The U.S. International Trade Commission plans to examine the impact of global competition on the mold-making and tool and die industries.
The House Ways and Means Committee requested Dec. 20 that the ITC conduct a ``fact-finding investigation of the current competitive conditions,'' looking at both U.S. and global markets. The ITC report will take about 10 months.
It is the most substantial U.S. government action on the issue to date, and comes after months of sometimes bitter complaints from those industries about what they see as unfair import competition, particularly from Asia.
But the degree to which the industry's troubles result from unfair foreign competition or just market conditions like the dollar exchange rate is debated hotly by companies and trade groups in the mold-making and tool and die industries. The ITC review may or may not lead to government action.
ITC's investigation was announced Dec. 21 by Rep. Phil English, R-Pa., who had urged Ways and Means Chairman Bill Thomas, R-Calif., to use the committee's statutory powers and order the ITC to investigate.
``Local tool and die companies suspect that foreign producers, especially China, are flooding the U.S. market with cheap products,'' English said in a statement. ``The problem is, we don't have a good idea of the volume of tool and die imports or conditions contributing to this unfair competition.''
A Plastics News review of mold-making data for 2000 found that China accounted for only about 2 percent of U.S. injection tooling imports, compared with 60 percent for Canada. However, China was the fastest-growing competitor, with imports surging 38 percent a year between 1997 and 2000.
Matt Coffey, president of the National Tooling and Machining Association in Fort Washington, Md., said he is pleased ITC will be investigating.
There are many factors hurting the industry, he said, and government statistics will indicate that the exchange rate is the biggest problem, he said.
``The government statistics basically say the problem is currency, but the government statistics lag,'' Coffey said.
His members have relayed some anecdotes that would suggest unfair trade, but he also noted that he has not seen evidence of ``a huge, government-sponsored attack on the mold industry.''
He said that sometimes a mold project may move overseas to follow product manufacturing, which may not be unfair foreign competition: ``Is that a problem with China or with the customer?''
Olav Bradley, head of the American Mold Builders Association, could not be reached.
English said most industries pay for their own investigations when they believe another country is trading unfairly. But he said that would have proved too difficult for the tool and die industry because it is made up of small manufacturers with limited resources. Such investigations typically cost millions of dollars, he said.
Thomas' letter said the ITC review should examine the past five years, and cover these areas:
* Profile the U.S. tool, die and industrial mold industry.
* Examine changes in marketing and manufacturing, and trends in U.S. consumption.
* Assess foreign markets, including China, Taiwan, Japan, Canada, Mexico and the European Union.
* Compare strengths and weaknesses of U.S. and foreign producers.
* Determine the principal challenges and implications for the near-term.