In a unanimous vote, the U.S. International Trade Commission decided not to place anti-dumping duties on PET resin imported into the U.S. from five foreign countries.
The 5-0 vote Oct. 18 covers PET imported from Brazil, Indonesia, Korea, Pakistan and Taiwan. The commission determined that the U.S. PET industry “is not materially injured or threatened with material injury” because of imports from those countries, according to a news release.
The decision was made even though the U.S. Department of Commerce had determined that PET resins from those countries are sold in the U.S. at less than fair value.
“As a result of the USITC's negative determinations, no anti-dumping duty orders will be issued” on PET imports from those five countries, officials said in the release. Their full report on the decision will be released on Nov. 21.
U.S. PET makers DAK Americas LLC, Indorama Ventures USA Inc., M&G Polymers USA LLC and Nan Ya Plastics Corp. America requested the duties in September 2017 in response to surging volumes of “aggressively priced” PET resin imports from those locations, the companies said in a news release at the time.
Import volume from those countries grew more than four times from 2014 to 2016, climbing from 148 million pounds to almost 600 million pounds. According to the Commerce Department, imports from those countries accounted for about 42 percent of all U.S. PET imports in 2017.
In an Oct. 22 news release, the U.S. PET makers that requested the duties “expressed strong disappointment in the determination” and said that they are considering an appeal of the ITC decision.
“The ITC's vote does not reflect the experience of the U.S. PET resin industry over the past three years,” attorney Paul Rosenthal, of Kelley Drye & Warren LLP said. “On the contrary, the record in this case showed that U.S. producers suffered declining production, sales and profitability as a result of surging imports from Brazil, Indonesia, Korea, Pakistan and Taiwan.
“In fact, the Commerce Department found significant dumping margins by PET resin producers in each country,” he added.
“That dumping hurt the sales and profits of the domestic industry, contributing to one U.S. producer [M&G] going out of business last year. The domestic industry is also under threat of continued injury due to the significant idle capacity and export orientation of the foreign PET resin producers,” he said.
Market analyst Phil Karig with Mathelin Bay Associates in St. Louis said in an email that by focusing on the concepts of a material threat or material harm to U.S. PET producers, the ITC commissioners “are signaling that it isn't enough to show that foreign producers are selling at unfairly low prices in order to obtain relief from the government.”
“While this logic somewhat contradicts the generally aggressive stance the White House has taken on trade matters, it remains to be seen whether the Commission's full report clarifies its PET decision as a one-time event or as the start of a new trend,” he added.
Once the ITC's final determination is published in the Federal Register and the ITC issues its written opinion, the domestic producers will make a final decision on whether to appeal the ITC's determination with the U.S. Court of International Trade in New York, officials said.
The domestic industry's appeal must be filed within 30 days of publication of the ITC's determination, according to the release. The timing for an initial decision from the Court of International Trade may be anywhere from six months to approximately one year, depending on a number of factors.
The decision from the Court of International Trade may then be appealed by any party to the U.S. Court of Appeals. A successful appeal by the domestic industry would send the injury decision back to the ITC for re-examination, and could ultimately result in an affirmative vote, industry officials said.
A revised affirmative injury vote by the ITC would impose cash deposit requirements on U.S. importers of PET resin from Brazil, Indonesia, Korea, Pakistan and Taiwan.
The September 2017 duties request wasn't the first time U.S. PET maker have taken such action. In March 2016, the trade commission voted to place anti-dumping duties on PET resin from Canada, China, India and Oman. That request had been made by DAK, M&G and Nan Ya.