Plastic bags made by Malaysia's Euro Plastics Sdn Bhd that were imported into the U.S. between August 2007 and July 2008 will be subject to anti-dumping duties of 43 percent, according to a preliminary decision by the U.S. Department of Commerce.
In addition, future U.S. imports of Euro Plastics' bags will be subject to cash anti-dumping duty deposit requirements of 43 percent, the agency announced July 9.
The ruling is part of the Commerce Department's annual administrative review of a 2004 anti-dumping order on imports of plastic grocery and shopping bags from Malaysia, China and Thailand. The agency postponed its preliminary rulings on whether to continue existing anti-dumping duties on imports from China and Thailand until July 22 and Aug. 3, respectively. Final results for those two countries are expected early next year.
If the Commerce Department maintains its ruling on Euro Plastics when a final determination is made in November for Malaysia importers of plastic bags manufactured by that firm will receive a bill from the U.S. Customs and Border Protection for duties amounting to 43 percent of the value of those imports, plus interest, said Joseph Dorn, partner in the Washington law office of King & Spalding LLP.
Euro Plastics, based in Shah Alam, is part of Euro Packaging plc of Birmingham, England. Euro Plastics exports bags from Malaysia to the U.S. primarily through Euro Packaging LLC, its affiliated reseller in Salem, N.H.
It's a pretty big preliminary ruling because the cash deposit rate has been zero for that company, Dorn said in a telephone interview. According to Dorn, Euro Plastics did not export bags to the U.S. in 2006, but ramped up exports to the U.S. market after the Commerce Department eliminated its anti-dumping cash deposit rate in August 2007.
The domestic industry applauds the Commerce Department's preliminary ruling, which, if upheld in the final results, will prevent Euro Plastics from abusing its zero cash deposit rate and expanding its U.S. market share through unfair pricing, said Dorn, whose firm represents a coalition of domestic producers that brought the anti-dumping petition in 2003.
A zero deposit rate does not mean that plastic bags can be imported free of anti-dumping duties. Plastic bag exports into the U.S. are subject to Commerce Department review.
The original petition resulted in anti-dumping duties ranging from 20-122 percent on bag manufacturers in China, Malaysia and Thailand.
Acting on a similar petition filed in March, the U.S. International Trade Commission ruled May 14 that there is reason to believe that plastic grocery and shopping bags from Indonesia, Taiwan and Vietnam are being sold in the United States at prices anywhere from 28-96 percent below their fair value.
The Commerce Department estimated the dumping margins at 76-96 percent for bags imported from Taiwan, 35-60 percent for bags from Indonesia, and 28-76 percent for bags from Vietnam.
The department also is investigating two policy lending programs, three grant programs, three income-tax programs, and three import and value-added-tax exemption programs from the Vietnamese government, to determine whether to impose countervailing duties against Vietnam.
A preliminary ruling on the anti-dumping and countervailing duties is due Sept. 7, with a final ruling due sometime between December and April.
The number of plastic shopping bags exported from those three countries has more than doubled from 6.8 billion in 2006 to 14.6 billion in 2008, increasing the combined market share of those three countries from 7 percent to 15 percent, Dorn said. In that same time frame, he said, the value of bags exported from those three countries has nearly tripled from $63.5 million in 2006 to $182 million in 2008.
A dumping petition charges a company with selling 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 making the 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 ITC and Commerce Department rulings in 2004, a number of China retail-bag manufacturers have moved packaging operations for those products to Vietnam. Commerce statistics now put Vietnam as the second-largest exporter of plastic retail bags to the U.S., and valued those exports at nearly $86 million in 2008, compared with roughly $19 million in 2006. Import taxes on bags from Vietnam are currently less than 5 percent.