May 14, 2004 The PBN Company


Washington, DC – The Consuming Industries Trade Action Coalition (CITAC) expressed its deep concern today regarding an attempt by the Department of Commerce (DOC) to change its established practice on the way it evaluates companies in countries designated as non-market economies (NMEs) that are accused of dumping products into the U.S. marketplace. The proposed change could lead to dramatically higher duties to be put in place in the shrimp, and other cases now under investigation, and in future trade cases.

In an anti-dumping investigation, the DOC determines if a product is being sold in the U.S. at prices below market rates in the country of origin. The percentage below the market rate at which companies allegedly dump their products is the margin of dumping. The greater the dumping margins found, the higher the duties ultimately imposed on a company's shipments to the U.S. market.

Under the current system, companies in NME countries are assumed to be controlled by the state – and thus subject to extremely high potential duties – unless they can prove they are not under government control. Both large and small companies in these countries now have the opportunity to demonstrate that they function independently of government control and therefore qualify for a separate lower rate. But under a proposed change in practice, the DOC may no longer offer these companies, called "Section A respondents," the chance to prove their independence and receive the lower separate rate. They would instead be subject to the high "country-wide" rate.

"We are displeased that the DOC is considering an abdication of its responsibility to judge fairly the independence of producers and exporters in NME countries. The DOC appears to be sending a message that it prefers higher dumping margins over fairness and objectivity," said Jon Jenson, CITAC President. "It is American consuming industries and American consumers – such as in the furniture and shrimp case – who ultimately pay the price of this bad idea from the DOC, because they pay the dumping taxes through higher market prices."

"While these companies can appeal the margins and obtain a refund, the process for doing so takes years to complete," continued Jenson. "It is blatantly unfair to subject companies that operate independently of government control to prohibitive dumping duties. DOC should maintain the very reasonable practice of providing separate rates for independent companies."

In the wooden bedroom furniture case, hundreds of Chinese companies have requested to be treated as Section A respondents. In the shrimp case, more than 50 Chinese companies requested such treatment, as did nearly 40 companies in Vietnam.

"Additionally, U.S. companies seeking protection from imports would be handed an enormous gift with this change, even as the DOC conducts its investigations into the imported shrimp and imported Chinese wooden bedroom furniture cases," continued Jenson. "We often hear about 'leveling the playing field' from those who promote more and more dumping cases. But what credibility does our government have when we try to change the rules in the middle of the game? So many companies abroad are willing to play by the rules and prove they are trading fairly and are independent of government control, why isn't this recognized?"

The Commerce Department set a June 1 deadline for receiving comments on the proposed change in practice.

CITAC is a coalition of companies and organizations committed to promoting a trade arena where U.S. consuming industries and their workers have access to global markets for imports that enhance the international competitiveness of American firms.





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