are estimated by multiplying the number of principal immigrants by the average derivative-to-principal immigrant ratios ( derivative multipliers ).

Hold Harmless Issuances . As noted above, S. 386 contains a provision ensuring that no one holding an approved petition waits additional time in the backlog as the result of the bill's passage. This provision applies to EB1, EB2, and EB3 categories. To approximate the Hold Harmless provision's impact, this analysis assumes that requirements for this provision would be met with one year's worth of issuances under current law, or current issuances, as recorded by the most recent FY2019 U.S. Department of State (DOS) annual visa report.

Overseas Petitioner Issuances . As noted above, S. 386 contains a provision that would reserve up to 5.75% (2,302) of the 40,040 EB2 and EB3 green cards for foreign nationals petitioning from overseas. Most prospective employment-based immigrants in the backlog already reside in the United States. When notified by DOS that a visa number is available for them, they can apply with USCIS to adjust status from a nonimmigrant status (e.g., possessing an H-1B visa) to LPR status. However, some backlogged prospective immigrants reside abroad in their home countries. Employers seeking to hire these individuals face a competitive disadvantage because they are not already employing them. Individuals based overseas who face long wait times are likely to advance their careers elsewhere rather than wait abroad for years to receive an employment-based green card in the United States. This analysis assumes that green cards reserved under this provision would be used mostly by RoW country nationals who currently face no wait times.

Schedule A Issuances . S. 386 contains a provision that would reserve up to 4,400 green cards for Schedule A occupations (professional nurses and physical therapists). Under the most recent version of the bill, this set-aside would last for six years following enactment. The set-aside includes 4,400 principal immigrants, as well as their family members, effectively doubling the provision's impact. To estimate the number of family members, the analysis assumes that Schedule A principal immigrants brought with them an average of 1.06 derivative immigrants. As such, the total set-aside under this provision is 4,400 principal immigrants plus 4,664 derivative immigrants, for a total set-aside of 9,064 immigrants. Because of the Hold Harmless provisions, Schedule A issuances are projected to start in Year 2 of the analysis (FY2022). Issuances are distributed between nationals from the Philippines, which send the majority of foreign-trained immigrant nurses to the United States, and nationals from all other countries.

Transition Year Issuance s. S. 386 contains provisions that would allow a transition from the current 7% per-country ceiling to its elimination in the first three years following enactment. The transition would affect issuances in the first three years following enactment.

Because all of the issuance provisions described above overlap during the first few years, this analysis gives precedence to the Hold Harmless, Overseas Petition, and Schedule A issuances over the Transition Year issuances. Consequently the 40,040 green cards allocated by S. 386 to the EB1, EB2, and EB3 categories according to Table B-1 are first reduced by the Overseas Petition and Schedule A issuances before being allocated according to the Transition Year provisions. In addition, Year 1 (FY2021) Transition Year issuance limits are preempted by the higher priority Hold Harmless issuances for that year .

Backlog Reduction Methodology . Backlogged employment-based petition holders are issued green cards in the analysis according to the year in which they entered the backlog. Although the issuance limits described above quantify the number of issuances for each country in each of the three employment-based preference categories, the elimination of the current existing backlog is based on how many backlogged petitions can be processed within annual green card limits and on which country's nationals have the oldest petitions.

In FY2018, USCIS approved 22,799 EB1, 66,904 EB2, and 34,964 EB3 petitions, per the November 2019 report cited above. Factoring in family members using the derivative multipliers for each EB category described aboveâ1.48 for EB1, 1.00 for EB2, and 1.06 for EB3âyields an estimated 56,542 new additions to the EB1 backlog, 133,808 new additions to the EB2 backlog, and 72,026 new additions to the EB3 backlog. Given that 40,040 statutorily mandated green cards can reduce these backlogs each year, the net result is an estimated increase in the EB1, EB2, and EB3 backlogs each year by 16,502, 93,768, and 31,986 petitions, respectively (i.e., approved principal immigrant green card petitions, increased by their dependents and reduced by green card issuances).

