Antidumping action could affect everybody
Jerry Epperson -- Furniture Today, August 4, 2003
The move to restrict Chinese bedroom imports is important and could affect nearly everyone in our industry. Will it have an impact soon? It already has. At least one domestic manufacturer has canceled plans for a factory in China. Other Pacific Rim nations are examining their opportunities if the move is successful. Everyone is reviewing their plans. You should too.
First, some basics. This action is based on laws that have been in place since 1931. All members of the World Trade Organization condemn dumping. The United States has 44 antidumping actions in place against China today, and China has about a dozen against the United States.
Second, this action focuses on wood bedroom furniture made in China and exported to the United States. No other countries or products are affected. Could other furniture categories or other nations see this type of action? Yes, but it requires a lengthy and detailed study. There's no doubt that bedroom furniture was chosen because it met all the complex criteria more fully than some other categories.
How soon could we see some form of duty? If the filings go smoothly and the preliminary finding by the U.S. Department of Commerce calls for duties, they could be collected and paid into an escrow-type account as early as next spring, although a final finding may not be in place until year-end 2004.
Will it happen? Your opinion is as good as ours. Be assured the legal powers will be aligned to make sure no detail is left unchecked, or argument unmade. Will there be loopholes and exceptions? If the government is involved, expect some.
We remember two decades ago when Japan, under U.S. pressure, dropped its huge tariffs on wood residential furniture. Instead, to protect its manufacturers, Japan put in place "quality standards" for imports — wood furniture must be able to be boiled, then frozen, without visible warping. The end of tariffs didn't do us much good.
Our concern is simple: No manufacturer here or abroad should rely on any artificial means to stay in business, whether it's government incentives to keep labor and other costs low, a currency that's not allowed to reflect economic changes, or a tariff that keeps competition out. We are a truly global industry, and while China is our largest competitor today, many nations will continue to find the U.S. market attractive.
It is unrealistic to think any antidumping action will suddenly make U.S. furniture manufacturing whole again. The best any company can hope is that trade laws and regulations will be enforced equitably and without exceptions.
Expect this action to take awhile, even after investigations are complete and corrective actions, if any, put in place. Once begun, these actions require decades of ongoing effort.
This is business, not rah-rah flag-waving or enemy name-calling. The outcome will be based on the laws, not emotion. Do not dismiss this lightly.
