November, 1998
By Matt McCallum
The apple industry has decided to fight back and China is listening.
On November 10 the U.S. Apple Association's (USApple) antidumping task force voted to recommend to the association's board of trustees that an antidumping petition be filed against foreign suppliers of low-cost apple juice concentrate, after viewing evidence of dumping of concentrate by several countries, mainly China, into the U.S. market.
That same week Chinese government officials met with the apple juice concentrators in the country and set a floor price on all product exported out of the country, said George Guo, salesman for Haisheng USA, a China-based exporter and producer of juice.
"They were afraid of the antidumping case," Guo said. "We don't know how long the price will last."
Imports of apple juice concentrate from China have increased 953% over the last three years, while the price for Chinese concentrate has fallen by 53% to about $3.50 to $4 a gallon. The government set the new floor price at $700 per metric ton for low acid concentrate leaving China (approximately $4.50 a gallon by the time it reaches the U.S. market) and $730 per metric ton for high-acid (approximately $4.75 a gallon), Guo said.
USApple President Kraig Naasz said the industry shouldn't start popping the champagne bottles just yet.
"If this action has indeed happened in response to the U.S. Apple Association potentially filing an antidumping lawsuit against foreign suppliers of apple juice concentrate to the U.S., then before we declare victory we must ask ourselves two questions," he said. "Is the alleged price sufficient to offset the economic devastation being suffered by the flood of cheap imports, and will this be a short-lived relief? It can be lifted with the same speed it was enacted the minute a threat of a suit is removed. The only way to set in stone a price increase of this kind is through the pursuit of an antidumping case."
The USApple board is expected to approve the recommendation of filing the petition very soon, Naasz said. The next step is to identify potential petitioners from the U.S. concentrate-producing industry who have been harmed by dumping, to form a coalition to fund the $1 million to $1.5 million cost of the action and prepare the antidumping petition to be filed with the U.S. Department of Commerce. The task force recommended that USApple facilitate this process.
Under U.S. trade law, domestic producers of a product can seek relief if it can be proven that foreign suppliers are "dumping" product in the United States - i.e., selling product at a price that is cheaper than it costs to produce. If dumping is found to be occurring, and is proven to be causing economic injury to domestic producers, the U.S. government will place a tariff on incoming product to level the playing field.
According to the analysis prepared by USApple's legal counsel on this matter, the petition must be brought by U.S. apple juice concentrate manufacturers. U.S. apple growers do not have standing to bring an antidumping case against foreign concentrate suppliers, even though the impact of those imports has been to dramatically depress U.S. processing apple prices - which for some growers are now below the cost of harvest.
The initial investigation and analysis of the issue was funded with assistance from two major apple juice processing cooperatives, Tree Top of Selah, Wash., and Knouse Foods of Peach Glen, Pa., in addition to USApple and two grower-based organizations, the Michigan Processing Apple Growers, Lansing, Mich., and the New York Apple Association, Fishers, N.Y.
On October 21 Michigan Governor John Engler called on President Clinton
to launch a trade investigation by the International Trade Commission (ITC)
to look into the low-priced apple juice concentrate that has flooded the
U.S. market, including Michigan, from China in recent months. So far no
response has been made to the request from the White House and ITC.
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