Two major U.S. producers of plastic retail carrier bags have filed a petition with the U.S. International Trade Commission, accusing companies in Vietnam, Taiwan and Indonesia of dumping bags into the U.S. market.
The petition — filed March 31 by King & Spalding LLP on behalf of Hilex Poly Co. and Superbag Corp. — additionally alleges that the Vietnamese government is providing subsidies to its manufacturers.
“There has been an extraordinary increase in exports from Taiwan, Vietnam and Indonesia in the last three years that have reduced the volumes” of polyethylene bag products sold by U.S. companies, said Joe Dorn, a partner in the law firm's Washington office.
In a phone interview April 14, Dorn said the number of plastic bags exported from those three countries have more than doubled from 6.8 billion in 2006 to 14.6 billion in 2008, increasing the market share of those three countries from a total of 7 percent to 15 percent.
In that same time frame, Dorn said the value of bags exported from the countries has nearly tripled — from $63.5 million in 2006 to $182 million in 2008.
ITC has until May 15 to determine whether imports of products from those three countries are causing material injury or threaten to cause material injury to U.S. producers, and a week after that to report its findings to the Commerce Department. By law, the Commerce Department has until the end of April 2010 to investigate and impose anti-dumping and countervailing duties on bags coming to the U.S. from those countries.
Five years ago, after a similar petition, anti-dumping duties that remain in effect today and range from 20-122 percent were imposed on bag manufacturers in China, Malaysia and Thailand. Those duties are scheduled to be reviewed this year under a sunset provision in the law.
A dumping petition charges that a company sells its product in the U.S. at a lower price than it sells that same product in its own country, or at price lower than its cost of producing that product. A countervailing duty petition alleges that a foreign government is providing financial assistance to benefit the manufacturer, production or exportation of a product.
“We are optimistic we will succeed,” Dorn said. “We have evidence that will show their imports are priced lower” than the selling prices in their own countries, and that the exports of bags from Vietnam, Taiwan and Indonesia have had a “negative impact on the market share, profit margins and production” of U.S. bag manufacturers. “We have evidence of sales lost to unfairly priced imports.”
The petition alleges that dumping margins from Indonesia range from 37-51 percent; Taiwan, 74-100 percent; and Vietnam, 31-75 percent, Dorn said. He said the petitioners were unable to calculate the level of subsidies from the Vietnamese government.
Since the ITC and Commerce Department rulings in 2004, a number of China retail bag manufacturers have moved their packaging operations for plastic bags to Vietnam to circumvent anti-dumping orders from the United States, said Ken Pierce, a partner in the Washington office of Hughes Hubbard and Reed LLP.
According to Commerce Department statistics, Vietnam is the second-largest exporter of plastic retail bags to the U.S., with bag exports valued at nearly $86 million in 2008, compared with just over $19 million in 2006. Import taxes on bags from Vietnam currently are less than 5 percent.