As a result, the estimated total EB1 backlog at the start of FY2020 of 119,732 ( Table 1 ) increases by a projected 148,518 individuals over nine years (16,502 x 9), resulting in an estimated EB1 backlog at the start of FY2030 of 268,260. The estimated total EB2 backlog at the start of FY2020 of 627,448 ( Table 2 ) increases by a projected 843,912 individuals over nine years (93,768 x 9), resulting in an estimated EB2 backlog at the start of FY2030 of 1,471,360. The estimated total EB3 backlog at the start of FY2020 of 168,317 ( Table 3 ) increases by a projected 287,874 individuals over nine years (31,986 x 9), resulting in an estimated EB3 backlog at the start of FY2030 of 456,191.

These totals are further broken down in the analysis by the provisions of S. 386 that allocate the 40,040 annual green card issuances according to the provisions described above. Those provisions alter the number of green cards that nationals from individual countries would otherwise receive under current law. The overall projected impact on the total backlog remains the same whether or not S. 386 is enacted.


Trade Remedies: Antidumping

Summary: The U.S. Constitution grants to Congress the power to regulate trade with foreign nations and levy tariffs. Since 1922, U.S. law and foreign policy have favored applying tariffs and duties equally to all trading partners. This principle, known as most-favored-nation (MFN) treatment, has been central to the rules-based global trading system since 1947.

Summary: One of the most frequently invoked exceptions to MFN treatment are three "trade remedy" laws. These laws are enforced primarily through administrative investigations of two U.S. government agencies: the International Trade Administration of the Department of Commerce (ITA) and the U.S. International Trade Commission (USITC). Trade remedy laws enable the United States to impose additional duties aimed at specific producers or countries to remedy unfair trade practices and to help domestic industries adjust to sudden surges of fairly traded goods. The three types of laws traditionally classified as "trade remedies" are:

Summary: Antidumping (AD) laws provide relief to domestic industries that have been, or are threatened with, material injury caused by imported goods sold in the U.S. market at prices that are shown to be less than fair market value. The relief provided is an additional import duty placed on the dumped imports based upon calculations made by the ITA. Antidumping orders are the most frequently used and the most controversial trade remedy.

Summary: Countervailing duty (CVD) laws give a similar kind of relief to domestic industries that have been, or are threatened with, material injury caused by imported goods that have been found to have received WTO-inconsistent government subsidies, and can therefore be sold at lower prices than similar goods produced in the United States. The relief provided is an additional import duty placed on the subsidized imports.

Summary: Safeguard (also referred to as escape clause) laws give domestic industries relief from surges of imported goods that are fairly traded if serious injury is found or is threatened to the domestic industry. The most frequently applied safeguard law, Section 201 of the Trade Act of 1974, is designed to give domestic industry the opportunity to adjust to the new competition and remain competitive. The relief provided is generally an additional temporary import duty, a temporary import quota, or a combination of both. Safeguard laws also require presidential action in order for relief to be put into effect.

Summary: Economists have generally seen antidumping laws and policies as economically inefficient. Some, however, have acknowledged the role that these economically inefficient policies have played in making trade liberalization more politically feasible by providing protection for industries that might otherwise oppose such measures. In recent years, U.S. exports have increasingly become a target of AD measures by several major emerging economies, including India and China. Antidumping laws and policies have also been at the center of dozens of trade disputes between the United States and its trading partners in the WTO. Reports issued by the WTO's Appellate Body (AB) on the subject have been one of the primary targets of the U.S. Trade Representative's criticisms of the AB mechanism in the broader WTO dispute settlement system. If Congress wishes to maintain a functional dispute settlement system at the WTO it may consider either directing the President to seek amendments to underlying WTO agreements such that U.S. practices are internationally compliant or direct the ITA to bring its AD policies into conformity with the AB's interpretation of the WTO's Antidumping Agreement.

In general, the rules of the World Trade Organization (WTO), of which the United States is a member, require each member to apply tariffs and duties equally to all other members. This principle, known as unconditional most-favored-nation (MFN) treatment, has been central to the rules-based global trading system since 1947 and part of U.S. law and foreign policy since 1922.

The WTO agreements allow exceptions to this treatment in certain circumstances, including to remedy unfair trade practices and to help domestic industries adjust to sudden surges of fairly traded goods. The three most frequently applied U.S. trade remedy laws permit the imposition of antidumping duties, countervailing duties, and safeguards. These laws are enforced through administrative investigations and actions of two U.S. government agencies: the International Trade Administration of the Department of Commerce (ITA) and the U.S. International Trade Commission (USITC).

