Commentary: US duties decision harms both sides ( 2004-01-12 14:43) (China Daily by Dai Zi)
Chinese furniture manufacturers and US retailers have joined forces to
condemn the US International Trade Commission's preliminary approval of duties
of more than US$1 billion of wooden bedroom furniture from China, seen as a bid
to garner support from the US manufacturing sector ahead of this year's
presidential elections.
The commission claimed on Friday there was a reasonable indication that
low-priced imports from China were harming domestic furniture makers.
A group of 27 US companies want duties ranging from 158 per cent to 441 per
cent to offset what they allege is dumping by 135 Chinese competitors.
The commission's 6-0 vote paves the way for the Commerce Department to set
preliminary anti-dumping duties on April 28.
The commission will then hold a final hearing in middle of the year and issue
a final injury determination in the autumn.
But local furniture makers said the US manufacturing industry will not get
any benefit from the dumping charges.
"Even if the high duty was imposed, no jobs would be created for the US
industry," said Liu Shande, a manager from Guangdong-based Jixiang Wood Products
Co.
Orders would shift from China to other countries like Malaysia, the
Philippines and Viet Nam, he added.
However, Liu believed many Chinese jobs would be lost because of the unfair
decision.
Although declining to offer the company's prices for exports, Liu said the
exported furnitures make more profits than those sold domestically.
"We are not dumping. We export because the products can sell at higher prices
than at home," he said.
The average profit of exports could be as much as 30 per cent according to
industrial sources.
However, the US authorities refused to admit the Chinese costs because they
still view China, a WTO member, as a non-market economy.
But, at least, the Chinese Ministry of Commerce said the furniture industry
should be granted market economy treatment.
Most of the exporters are private companies that have not been subsidized by
the government.
Theses companies have formed a special committee to deal with the case.
Another coalition was formed by US furniture retailers to challenge the
petition by US manufacturers following the commission preliminary ruling.
The Furniture Retailers of America (FRA) coalition, participated by over 60
retail companies throughout the United States, is to fight the ill-conceived and
damaging petition filed with the commission, the FRA statement said.
"This is one of the most cynical trade cases brought before the ITC in recent
memory," said William Silverman, FRA Counsel and an attorney with Hunton &
Williams.
According to Silverman, the US manufacturers helped create the Chinese
bedroom furniture industry years ago to obtain access to low-cost, high quality
furniture that it then resold directly to US retailers.
Some of the petitioners have imported wooden bedroom furniture from China for
years and profited by reselling these Chinese imports to major retailers, he
said.
"Once retailers went to China directly, thereby eliminating petitioners'
profits as middlemen, the group of domestic producers responded by filing this
dumping case with the ITC," he said.
