- Published on Wednesday, 29 April 2009 16:52
US - Two major US plastic shopping bag manufacturers have accused companies in Vietnam, Indonesia and Taiwan of dumping in the US market.
A petition has been filed by King & Spalding LLP on behalf of Hilex Poly Co of Hartsville, South Carolina and Superbag Corporation of Houston, Texas with the US International Trade Commission (ITC) complaining of dumping of polyethylene shopping bags by Vietnam, Indonesia and Taiwan.
Speaking on behalf of his clients, Joe Dorn, a partner in King & Spalding, said that the number of plastic bags exported from the three countries have more than doubled since 2006.
“There has been an extraordinary increase in exports from Taiwan, Vietnam and Indonesia in the last three years,” Dorn said, which have reduced the volumes of polyethylene bag products sold by US companies.
According to Dorn, the number of plastic bags exported from the three countries have more than from 6.8 billion in 2006 to 14.6 billion in 2008, increasing the market share of the countries from 7% to 15%.
In that same period, Dorn said that the value of bags explored from Vietnam, Indonesia and Taiwan has almost tripled to US$182 million in 2008, from 2006’s US$63.5 million.
The petition alleges that dumping margins from Indonesia range from 37% to 51%, Taiwan from 74% to 100%, and Vietnam’s margins are from 31% to 75% - as the US deems Vietnam a non-market economy, the petitioners have nominated India to calculate the dumping margin.
The petition also alleges that the Vietnamese government is providing subsidies to its plastic shopping bag manufacturers even though, said Dorn, his clients have been unable to calculate the level of subsidies distributed by the government.
The ITC has launched a preliminary investigation into the dumping as alleged by the petition filed on 31 March 2009 on whether there was a violation of the law under the Tariff Act of 1930.
Under that Act, a foreign producer that sells a product in the US at a price that is below that producer's sales price in its home market, or at a price that is lower than its cost of manufacturer is dumping goods. Subsidizing occurs when a foreign government provides financial assistance to benefit the production, manufacture, or exportation of a good.
If the Department of Commerce (DOC) finds that a US industry producing a like product is materially injured or threatened with material injury, an anti-dumping duty order or countervailing duty order would be imposed on these PE bags to offset the dumping or subsidies. An exclusion order that directs Customs to stop infringing imports from entering the US may also be included in some cases.
ITC expects to reach a preliminary determination into anti-dumping and countervailing duties by 15 May 2009, and its final decision in January 2010.
DOC approach Indonesia for help with investigation
Indonesia’s Trade Ministry announced earlier this week that the US DOC has asked the government to investigate 13 local companies for allegations of dumping plastic shopping bags in the US.
Indonesia’s International Trade Cooperation Security Director Ernawati told local newspaper Jakarta Globe, “The Trade Ministry received the investigation proposal on April 20,” and said that the ministry has already met with the 13 companies to hear their explanations.
“The commerce department has sent questionnaires to be filled out by the companies and we have asked them to be cooperative to keep a good relationship with the United States,” she explained.
The 13 companies are CV Dwi Jaya Indah Plastik, Hi-V Plastics Bags Manufacturing, Dharma Kritadam, Panca Budi Pratama, Unggal, Randugarut Plastic Indonesia, Glopak Packaging, Dunia Primad Damai, Rapindo Plastama, Pura Jaya Eratama, Sido Bangun Plastic Industry, Super Exim Sari and Super Makmur. They are all small to medium-sized enterprises.
“It will be hard for them to defend themselves in the United States because they will have to use [US] lawyers who clearly understand US trade law,” Ernawati noted, adding that the companies were working out how to pay for US legal help.
Between 2005 to 2008 Indonesia faced a total of 153 dumping cases.
“Completely unreasonable” : Vietnam government
Vietnam has strongly denounced the dumping allegations, with the country’s Deputy Minister of Industry and Trade Le Danh Vinh calling the claims “completely unreasonable”, reported local news source Vietnam News Agency.
Vinh stressed that Vietnam has been fully carrying out its duties and commitments to the World Trade Organisation (WTO) and observing WTO rules, including those on subsidies.
Should the US Department of Commerce (DOC) continue with the dumping investigation, Vinh said his ministry would make every effort to protect the legitimate interests of Vietnamese companies, in line with international trade standards and WTO rules.
He also noted that the petitioners’s complaints are contrary to the US policy not to impose countervailing duties on non-market economies, since the US does not acknowledge that Vietnam has a market economy.
Vinh added that the DOC has duties to ensure equality and fairness for Vietnamese businesses in trade disputes, said Vinh.
Figures from the DOC show that US$19.2 million worth of plastic shopping bags were imported from Vietnam in 2006. This increased to US$71.8 million the following year and US$85.8 million in 2008.
In June 2006, US anti-dumping tariffs ranging from 0.2% to 77.3% were imposed on plastic bags from China, 0.91% to 101.7% from Malaysia, and 0.62% to 122.8% from Thailand after the three countries were accused of dumping.
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