The most commonly used of these remedies are antidumping (AD) laws. AD laws provide relief to domestic industries that have been, or are threatened with, material injury caused by imports sold in the U.S. market at prices that are shown to be less than fair value. The relief provided is an additional import duty, calculated by the ITA and placed on the dumped imports. Antidumping orders are the most frequently used and the most controversial trade remedy.

In general, dumping occurs when manufacturers export goods for less than they sell similar goods in their domestic market. The controlling international agreement in the World Trade Organization (WTO) â the Antidumping Agreement (ADA) â defines dumping as the introduction of a product "into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country." U.S. law similarly defines dumping as the "sale or likely sale of goods [in the United States] at less than fair value," with the fair value defined as "the price at which the foreign like product is first sold â¦ for consumption in the exporting country." Simply put, dumping is the sale of goods abroad for less than the price the goods would have commanded in the home market.

Economists have long written about the practice of selling exports for a lower price than in the home market. In 1776, Adam Smith noted the practice by manufacturers to export some of their surplus goods for sale at a loss for the purpose of "[doubling] the price of their goods in the home market." Several years later, Alexander Hamilton expressed concern with the practice and its potential to stymie the development of domestic industry. However, such mentions were sporadic and generally isolated to economic treatises.

As more countries industrialized in the late-nineteenth century, exporting goods for a price below the price that could be commanded in the domestic market (whether at a loss or not) became an economic strategy used to maintain domestic prices while establishing footholds in foreign markets. The expansion of these practices resulted in more sustained scholarly and political attentionânot all negative. In 1880, for example, the U.S. Secretary of State encouraged cotton manufacturers to "sacrifice profits for a time, if necessary, to secure trade-standing in â¦ several markets." Twenty-five years later, the U.S. Department of Commerce and Labor was still dispensing similar advice to manufacturers.

Because of this strategic deployment of dumping, and the reemergence of state-directed trade policies at the turn of the twentieth century, politicians and the public (if not always the economists) began to argue that the practice was unfair. Accusations of using foreign markets as "dumping-grounds" became frequent and the term "dumping" to describe the practice of selling surplus goods abroad at a lower price began to be used more frequently. British industrialists protested dumping from German and French manufacturers, while Canadian millers grumbled about the dumping of American steel. While accusations of dumping were common, the actual prevalence of the practice is hard to calculate, in part because there was no administrative apparatus to investigate such complaints. Nevertheless, experts generally agree that there was, in fact, at least a modest increase in the practice.

There were several possible causes for whatever dumping existed at the time. First, higher tariffs in general encouraged the practice. As a leading scholar of antidumping has argued, "These tariffs provided national firms the opportunity to price monopolistically at home and at the same time protected them from reimports of goods they sold competitively abroad." Other observers have noted that dumping was, in some respects, a natural development of trade in industrially advanced countries as large manufacturers attempted to offset changes in domestic demand by selling large surpluses abroad.

During the first decades of the twentieth century, countries began to take action to prevent dumping or, at least, protect their domestic industries from dumping. In 1904, Canada enacted the world's first modern antidumping (AD) law. By 1921, Australia, New Zealand, South Africa, France, Japan, the United States, and Britain had proposed or enacted AD statutes or other legislation giving administrative officials discretion to alter tariffs in response to influxes of goods at abnormally low prices. Many of the statutes, including the American, were modeled on the Canadian law. The Economic and Financial Section of the League of Nations Secretariat (the precursor to the United Nations) also commissioned studies on the issue to survey AD legislation and see if there was a need for international regulation.

U.S. AD law had precursors in late-nineteenth-century antitrust legislation. Some early observers argued that dumping was a strategy used to injure or hinder development and maintain monopolistic dominance over foreign countries. In 1916, Congress passed the Antidumping Act, which imposed criminal and civil penalties on any person importing and selling articles in the United States "at a price substantially less than the actual market value or wholesale price of such articles" so long as they had the intent of injuring or preventing the establishment of an industry in the United States. The law was rarely applied, in part because it was difficult to prove such an intent.

U.S. antidumping law took its modern form with the passage of the Antidumping Act of 1921, which adopted a more globally common administrative (rather than judicial) procedure that enabled the imposition of additional duties on imports rather than civil or criminal penalties (as the antitrust branch of legislation had).

