For Immediate Release: November 27, 2007
Contact: Charles Skuba/Brittany Eck (202) 482-3809
COMMERCE FINDS UNFAIR SUBSIDIZATION OF PACKAGING SACKS FROM CHINA
WASHINGTON - The U.S. Department of Commerce today found that imports of laminated woven sacks from China were benefiting from unfair subsidies.
"Commerce found the Chinese government subsidized producers of sacks used for packaging such items as dog food and birdseed, " said Assistant Secretary for Import Administration David Spooner. "The Administration is committed to aggressively enforcing America's trade laws in order to achieve a strong and fair trading relationship. Commerce commonly investigates both dumping and subsidy claims and conducts all of its trade remedy proceedings on a case-by-case basis."
By law, domestic manufacturers have a right to petition Commerce and the International Trade Commission (ITC) to impose tariffs to counteract foreign subsidies. Commerce investigates the existence of subsides and the ITC determines whether domestic manufacturers are injured by the subsidized imports.
Today, Commerce preliminarily found that Chinese producers/exporters received countervailable subsidies ranging from 2.57 to 57.14 percent. From 2004 to 2006, imports of laminated woven sacks from China increased 80 percent by volume and were valued at an estimated $40 million in 2006. A final decision is currently due in June 2008.
In March 2007, Commerce applied the countervailing duty (CVD) law to China, a non-market economy, for the first time. Although Commerce always had the legal authority to apply the CVD law to non-market economies, in 1984 Commerce adopted a discretionary policy of not applying the U.S. countervailing duty law to non-market economy countries. Commerce reasoned that subsidies had no measurable economic impact in the 1980s Soviet-style economies that were then under consideration.
For more information about Import Administration or for the fact sheet on today's preliminary decision please visit www.trade.gov/ia .
Background
The Department of Commerce is charged with the enforcement of U.S. trade remedy laws including enforcing our domestic anti-subsidy law, the CVD law. Anti-dumping trade rules and countervailing duty trade rules are both tools that are sanctioned by the WTO to deal with unfair pricing and subsidization of imports. Government subsides distort the free flow of goods and adversely affect American business in the global marketplace. Foreign governments subsidize industries when they provide financial assistance to benefit the production, manufacture or exportation of goods. Subsidies can take many forms, such as direct cash payments, credits against taxes, and loans at terms that do not reflect market considerations. The statute and regulations establish standards for determining when an unfair subsidy has been conferred. The amount of subsidies the foreign producer receives from the government is the basis for the subsidy rate by which the subsidy is offset or "countervailed."
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