Washington — After months of sometimes-heated discussions among manufacturers, retailers and importers, the game is now afoot on an antidumping petition targeting Chinese wood bedroom furniture, with the first public hearing set here Nov. 21.
Lawyers for both U.S. manufacturers and Chinese importers say they expect to prevail, and government agencies also will hear from lawyers representing major U.S. retailers who have organized to fight the petition.
If the petitioners are successful, preliminary duties ranging from 158% to 441% could be imposed on Chinese bedroom imports beginning next spring. By law, the proceedings must be completed by the end of next year. Any duties collected would go to the petitioning companies.
The International Trade Commission scheduled the Nov. 21 hearing following the Oct. 31 filing of the antidumping petition by 27 members of the American Furniture Manufacturers Committee for Legal Trade, comprised of makers of bedroom furniture. The petition also was filed with the U.S. Department of Commerce.
Chinese manufacturers fighting the action have organized under the Chinese Furniture Manufacturers Committee for Free Trade.
The petitioners contend that antidumping duties beginning at 158% for beds would be required to level the playing field for the U.S. bedroom industry. The petition also proposes an average duty of 250% on bedroom pieces comprising a suite, and duties of up to 441% on select pieces of bedroom furniture.
If a Department of Commerce investigation finds in the petitioners' favor, it could assign duties at other levels, some on a company-by-company basis. Chinese producers that did not cooperate with the investigation would be subject to prohibitive duties on bedroom product.
"We have presented detailed and extensive evidence of dumping," said Joe Dorn, the Committee for Legal Trade's lawyer and an attorney in the Washington law firm King & Spalding. "The petition is about preserving U.S. factories and U.S. jobs, and presents very compelling evidence of the serious injury suffered by the U.S. wood bedroom industry and its workers from a surge of unfairly priced imports from China."
"The petition documents some of the most egregious examples of dumping by the Chinese, which requires the highest antidumping duties," said John Bassett, president and chief executive officer of Vaughan-Bassett Furniture Co. and chairman of the Committee For Legal Trade. "Other Chinese manufacturers will, of course, be able to present evidence to the U.S. Commerce Department arguing that they qualify for lower duties than the most egregious offenders."
Chinese expect to prevail
Robert Novick, a partner in the Washington law firm Wilmer, Cutler & Pickering and part of the legal team for the Chinese manufacturers, said the petition held no surprises.
"We believe we will prevail either at the ITC preliminary stage or, if necessary, at the final injury investigation," he said.
While Novick didn't go into detail on strategy, he said opponents will question whether the petition has the necessary industry support, and whether any injury is due in part to domestic producers' own decision to do business in China.
A number of petitioners import a considerable amount of bedroom furniture from China.
No. 1 U.S. manufacturer Furniture Brands International, whose Broyhill, Thomasville and Henredon divisions still have considerable domestic capacity despite a growing portion of imported case goods in their lines, came out strongly last week in opposition to the petition.
Lynn Chipperfield, senior vice president and chief administrative officer, said FBI would mount its own legal challenge to the petition. "Having several entities in opposition may be just as effective or more effective than having one entity, as long as the message is the same," he said.
Vaughan-Bassett's Bassett said most of his customers support the petition.
"The vast majority of our dealers, especially the family-owned small and midsized dealers with whom we do business, have told us they support the petition and support our efforts to save American jobs," he said.
Many larger retailers, however, are against the petition, and have retained the Richmond, Va., law firm Hunton & Williams to oppose it. Rooms To Go, Rhodes, City Furniture, Havertys and The Bombay Company are seeking financial support from other retailers and importers to assist their efforts.
Keith Koenig, president of City Furniture in Tamarac, Fla., said, "(The petition has) all the classic problems of protectionism. It just keeps consumers from getting what they want at the price they're willing to pay."
Retailers that depend heavily on direct imports may be much more exposed to potential duties, since they would be listed as importers of record, said industry analyst Jerry Epperson of Mann, Armistead & Epperson.
"If you're a smaller retailer who might be purchasing less-than-container quantities through an importer, there's still a chance you wouldn't absorb the entire cost of the duty yourself," he said.
Climate now favors petition
Epperson said in July the petition had a one-in-three chance of success. He now rates the odds 60–40 in the petitioners' favor. "What has changed is the political environment. Jobs are the hot topic today," he said.
According to the U.S. Department of Labor, 34,700 wood furniture workers, or 28% of the domestic workforce, have lost their jobs in the past two-and-a-half years.
Epperson also noted that China's refusal to allow its currency to float created much tension in its relations with the United States. "President Bush did everything but send himself over there to discuss the issue," he said. "All he needed was for China to adjust its currency 3% to 4%. Now we have an angry executive branch, which is reflected in the legislative branch."
In addition to garnering union and non-unionized worker support, the Committee for Legal Trade has generated widespread support in Congress.
In October, the committee won the backing of the Congressional Furnishings Caucus, a bipartisan group of 27 congressmen representing districts with furniture interests. The group sent a letter to President Bush last week urging action on the petition, as well as other actions that would benefit the furniture industry.
The committee also has the support of numerous U.S. senators, led by North Carolina Sen. Elizabeth Dole.