The Antidumping Act of 1921 became the textual basis for Article VI of the General Agreement on Tariffs and Trade (GATT) in 1947, the multilateral trade agreement that established the post-World War II rules-based trading system and which was later incorporated into the World Trade Organization (WTO) agreements. As such, the U.S. model of antidumping has become the global standard.

Since 1921, Congress has amended and adjusted U.S. antidumping law many times, but has maintained the basic administrative framework and Article VI was clarified and amended by the ADA as part of the establishment of the WTO in 1995.

Present Day Antidumping Laws and Investigations

Statutory authority for AD investigations and remedial actions is found in Subtitle B of Title VII of the Tariff Act of 1930, as amended (codified, as amended, at 19 U.S.C. Â§Â§1673 et seq .). The law requires the imposition of an antidumping duty if (1) the International Trade Administration of the Department of Commerce (ITA) determines that imported merchandise is being, or likely to be, sold in the United States at less than fair value; and (2) the U.S. International Trade Commission (USITC) determines that an industry in the United States is materially injured or is threatened with material injury, or that the establishment of an industry is materially retarded, by reason of imports of that merchandise. The statute requires that the AD duty equal the amount by which the normal value (a calculation of the fair value) of the merchandise exceeds the export price of the merchandise.

The United States is a party to several international agreements that govern the use of AD laws, including Article VI of the General Agreement on Tariffs and Trade (GATT), which was incorporated into the agreements establishing the WTO, and the WTO's Antidumping Agreement (ADA). Both of these agreements were based upon U.S. AD law and practice and the United States was a proponent of both agreements.

All WTO members are subject to the terms of Article VI of the GATT and the Antidumping Agreement. Article VI of GATT allows the imposition of antidumping duties in cases where dumping "causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the establishment of a domestic industry." The ADA elaborates on the basic principles established in Article VI of the GATT by providing more detail on several issues, including how WTO members may determine whether dumping is occurring, how they determine whether there has been an injury to a domestic industry, what kinds of evidence can be used, and other issues. WTO members whose antidumping laws or practices violate the terms of the ADA may be subject to WTO dispute settlement proceedings.

Antidumping Investigations and Measures42

The ITA initiates antidumping investigations either on its own initiative or in response to a petition filed by a representative of a domestic industry with the USITC and the ITA. If the ITA receives a petition, it must normally initiate an investigation within 20 days after it receives a petition and determines that the petition contains the necessary elements for imposing a duty.

The USITC begins the investigation. The central question of its investigation is whether there is a reasonable indication of an injury or likely injury to a domestic industry. If the USITC's preliminary determination is negative or the USITC determines that imports of the subject merchandise are negligible, then proceedings end. In most circumstances, the USITC must make a preliminary determination no later than 45 days after the start of the investigation.

If the USITC's preliminary determination is affirmative, then the ITA begins its preliminary investigation to determine whether dumping exists. The ITA must make its determination within 140 days, or within 190 days at the petitioner's request or if the case is extraordinarily complicated.

If the ITA's preliminary determination is affirmative, then ITA also estimates a weighted-average dumping margin for each exporter or producer individually investigated and an "all-others rate" for all other exporters. The ITA publishes its preliminary results in the Federal Register and orders U.S. Customs and Border Protection (CBP) to delay the final computation of all duties on imports of the targeted merchandise ("suspend liquidation") until the case is resolved and to require the posting of cash deposits, bonds, or other appropriate securities to cover the duties (plus the estimated dumping margin) for each subsequent entry into the U.S. market.

If the ITA's determination is negative, the ITA continues the investigation to the final stage (without ordering a suspension of liquidation) and the USITC continues its investigation as well. Because this is a preliminary determination, agencies may not have obtained all possible evidence, and this allows interested parties a final opportunity to put information and evidence before the two bodies.

Generally, the ITA must make its final determination within 75 days of the preliminary determination. Before issuing a final determination, the ITA must hold a hearing upon request of any party to the proceeding. If the ITA's final determination is negative, the proceedings end, and any suspension of liquidation is terminated, bonds and other securities are released, and deposits are refunded. If the ITA's final determination is affirmative, it orders the suspension of liquidation if it has not already done so. The ITA will publish the order in the Federal Register and direct CBP to continue or resume (if provisional measures expired) suspension of liquidation and collection of cash deposits at the rate determined in the ITA's final determination.

