PET makers in the United States have turned up the heat on foreign resin imports by filing an anti-dumping petition and a countervailing duty request with the U.S. International Trade Commission.
In the March 24 petition, the U.S. PET Resin Producers Coalition asks the government to determine if PET makers in India, Indonesia, Thailand and Taiwan are selling resin in the United States at prices below their production costs, thereby creating an unfair trade advantage.
The anti-dumping move could result in fines against those countries, while the countervailing duty request could impose duties to offset subsidies that PET makers in India and Thailand receive from their respective governments, said Michael Hertzberg, a Washington lawyer representing the producers' coalition.
The requests are on top of a petition the coalition filed in June with the U.S. Trade Representative to have PET removed from the Commerce Department's Generalized System of Preferences list.
The GSP list extends duty-free status for thousands of products to about 120 countries in need of economic development. Dozens of plastic products, including most commodity resins, are on the list, which dates back to 1975. If PET were removed from the GSP list, a duty amounting to about 3 cents per pound would be collected on imported PET beginning in July.
The producers' coalition comprises Eastman Chemical Co.'s Voridian division, Wellman Inc., M&G Polymers USA LLC, DAK Americas Inc. and Nan Ya Plastics Corp. USA.
But PET makers are not going unopposed in their effort. The PET Users Coalition was formed earlier this year to maintian GSP status for PET. That group consists of large PET processors such as Constar International Inc., Graham Packaging Co. LP and Owens-Illinois Inc., as well as such well-known consumer products companies as Nestle USA, Ocean Spray Cranberries Inc., PepsiCo Inc., Procter & Gamble Co. and Welch's. Several prominent trade groups also are members, including the National Soft Drink Association and the Grocery Manufacturers Association.
Drew Davis, NSDA vice president of federal affairs, and Dan Mullock, Constar vice president of purchasing, testified March 31 on behalf of the coalition to the ITC. Mullock said placing a barrier on imports from developing countries would put those countries at a competitive disadvantage, adding costs for U.S. PET users.
``This would be unwise in a time when both U.S. and foreign [PET] producers are raising prices because of energy costs and other factors,'' Mullock said.
In a recent interview, Davis said the amount of PET coming into the United States is only 8 percent of overall consumption.
``At that small level, it's hard to think that [foreign material] is responsible for damage to the U.S. industry,'' he said.
Davis also pointed out that U.S. PET makers do a considerable amount of exporting themselves and have attempted to raise per-pound selling prices by 12 cents since Jan. 1.
``If the industry is in such dire straits that it can't compete, how is it trying to raise prices 12 cents in less than six months?'' he said. ``That's hardly a signal that this is a distressed industry.''
The GSP petition filed by PET makers ``looks like justification to raise domestic prices if [U.S. PET makers] can get away with it,'' said Davis, who added that the anti-dumping petition could result in significant fines.
Both sides had until April 15 to file final briefs on the GSP topic. The government is to reach its decision by the end of June.
On anti-dumping, the ITC has begun an investigation that's expected to last 45 days, according to Hertzberg.
``We've asked the government to see if there's reasonable injury or threat,'' he said.