William Seanor, a partner in bag maker Vanguard Plastics Inc. in Farmers Branch, Texas, is part of a group of U.S. manufacturers who persuaded the government back in January to put temporary tariffs on Chinese bag manufacturers.
He thinks it's working - he testified before a government panel that those import duties are a big reason retail giant Target Corp. is pulling back from buying bags in China, giving his firm, the sole domestic supplier to Target, a chance to reclaim contracts lost to imports.
That's probably the strongest example to emerge publicly that U.S. bag makers may be achieving some of their goals as they push for more permanent government relief from imported polyethylene retail shopping bags. The U.S. companies claim they have lost $300 million to underpriced imports from China, Malaysia and Thailand.
But importers, Asia-based suppliers and one large U.S.-based manufacturer with a factory in Thailand are fighting back. They say they don't dump underpriced bags in the United States, and that other factors, like much cheaper resin in Asia, have tended to give Asian bag makers an advantage.
The government review is close to wrapping up. The U.S. International Trade Commission heard testimony from both sides June 10, and is shooting for a July 23 final decision.
Also on June 10, the Department of Commerce published its final figures for the punitive tariffs, in most cases hewing to figures it came out with in January. Under the U.S. government's two-track system, the tariffs become final only if the ITC decides that the U.S. industry has been harmed or faces threat of harm.
ITC ruled preliminarily in August that the U.S. industry faced threat of harm and weakening financial prospects. But, in comments noted by importers, the agency declined to say that the U.S. industry had been significantly harmed to date.
The importers argued at the June 10 hearing that Asian imports surged in part because of cheaper Asian resin. Now that advantage is disappearing, they contend, because as oil prices have risen in the last year, so has the price of Asian resin. Now prices are more in line with North America, where plastics are made more from natural gas, importers said.
One Hong Kong-based firm said its resin costs have gone up at least 50 percent in the last year, and a U.S. company with a factory in Thailand, Advance Polybag Inc. in Metairie, La., said resin costs and higher shipping charges have raised the cost of its Thai factory 50 percent in the last year.
``The competitive advantage that Asian producers once had has gone away,'' said Frank Cannon Jr., president of importer PDI Saneck in Westerville, Ohio.
Both sides agree imports have risen, although precise figures for shopping bags are not available.
Government figures show imports of PE plastic bags from China jumped from $132 million in 2001 to $183 million in 2003, but those figures include bags not covered by the investigation. Thai imports rose from $17 million to $43 million, while Malaysian imports actually dropped, from $9 million to just under $7 million.
ITC's preliminary report found that while the retail shopping bag market has grown since 2001, most of that went to imports.
U.S. manufacturers, including Vanguard, said the import surge has caused them to close plants and lay off employees.
``If anti-dumping duties are not imposed, our company will continue to contract in a growing market and, eventually, we will be forced out of business,'' Seanor said.
The testimony painted a complex picture of the industry, with witnesses on both sides testifying that Internet auctions have pushed down costs by giving Asian suppliers easier access to U.S. retailers. Several of the U.S. firms seeking tariffs acknowledged that they also import bags to hold down costs, and one, Ampac Packaging LLC in Cincinnati, has a plant in China.
ITC also will have to decide an important side issue: Importers are pushing to exclude more expensive bags used by higher-end retail stores, while the U.S. industry wants those included.
This is not the only legal action the domestic industry has taken: Another petitioner, Superbag Corp. of Houston, recently won injunctions against several Asian firms and importers in a patent case it filed with ITC.