Congress enacted the critical circumstances provision in order "to provide prompt relief to domestic industries suffering from large volumes, or a surge over a short period, of imports and to deter exporters whose merchandise is subject to an investigation from circumventing the intent of the law by increasing their exports to the United States during the period between initiation of an investigation and a preliminary determination by the [ITA]."

If a petitioner alleges that critical circumstances exist in an antidumping case (which would impose additional retroactive AD duties that one would not normally obtain), then the ITA determines whether:

(1)(a) there is a reasonable basis to suspect that there is a history of dumping (combined with material injury due to the imports), or (b) that the importer knew or should have known that the exporter was selling the merchandise at less than fair value, and also knew that there was likely to be material injury due to the sales; and (2) whether massive imports of the merchandise have occurred over a relatively short period.

If the ITA makes an affirmative critical circumstances finding, it extends the suspension of liquidation of any unliquidated entries of merchandise (entries for which estimated AD duties have not been paid) into the United States retroactively to 90 days before the suspension of liquidation was first ordered or the date on which notice of the determination to initiate the investigation is published in the Federal Register, whichever is later.

Whether or not the ITA's initial critical circumstances determination is affirmative, if its final determination on subsidies or dumping is affirmative, the ITA must also include a final determination on critical circumstances. If the final determination on critical circumstances is affirmative, retroactive duties, if not yet ordered, are ordered on unliquidated entries at this time. If the critical circumstances determination is negative, all retroactive suspension of liquidation is terminated, and bonds, securities, or cash deposits related to the retroactive action are released.

If the ITA makes an affirmative determination of critical circumstances, the USITC's final determination must include a finding as to whether the subject imports are likely to undermine seriously the remedial effect of the AD order. If both the USITC and the ITA make affirmative critical circumstances determinations, any AD duty order applies to the goods for which the retroactive suspension of liquidation was ordered. If the final critical circumstances determination of either agency is negative, any retroactive suspension of liquidation is terminated, bonds and securities are released, and any cash deposits are refunded.

Termination of Investigation and Suspension Agreements

The ITA or the USITC may terminate an investigation if the petitioner withdraws the petition or of its own accord if the ITA self-initiated the investigation. Additionally, the ITA may, in certain circumstances, suspend an antidumping investigation in favor of an agreement with foreign exporters (known as "suspension agreements") that either eliminates the sales of less than fair value or the injurious effect. One example of such an agreement is the recent suspension agreement between the various Mexican growers associations and the United States with respect to fresh tomatoes. The United States agreed to suspend its antidumping investigation in exchange for a promise by various Mexican growers associations accounting for substantially all imports of fresh tomatoes from Mexico not to sell fresh tomatoes in the United States at a price less than an established reference price.

Each year, during the anniversary month of the publication of a final AD order, any interested party may request an administrative review of the order. The ITA may also self-initiate a review. During the review process, the ITA recalculates the dumping margin and may adjust the amount of AD duties on the subject merchandise. Suspension agreements are also monitored for compliance and reviewed in a similar fashion. The ITA must make a preliminary determination within 245 days after the last day of the anniversary month of the order or suspension agreement under review, and must make a final determination within 120 days after the publication date of a preliminary determination. New exporters, who were not part of the original review, may also request an expedited review.

An interested party may also request a "changed circumstances" review from the ITA or the USITC at any time. Under current regulations, upon receipt of such a request, the ITA must determine within 45 days whether to conduct the review. If the ITA decides that there is good cause to conduct the review, the results must be issued within 270 days of initiation, or within 45 days of initiation if all interested parties agree to the outcome of the review.

Sunset reviews must be conducted on each AD order no later than once every five years after its publication. In such a review, the ITA determines whether dumping would likely continue or resume if an order were to be revoked or a suspension agreement terminated, and the USITC conducts a similar review to determine whether injury to the domestic industry would be likely to continue or resume. If both determinations are affirmative, the duty or suspension agreement remains in place. If either determination is negative, the order is revoked, or the suspension agreement is terminated.

During the first two decades of the GATT, countries infrequently imposed antidumping measures. Only four partiesâthe United States, the European Union (EU), Canada, and Australiaâmade use of the practice, and even that was infrequent. Scholars have given several non-exclusive explanations for the relative dearth of antidumping measures in this period in both the international and U.S. contexts.

