China prices rising?
If successful, petition could lead to increases by spring
By Powell Slaughter -- Furniture Today, August 18, 2003
Greensboro, N.C. — If successful, the proposed antidumping petition targeting wood bedroom furniture from China could lead to preliminary duties as early as next spring.
That could affect the pricing of goods exhibited at the October furniture market if those products arrive in the United States after the duties are imposed.
Much depends on a preliminary decision on the petition from the International Trade Commission, a U.S. federal agency. If the American Furniture Manufacturers Committee for Legal Trade files its petition in the fall, the ITC should make a preliminary judgment in December.
"If the ITC sees a reasonable indication of injury (to domestic producers), the case goes back to (the U.S. Department of) Commerce," said Joe Dorn, an attorney with the Washington law firm King & Spalding who is representing the Committee for Legal Trade. "If that (ITC) decision is negative, the case is over."
Industry analyst Jerry Epperson of Mann, Armistead & Epperson doubts the antidumping petition will have much effect on buying at the October market.
"Even if the petition impacts pricing next spring, there are enough alternatives that I don't think any buyers will change where they order furniture at market, though some exhibitors might use it as an excuse for a bad market," he said. "Will buyers hedge themselves, look at some places they haven't before? Sure they will."
While the case will rest on whether imports have damaged domestic manufacturers, the International Trade Commission investigation also will involve input from other industry parties, said George Deyman, one of three supervising investigators at the ITC.
"The commission's focus is what the effect of the imports is on domestic producers, but we gather extensive data from the major purchasers of the product, which in this case is probably retailers and distributors," Deyman said. "We very much take their opinions into account. Retailers and distributors can provide very helpful information regarding the market for the product."
Retailers, for example, might show the domestic wood bedroom industry's problems arise from issues like poor product quality, slow delivery or limited capacity. They can't, however, cite price alone as a reason not to rule for the petitioners.
"They can't say, 'Don't impose duties because it would hurt us'," Deyman said. "It's not that the commissioners don't care about (the retailers') position, but by law they have to rule on whether the dumped imports are hurting domestic producers."
It's often difficult for overseas producers to win a case at the preliminary ITC investigation, said Matthew McConkey, an attorney with the Washington law firm Coudert Bros., which has defended offshore manufacturers in U.S. antidumping cases.
Even if the ITC does rule that there's significant injury to the domestic industry and refers the case to Commerce, offshore manufacturers can take steps to show they aren't dumping. Typically, Commerce will investigate several major producers and compare their operational costs to, in China's case, a surrogate economy, McConkey said.
"There are things they can do to amend their production processes or accounting procedures," McConkey said. "The Department of Commerce will show discretion in applying duties."
Non-investigated manufacturers would receive a questionnaire Commerce would use to assess the degree, if any, of dumping margin.
"The real benefit the Chinese manufacturers have right now is that this case is playing out in the press — they know it's coming," McConkey said. "Sometimes you don't hear about an antidumping petition until it's filed."
