The U.S. Lifts Tariffs on Apple Juice Concentrates

China's fruit juice companies will become more active in the United States, after the U.S.Department of Commerce lifted the 10-year-long anti-dumping tax on the country's apple juice concentrate products following a full review, analysts and industry insiders said on November 17,2010.

"Through this case, Chinese businesses will learn to make use of the legal procedures in these types of disputes with the U.S. As long as they are operating within the framework of the World Trade Organization, there is no need to be afraid of unreasonable anti-dumping charges, " said He Weiwen, director of the China-US Economy and Trade Research Center at the University of International Business and Economics.

The U.S. Department of Commerce first launched its anti-dumping investigation against China's apple juice concentrate products in June 1999.

The following year, the department announced a ruling imposing an average tax rate of 14.88 percent on companies who disputed the charge, and one of 51.47 percent on companies that failed to respond.

In July 2000, many companies appealed to the U.S. Court of International Trade. In 2003, six out of the 10 who appealed were exempted from anti-dumping duties.

Currently, the U.S. consumes about 0.3 million tons of apple juice concentrate on average each year, and is one of the most important markets for Chinese exporters.

"For the last decade, small and medium-sized enterprises have been blocked out of the U.S. market. Now the situation has completely changed. As the U.S. market becomes more accessible, fiercer competition among Chinese companies may further lower the price of the product. In that case, a regulatory mechanism must be established to avoid any potential chaos in the market," said Chao Junwen, an official in charge of apple juice exports with the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal By-products.

However, "given China's current production capacity, the U.S. market is unlikely to be affected within the near future," he said.

Tan Zhen, a manager with SDIC Zhonglu Fruit Juice Co, one of the largest fruit juice concentrate producers in China, echoed Chao's opinion.

"More and more a small and medium-sized enterprises in the industry will rush to the U.S. market with more competitive prices. However, in the long term, the establishment of an international brand is of paramount importance," he said.

In 2009, Tan's company earned 890 million yuan ($134 million) in overseas markets, with 45 percent of its products being exported to the U.S. By comparison, revenue in the domestic market was 12 million yuan.

Many companies already trading in the U.S. market are optimistic about the prospect of increased competition.

"The recent exemption of anti-dumping duties will have no negative impact on our operation. Our business in the U.S. market has been quite profitable," said a manager, who declined to be named, from the marketing department of Yantai North Andre Juice Co, a major fruit juice producer in China.

Yantai North Andre Juice was one of the first Chinese companies to be exempted from anti-dumping duties in 2003.

"We have no fear of the incoming competition," said the manager.