In the international context, ambiguity within Article VI of the GATT may have discouraged GATT members from making use of the antidumping provisions. Specifically, Article VI does not specify a methodology for deciding whether a product is dumped nor does it set out procedures for AD investigations. Additionally, tariff rates among GATT members were still relatively high, which may have dampened the need for industries to petition for protection through antidumping measures.

Likewise, in the United States, the Antidumping Act of 1921 was enacted during a period when tariff rates were relatively high, which may have limited the usefulness of AD duties as a form of protection. Administrative exigencies may have also been a factor. For example, one historian has noted that the Carter Administration shifted responsibility for making the less than fair value determination from the Treasury Department to the Department of Commerce because the "perceived indifference of Treasury to the plight of petitioning firms" may have led to fewer findings of dumping and thus fewer measures.

Finally, countries, particularly those who were not GATT signatories, had higher average tariff rates and were able to impose other non-tariff barriers to trade to reduce importation of allegedly dumped products, which made resorting to AD measures unnecessary. Over the subsequent decades, dozens of developing countries entered the rules-based trading order, which restricted the use of many non-tariff barriers to trade and encouraged the reduction of tariffs. The reduction of tariffs may have led to an increase in the use of AD measures as an alternative form of protection.

The Growth of Antidumping Investigations and Measures

AD investigations and actions were uncommon in the decades following the establishment of the GATT. Before the 1990s, the United States, the European Union, Canada, and Australia were responsible for more than 95% of AD actions. Many developing countries did not even have AD laws and procedures. Beginning in the 1990s, however, the number of countries with AD laws multiplied; approximately half of all AD laws in effect today were implemented after 1990.

With the increase in the number of countries with AD laws, the major users of AD measures have changed dramatically. In 1994, for instance, India had zero AD measures in force. Twenty-five years later, in 2019, India had 275 AD measures in force, ranking second behind the United States. Between 2008 and 2018, India ranked first in terms of the number of AD measures imposed per year, followed by the United States, Brazil, China, and Argentina. Of the top five users of AD measures prior to 1995, only the United States remains in that top five (see Table 2 ). However, if adjusted for per-dollar imports, both the United States and the EU are relatively light users of AD measures.

As more countries have begun to use AD measures, the total number of AD measures in force has increased by more than 600%, jumping from 264 measures in force in 1994 to 1,860 in 2018.

Current Users and Targets of Antidumping Investigations and Measures

Many of the largest users of AD investigations and measures are also among the top targets of AD investigations and measures. China, the United States, and India, are among the top users of AD investigations and measures and are, likewise, the top targets of AD investigations and measures. AD measures are imposed primarily on heavy industrial products from the base-metal and chemical industries. Figure 4 .

The Cause of the Growth in Antidumping Investigations and Measures

The adoption of AD laws and the imposition of measures generally occur following moments of increased market integration and trade liberalization, which may explain their expanded use. In effect, AD measures blunt the impact of new imports. For example, many developing countries reduced their tariffs significantly following the Uruguay Round of trade negotiations, which created the WTO. With significantly lower tariffs and fewer other means available to restrict trade, developing countries (like their developed counterparts before them) may have turned to AD laws and AD measures as a preferred means of protecting select domestic industries during their adjustment to the lower average tariff rate. For example, since their entry into the WTO, India, Brazil, China, and Argentina have collectively reduced their tariffs by an average of 63% from a 17.6% applied weighted mean for all products to 6.5%. In that same time, those four countries increased their use of AD measures dramatically. In 1995, those countries had 13 measures in force. By 2018, they had a total of 646 measures in force, an increase of more than 4,800%. Figure 5 .

As for AD measures being used rather than some other trade remedy, at least one scholar has argued that AD measures are the most attractive alternative legal form of contingent protection. In general, AD measures are easier to impose.

The United States and Antidumping Investigations and Measures

As of February 2020, the United States has 384 AD orders in place affecting imports from 53 countries. The oldest order, which places AD duties on pressure sensitive tape from Italy, has been in place continually since 1977. Seventy-five of the orders have been in place since before the turn of the millennium. The United States is alone among the original four users of AD measures (U.S., EU, Canada, and Australia) in significantly increasing its use of AD measures over the past two decades. The U.S. currently has the highest number of AD measures in force in its history. In comparison, the other three original users have kept the number of measures in force at or below levels reached around the millennium.

