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Wood mills form alliance, file petition on Chinese imports; aims to level the domestic hardwood playing field

WASHINGTON—The Coalition for American Hardwood Parity (CAHP), an association of U.S. manufacturers of engineered wood flooring, filed an unfair trade petition on Oct. 21 regarding imports of multi-layered wood products from China.

The petition, filed with the U.S. Department of Commerce and the International Trade Commission (ITC), asserts that imports of the product are sold in the United States at dumped prices, and that Chinese manufacturers have gained an unfair competitive advantage.

The petition also asserts that U.S. manufacturers of engineered wood flooring have suffered material injury as a result of these unfair trade practices, and that the industry continues to be threatened further by Chinese imports.

“We are in the middle of post filing submissions and are looking to the next step, a hearing on Friday, Nov. 12, to present our arguments,” said Jeff Levin, CAHP spokesperson and legal counsel. “Parties that oppose the petition will have an opportunity to present their perspective at this time.” No opposing parties were named at press time. U.S. hardwood mills involved in the petition include Anderson, Armstrong, Award, Baker’s Creek, From the Forest, Howell, Mannington Mills, Mohawk, Owens Nydree, Shaw Industries, Flooring by Colonial Craft and QEP.

Among numerous U.S. companies which import wood products from China, included in the petition are flooring suppliers such as Ark Floors, B&M Noble, BR-111, EcoTimber, Golden State Flooring, Home Legend, J.J. Haines, Johnson Premium, Max Windsor, Somerset, Teragren, Trinity Hardwood Dist., and USFloors.

The petition requests that the U.S. government investigate these unfair trade practices and their harmful impact on the domestic manufacturing industry, and apply antidumping and countervailing duties on imports of multilayered wood flooring from China to restore competitive parity in the U.S. market. The petition documents antidumping and countervailing duty margins at 242%, though the actual dumping and subsidy margin will be based on questionnaires given to Chinese manufacturers, Levin said, adding that the Coalition’s allegations are extremely well documented.

Case against China

“China has ‘dumped’ products into the U.S. market at prices that are well below fair value,” Levin continued. “Furthermore, Chinese manufacturers receive an array of government subsidies, including that country’s manipulation of currency exchange rates. All of these factors equate to an enormous unfair advantage for Chinese manufacturers, and injure the entire American hardwood flooring industry.

“Even more ominously,” he added, “these unfair trade practices present a fundamental, if not insurmountable, obstacle to the domestic industry’s ability to recover its competitive footing, even when underlying economic conditions in this country turn more favorable.”

The Department of Commerce has treated China as a non-market economy in every case thus far and has used Indonesia as a model economy to move forward with the filing, albeit a low estimate. In July, China’s gross national income was $3,620 per capita in 2009, while Indonesia’s was $2,230.

Levin assured this is a very well established process under U.S. and World Trade Organization laws. The U.S. government takes these situations very seriously and assures defense of the accused parties throughout the transparent process.

“These sort of investigations are not protectionist: It is not a gimme,” Levin said. “We are not looking to embargo. All we want is to equalize the price disparity from Chinese products. If they should correct those processes U.S. manufacturers have no problems competing, as long as everyone follows the rules on an equal playing field.”

The coalition hopes for a preliminary decision from the International Trade Commission by the end of the year. If it does, an escrow deposit requirement could be implemented by early next year with a final ruling and duty to be implemented by the end of 2011.

For more information on the petition, visit usfloorparity.org.