U.S. Sets Duties on Some Chinese Bags

Plastic bags from the Chinese firm of Rally Plastics Co. Ltd. that were exported to the U.S. between August 2007 and July 2008 may be levied anti-dumping duties of 17.95 percent, according to a preliminary decision by the U.S. Department of Commerce.

The ruling, published July 29 in the Federal Register, also means that bags exported from Rally Plastics to the U.S. will be subject to an anti-dumping cash deposit rate of 17.95 percent, if the preliminary results are made final later this year.

In addition, Commerce said the anti-dumping cash deposit rate will remain at the most recent company-established rate for each Chinese bag exporter that was previously reviewed as part of its original 2004 anti-dumping investigation, and that the cash deposit rate for exports from all other Chinese bag exporters will remain at the previously established rate of 77.57 percent.

The ruling is part of the Commerce Department’s annual administrative review of a 2004 anti-dumping order on imports of plastic grocery and shopping bags from Malaysia, China and Thailand.

Three weeks ago, the agency ruled that plastic bags from Malaysia’s Euro Plastics Sdn Bhd would be subject to anti-dumping duties of 43 percent for exports made to the U.S. during that same period and that they would be subject to a 43 percent anti-dumping cash deposit rate going forward. A preliminary ruling on exports of plastic bags from Thailand is due Aug. 4.

If the Commerce Department maintains its preliminary rulings on Rally Plastics and Euro Plastics, each company will receive a bill from the U.S. Customs and Border Protection for that 12-month period that was reviewed that amounts to the duties, plus interest.

Rally Plastics is based in Zhongshan in the Guangdong province, and exports its bags to the U.S., primarily through Keenpac North America Ltd. in Goshen, N.Y.

Euro Plastics, based in Shah Alam, is part of Euro Packaging plc of Birmingham, England. Euro Plastics exports bags from Malaysia to the U.S. primarily through Euro Packaging LLC, its affiliated reseller in Salem, N.H.

The original petition resulted in anti-dumping duties ranging from 20-122 percent on bag exporters in China, Malaysia and Thailand.

Acting on a similar petition filed in March, the U.S. International Trade Commission ruled May 14 that there is reason to believe that plastic grocery and shopping bags from Indonesia, Taiwan and Vietnam are being sold in the United States at prices anywhere from 28-96 percent below their fair value.

The Commerce Department estimated the dumping margins at 76-96 percent for bags imported from Taiwan, 35-60 percent for bags from Indonesia, and 28-76 percent for bags from Vietnam.

The department also is investigating two policy lending programs, three grant programs, three income-tax programs, and three import and value-added-tax exemption programs from the Vietnamese government, to determine whether to impose countervailing duties against Vietnam.

A preliminary ruling on the anti-dumping and countervailing duties is due Sept. 7, with a final ruling due sometime between December and April.

The number of plastic shopping bags exported from those three countries has more than doubled from 6.8 billion in 2006 to 14.6 billion in 2008, increasing the combined market share of those three countries from 7 percent to 15 percent, said Joseph Dorn, a partner in the Washington law office of King & Spalding LLP, which represents a coalition of U.S. producers that brought the anti-dumping petitions.

In that same time frame, he said, the value of bags exported from those three countries has nearly tripled — from $63.5 million in 2006 to $182 million in 2008.

A dumping petition charges a company with selling its product in the U.S. at a lower price than it sells that same product in its own country, or at price lower than its cost of making the product. A countervailing duty petition alleges that a foreign government is providing financial assistance to benefit the production, manufacturer or exportation of a product.

Since the ITC and Commerce Department rulings in 2004, a number of China retail-bag manufacturers have moved packaging operations for those products to Vietnam. Commerce statistics now put Vietnam as the second-largest exporter of plastic retail bags to the U.S., and calculated the value of those exports at nearly $86 million in 2008, compared with roughly $19 million in 2006. Import taxes on bags from Vietnam are currently less than 5 percent.