Try to peel back the layers of the plastic bag industry's complaints about unfair trade, and one factor pops up repeatedly: the Internet.
Isaac Bazbaz, a director of Superbag Corp. in Houston, said an Internet auction by retailer Target Corp. in 2001 made it clear what kind of challenges the U.S. industry faced, and ultimately led the firm to ask the government to block ``unfairly'' priced imports.
To listen to Bazbaz and others, the auction for Target's 1.8 billion-bag-per-year business opened up the field to overseas competitors like never before and put the squeeze on prices.
The Internet is not the only reason, but U.S. extruders said the change has been dramatic: Imported grocery and retail bags from China, Malaysia and Thailand have flooded the U.S. market and doubled their market share, to 30 percent, between 2000 and 2002.
Bazbaz is part of a coalition of U.S. plastic bag makers asking the government to put tariffs on the imports from those three countries to counteract what they call dumping. If they don't get relief from the government, they said, much of the U.S. industry could go out of business.
``The Target Internet auction was a sea change,'' said Joseph Dorn, a Washington lawyer representing the U.S. companies.
But importers and some others said blaming overseas competitors is too simple. They agree Internet auctions have made big changes, but really just opened up the market directly to foreign suppliers and cut out the middleman, including U.S. bag makers that also have imported foreign-made bags. Plus, cheaper Asian resin has hurt the U.S. industry, they said.
Minneapolis-based Target said the Internet auction ``leveled the playing field'' for its overseas suppliers, and said what really hurt its U.S. suppliers are their own quality problems.
Printing on overseas bags often is better, and those bags more consistently are the right thickness and length, said Jim Johnson, Target's procurement sourcing group leader.
U.S. suppliers have made other gaffes, he said: Target once was sent bags with Wal-Mart's name. In another incident, some improperly made Target bags that should have been destroyed by the bag maker, instead found their way to flea markets.
``Target has moved business away from domestic manufacturers in recent years, but the major reason for that has been the inability of U.S. manufacturers to provide the consistent quality we require,'' Johnson said. ``I believe in general the increased presence of imported merchandise bags in the U.S. has been fueled by the consistent high quality of imported bags, not by price.''
Johnson testified at a fact-finding hearing July 11 before the U.S. International Trade Commission in Washington, which is investigating U.S. extruders' complaints.
While Target clearly sides with those opposed to import restrictions, Johnson's testimony shows some of the complex issues the U.S. government must weigh.
For example, importers of bags said the Chinese industry uses older, smaller machines that are more labor-intensive. That makes them more flexible for changing orders and takes advantage of China's lower wages, said Robert Guido, president of importer PSC Packaging Corp. in Burr Ridge, Ill.
U.S. bag makers said their equipment is the leading edge of technology in bag making. For them, it's a capital-intensive process in which they must run their machines around-the-clock to stay in business, shutting down production only three or four days a year.
Vanguard Plastics Inc. in Farmers Branch, Texas, invested $65 million in new equipment between 1997 and 2001, and became one of the world's largest bag manufacturers, managing partner William Seanor told the trade commission.
But since then imports have forced it to shut its Compton, Calif., plant and the firm has been able to invest only $3 million a year in new equipment, Seanor said.
Sonoco told the commission that it, too, closed a California plant last year because of surging imports, and petitioners cited other plants that have shut down, like Orange Plastics' facility in Crittenden, Ky.
Overall employment in the plastic bag sector fell from 2,400 to 1,800 between 2000 and 2002, and the domestic industry claims to have lost $300 million in sales since 2000.
``The worst is about to come,'' Dorn said. ``If antidumping duties are not imposed, this industry will not survive.''
ITC officials said they plan to announce a preliminary decision Aug. 4.