The United States as the Target of Antidumping Investigations and Measures

The United States has been a frequent target of AD investigations initiated by other countries. Between 1995 and 2017, the United States was the target of 296 investigations, 181 (61%) of which led to the imposition of AD measures. The largest user of AD measures against the United States is China (37), with India (30), Brazil (24), Mexico (23), and Canada (12) rounding out the rest of the top five. The reasons for the targeting of the United States are uncertain. They may, however, relate to the use of AD measures as a form of protection during a period of trade liberalization or be viewed as retaliation for the United States' heavy use of AD measures against these countries.

Some argue that antidumping measures constitute "the first and best line of defense for the U.S. economy against companies and countries that resort to predatory and mercantilist tactics to make trade gains." Most empirical research, however, has found such predatory pricing is rare.

Furthermore, most academic analysts are highly critical of U.S. AD law and practice. Economic analysts in particular note that AD policy is trade distorting. For example, AD duties deflect trade, by causing exporters to seek out markets where their goods are not subject to AD duties. As one pair of economists noted, the suspension agreement on fresh tomatoes from Mexico caused Mexico to make more tomato paste to ship to the United States and to ship more fresh tomatoes to Canada, which in turn shipped more fresh tomatoes to the United States. Many scholars also conclude that AD duties depress consumer activity by raising costs for consumers and propping up unproductive businesses.

According to one survey, AD policies globally affect somewhere between 3% and 8% of a country's total imports, making them one of the most costly commercial policies. There is also a general consensus that AD duties, when analyzed economically without consideration of their political benefits for encouraging trade liberalization, depress overall trade.

Congress has generally been supportive of AD duties, and reform efforts have been limited despite the generally negative view of the practice held by many economists. Phillip Swagel, the now-director of the Congressional Budget Office and former Assistant Secretary of the Treasury for Economic Policy, recently referred to antidumping as the "third rail of trade policy," arguing that "few politicians of either party [are] willing to point out its broadly negative impact." While many argue that AD laws are economically inefficient if evaluated on their face, some of those critics have conceded "that even if AD is the largest and most frequently used contingent trade remedy (and the most costly single commercial policy), AD may nevertheless be a desirable policy as it serves an important role in promoting overall trade liberalization by acting as a pressure release valve."

As Congress considers its overall goals with respect to trade policy, it might weigh dumping's economic costs against its potential role in supporting trade liberalization. Congress could, for example, encourage (in committee hearings) or direct (through legislation) Commerce to change the de minimis thresholds for finding that dumping has taken place or that the dumped goods have caused an injury. Such changes could reduce or encourage the use of the policy.

Antidumping, Zeroing, and the WTO Appellate Body

During the negotiations over the establishment of the WTO, the United States persistently advocated for the establishment of robust dispute settlement provisions and Congress required the President to ensure that dispute resolution provisions were included in the final agreement. As a result, the agreements establishing the WTO included the Dispute Settlement Understanding (DSU), which provides for an enforceable means by which members can resolve disputes over WTO commitments and obligations.

In recent years, however, several administrations have been critical of the WTO's dispute settlement system in general and with the role of the Appellate Body (AB) in particular. In December, the AB ceased to function as the United States continued to block the appointment of new AB members to replace those whose terms had expired. U.S. AD policies have been at the center of that dispute and Congress might consider reevaluating those policies or renegotiating the agreement underlying the WTO DSU and ADA if it wishes to maintain a functional dispute settlement system at the WTO.

The United States has generally been successful in DSU proceedings with the exception of one areaâtrade remedies. Indeed, trade remedy cases in general make up the largest portion of the WTO's dispute settlement docket, with AD being the most frequently disputed policy. Time and time again dispute settlement (DS) Panels and the AB have found U.S. AD policy to conflict with its international commitments. The United States is not alone. Other WTO members have also been unsuccessful in defending challenges to their implementation of the ADA.

The AD policy that has been at the center of many (although not all) of these disputes is a calculation method referred to as "zeroing." In general, when calculating the dumping margin to determine whether the imposition of antidumping measures on exporters of a product is justified, the ITA will usually average together numerous comparisons between sales in the United States (the export prices) and sales in the home market (the normal value). The ITA will aggregate hundreds or even thousands of individual transactions together in this process. The amount by which the normal value exceeds the export price of a given product is the dumping margin. However, if the export price exceeds the normal value (that is, if the price in the United States is greater than the domestic price) and thus produces a negative result, the United States, in certain circumstances, will adjust the negative values to zero. As an economist at the Department of Justice put it, "The use of 'zeroing' will almost always increase the level of any antidumping duty, and will sometimes create a duty where none would have been imposed, had the methodology not been used."

