Commerce Preliminarily Finds Dumping of Coated Free Sheet Paper

After a preliminary determination by the Commerce Department’s Import Administration, U.S. importers of glossy paper from China, Indonesia, and South Korea are posting cash deposits or bonds.

by Tim Truman

The Commerce Department preliminarily determined that producers and exporters of glossy paper from China, Indonesia, and South Korea have sold their products in the U.S. market at less than fair value. The preliminary dumping margin for Indonesia was 10.85 percent. Margins ranged from 23.19 to 99.65 percent for China and from zero to 30.86 percent for South Korea. “Dumping” is when a foreign producer sells a product in the United States at a price that is less than fair value—often the producer’s sales price in the country of origin or the cost of production. The dumping margin is the difference between the price (or cost) in the foreign market and the price in the U.S. market.

U.S. importers of glossy paper from those countries are now posting cash deposits or bonds equivalent to the combined rates from the preliminary determinations for the antidumping duty (AD) investigations and the companion countervailing duty (CVD) investigations, which were announced in March 2007. (See April 2007 issue of International Trade Update.) When combined with the preliminary CVD rates, total deposits equal 32.09 percent for Indonesia, and they range from 43.54 to 117.81 percent for China. The Commerce Department issued a negative preliminary determination in the South Korea CVD investigation. Therefore, only cash deposits or bonds equal to the AD preliminary margins are required for Korean imports.

“This administration continues to aggressively enforce our trade laws to ensure a level playing field for American manufacturers,” said David Spooner, assistant secretary for import administration. “By acting on these petitions, the United States is demonstrating its continued commitment to prevent unfair trade practices.”

In light of the companion CVD investigation with respect to China, the Commerce Department is contemplating revising its non-market economy (NME) dumping practice to recognize market-oriented enterprises (MOEs). On May 25, 2007, the Commerce Department published a Federal Register notice asking for public comment on the concept of MOEs. At this point, however, the Commerce Department does not have the information necessary to decide whether to create an MOE test or how the test would be administered. The dumping margins in the China investigation, therefore, are based on the Commerce Department’s current NME methodology.

The Commerce Department initiated the investigations on November 20, 2006, after determining that the petitions filed by NewPage Corporation of Dayton, Ohio, met the statutory requirements under the Tariff Act of 1930. The final determinations in both the AD and CVD investigations are scheduled for October 17, 2007.

Tim Truman is a senior import policy analyst in the International Trade Administration’s Import Administration unit.