The U.S. International Trade Commission has rejected an attempt by PET resin makers to place countervailing or antidumping duties on PET imports from India, Indonesia and Thailand.
ITC turned down the request April 18 by a 5-1 vote. In a news release, members of Washington-based ITC said they determined that the U.S. PET market ``is not materially injured or threatened'' by imports from those countries.
The decision comes less than a year after President Bush denied a similar request to remove duty-free status given to PET from those nations.
Both requests were sponsored by the U.S. PET Resin Producers Coalition, whose members include Eastman Chemical Co.'s Voridian division, Wellman Inc., DAK Americas Inc. and Nan Ya Plastics Corp. USA.
The PET Users Coalition - which 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-product companies as Nestle USA, Ocean Spray Cranberries Inc., PepsiCo Inc., Procter & Gamble Co. and Welch's - opposed both requests.
PET makers argued that 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. PET imported from duty-free countries accounted for about 6 percent of total U.S. PET consumption in 2003, with India, Indonesia and Thailand making up about 80 percent of that amount.
Preliminary countervailing duties were placed on PET from the three countries in 2004, resulting in a 45 percent drop in overall Asian PET imports into the United States - from almost 600 million pounds to 330 million pounds.
The fact that 2004 industry data showed that both selling prices and profitability were up for U.S. PET makers may have ``clouded the issue,'' said Chase Willett, a PET analyst with Chemical Market Associates Inc. consulting firm in Houston.
Results from the public PET makers Eastman and Wellman were looking more positive, Willett said, ``so the ITC may have looked at that and said the industry was doing OK.''
Mark Adlam, commercial vice president for PET maker M&G Group of Houston, described 2004 as ``a weird year'' that probably ``threw the ITC off the trail and made them not see things as they typically are.''
Adlam added the ITC ruling is likely to increase PET imports to the United States.
Analyst Edgar Acosta of DeWitt & Co. in Houston said ITC's ruling is ``not that surprising'' in light of the failure of the earlier request.
``Dumping was never a threat in the first place,'' he said. ``How can it be a threat when the material accounts for less than 6 percent of the market, and the companies opposing it control the other 90 percent? It's like saying RC Cola is leading the price for colas.''
``None of the historical damage tests applied here,'' added Drew Davis, federal affairs vice president for the American Beverage Association, a member of the users' coalition. ``The U.S. PET industry was hardly acting like an industry under duress and shrinking due to foreign pressure.''
Davis and Adlam said they did not know whether the group would appeal the ruling.