In a unanimous vote, the U.S. International Trade Commission has ruled there is reason to believe plastic grocery and shopping bags from Indonesia, Taiwan and Vietnam are being sold in the U.S. at prices 28-96 percent below fair value.
The May 14 ruling that U.S. plastic bag producers are being harmed by dumped and subsidized imports was in response to a petition filed six weeks ago by bag manufacturers Hilex Poly Co. LLC and Superbag Corp. The petition alleged that those three countries are dumping bags into the U.S. market and that the Vietnamese government is providing subsidies to its manufacturers.
The Commerce Department estimated the dumping margins at 76-96 percent for bags imported from Taiwain, 35-60 percent for bags imported from Indonesia, and 28-76 percent for bags imported from Vietnam.
Two policy lending programs, three grant programs, three income tax programs, and three import and value-added tax exemption programs from the Viet- namese government will be investigated as well. It is the first countervailing duty investigation against Vietnam.
If these dumping margins and subsidies are substantiated, Commerce can impose anti-dumping and countervailing duties in those amounts on importers. The preliminary determination for the countervailing duty measures against Vietnam is due June 24, while the preliminary determination for the dumping charges against the three countries is due Sept. 7, according to the ITC Web site.
Final rulings could come as early as December or as late as next April.
“This important decision sends a strong message to foreign producers and importers of these products that unfair pricing and government subsidies will not be tolerated, but, rather, will be thoroughly examined by the U.S. government,” said Isaac Bazbaz, a director of Houston-based Superbag, in a prepared statement.
Mark Daniels, vice president of marketing and environmental affairs at Hilex Poly, which is based in Hartsville, S.C., said there is a need to level the playing field for all 15 U.S. plastic bag producers. “Surging imports at extraordinarily low prices have had a significant adverse impact on our facilities and our employees,” he said.
The number of plastic shopping bags exported from the three countries has more than doubled, from 6.8 billion in 2006 to 14.6 billion in 2008, increasing their combined market share from 7 percent to 15 percent, said Joseph Dorn, a partner in the Washington office of King & Spalding LLP. The law firm filed the petition on behalf of the bag manufacturers.
In that same time frame, Dorn said, the value of bags exported from those countries has nearly tripled — from $63.5 million in 2006 to $182 million in 2008.
Five years ago, after a similar petition, anti-dumping duties ranging 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 production, manufacturer or exportation of a product.
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.
According to Commerce statistics, Vietnam now 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 are currently less than 5 percent.