US firms accuse three Asian nations of dumping plastic bags

03 April 2009 19:35  [Source: ICIS news]

WASHINGTON (ICIS news)--Two major US plastic bag producers have accused competitors in Vietnam, Indonesia and Taiwan of dumping product in the US and are seeking compensatory duties against those imports, their lawyer said on Friday.

Superbag of Houston, Texas, and Hilex Poly of Hartsville, South Carolina, also are seeking US countervailing duties against Vietnam, charging that the Hanoi government is providing subsidies to its domestic bag makers in violation of World Trade Organization (WTO) rules.

Joseph Dorn, an attorney with the Washington, DC, office of King & Spalding, filed the antidumping and countervailing petitions on behalf of the two companies with the US International Trade Commission (ITC).

The petitions allege that polyethylene (PE) retail carry bags from Indonesia are being dumped in the US market at prices as much as 51% below fair value and that bags from Vietnam and Taiwan are being dumped at prices fully 75% and 100% below fair value respectively.

Both companies claim losses because of the dumping, but the dollar value of those losses is confidential, Dorn said.

Under US law, the complaint petition filed by the two firms will first be reviewed by the US Commerce Department to determine if dumping is actually taking place.

If the department does establish that plastic bags from those three countries are being dumped in the US market, the ITC will then have to determine whether the dumping is causing or will likely cause material harm to Hilex and Superbag.

If that harm is established, the Commerce Department’s Customs Office will assign tariffs against bag imports from the three nations, usually as a percentage of the imports’ custom value.

Separately, the US could assign a countervailing or punitive duty to plastic bag imports from Vietnam to offset the value of subsidies that the Hanoi government allegedly is providing.

Dorn said that the countervailing petition against Vietnam is the first such action in recent history. Previously, the US has not allowed countervailing duty petitions against those countries that the Commerce Department regards as having non-market economies.

However, he said that his firm recently won a countervailing claim against paper imports from China, also considered a non-market economy under US policy. That 2006 win against China has opened the door to countervailing claims against other non-market economies, he said.

“This is the first such countervailing duty petition against Vietnam,” Dorn said, adding that the amount of compensatory duty to be sought will be determined when the exact amount of the Hanoi subsidy is established.

“When Vietnam joined the WTO, it agreed to be bound by the WTO’s anti-subsidy rules,” Dorn said. Vietnam was granted WTO membership in January 2007.

Rulings on the two petitions should be completed within 13 months, he said. 

If antidumping or countervailing duties are assigned, they could be maintained for up to five years before being subject to review. Duties paid by bag producers in the three countries would be distributed evenly to the two US firms that filed the petitions.

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By: Joe Kamalick
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