Consider the following simplified example: the average home market price and export price for a product for the entire month were both $100. As such, the dumping margin and weighted average dumping margin when averaged without zeroing were both zero because the transaction on September 7, for example, was offset by the transaction on September 25. However, when zeroing is applied, the September 25 transaction is set to zero. When this is applied across all values, the aggregate dumping margin is $55 leading to a weighted average dumping margin of 7.85%. One pair of economists determined in 2010 that if the United States were to stop zeroing, "then perhaps as much as half of all U.S. AD measures would be removed and the duties in the other cases would fall significantly."

The U.S. Trade Representative (USTR) asserts that this method allows the United States to "focus on those transactions in which dumping occurs." Under the relevant WTO agreements, the USTR argues, "Members may calculate a margin of dumping on a transaction-by-transaction basis, and, thus, collect duties only on dumped imports, while collecting no duties on non-dumped imports. There is no requirement to offset dumped transactions with transactions in which dumping did not occur." The U.S. Trade Representative has asserted that this is a common-sense method of calculating the extent of dumping that is injuring a domestic industry" and that the elimination of zeroing "artificially reduces the margin of dumping,"

Opponents of zeroing argue that its effect is to artificially increase dumping margins and increase the likelihood that AD measures will be imposed. Specific concerns include that "zeroing makes it extremely difficult for a firm to avoid dumping" because the reasons for price variation, such as seasonality, exchange rates, and variations in shipping costs, are not taken into account. As a result, products subject to greater price variation will be more frequently subject to AD duties. As the United States is the only country to actively zero, it seems unlikely that zeroing is strictly necessary to ensure that AD policy is effective at preventing dumping. One economist estimated in 2008 that "zeroing could add perhaps 3-4 % to the typical U.S. antidumping duty with a cost to the U.S. of around $150 million per year when all existing U.S. antidumping orders were determined by zeroing."

Since 1995, more than 30 Panel and Appellate Body (AB) decisions have found the use of zeroing in specific AD investigations to be inconsistent with the ADA; the AB has held more than a dozen times that zeroing in one form or another cannot be used. In all but two cases involving zeroing, the United States has been the respondent. In two early cases, the EU was the respondent, but it changed its practices after the AB found its implementation of the practice to be inconsistent with the terms of the ADA.

The United States has been a respondent in more than 150 disputes before the WTO. Fifty-six of those involved the ADA and many of those cases involved zeroing. In all the finalized cases, the United States lost or settled. Indeed, CRS analysis has found that nearly half of all cases where the WTO found a U.S. practice to not be in compliance with WTO obligations involved dumping.

Much of the U.S. criticism levied at the WTO's AB over the past decade, some have argued, has been primarily the result of cases involving U.S. implementation of the ADA. In a recent report listing U.S. concerns about the AB, the USTR identified six areas of "Appellate Body errors in interpreting WTO agreements" that it argues have "raised substantive concerns and undermine the WTO." Five of the six concerned trade remedies, including dumping. Indeed, "dump" was the most common trade-related verb in the report. With respect to zeroing, the USTR argues, "The Appellate Body's invention of a prohibition on the use of "zeroing" to determine dumping margins has diminished the ability of WTO members to address dumped imports that cause or threaten injury to a domestic industry."

The WTO AB's approach to trade remedies in general, and antidumping in particular, have been central in USTR's critique of the AB and thus has likely played a significant role in its decision to block appointments to the AB. However, WTO DSB debates are not over. The USTR has approvingly cited a recent DSB decision that upheld the use of zeroing in certain limited circumstances.

As Congress considers the future U.S. relationship with the WTO and the multilateral rules-based trading order, it might address the role that antidumping has played in straining that relationship. For example, Trade Promotion Authority (TPA) expires in 2021. Should Congress decide to reauthorize TPA, it may choose to direct the President to seek revisions to the WTO's DSU of the ADA to address some of these issues. Alternatively, Congress could encourage or direct Commerce to address some of the WTO members' and Appellate Body's concerns. For example, the EU and Canada once employed zeroing in antidumping investigations, but no longer do so.