Catfish and furniture: Unfair or free trade?
Ray Allegrezza, Editor in chief -- Furniture Today, August 4, 2003
The move by the American Furniture Manufacturers Committee for Legal Trade to file an antidumping petition against bedroom furniture from China left many industry observers wondering if the group was just trolling, or did it have bigger fish to fry?
King & Spalding, the legal team for the group, asserts that "high dumping margins exist on imports of bedroom furniture from China and that the domestic industry producing bedroom furniture is materially injured by reason of such imports."
Naturally, manufacturers with factories in China disagree. They say they aren't dumping, but simply are exporting furniture at prices that reflect low labor costs and high-tech, highly efficient factories.
Last week's Kiplinger Letter predicted that domestic furniture makers hoping to see tariffs imposed on Chinese furniture may be disappointed. Kiplinger's take is that China's leg up is cheap labor, not a government subsidy under the laws that regulate trade.
While my understanding is that those bringing the petition do not have the burden of proving China's costs, I am happy to relinquish the intricacies of that debate to minds far more erudite and better versed in the law.
Even so, last week's story about the catfish that didn't get away is cause for speculation. In case you missed it, the U.S. International Trade Commission ruled that Vietnam was illegally dumping catfish on the American market and slapped stiff duties ranging from 37% to 67% on catfish filets coming from that country.
The Vietnam government had argued that it could afford to sell the catfish at lower prices because of low labor costs. The U.S. government maintained that since Vietnam is a non-market economy, the issue of cheap labor couldn't be measured accurately against that of a free market.
The ruling prompted the Vietnam Assn. of Seafood Exporters and Processors to complain that a small group of catfish breeders in some Southern states were able to get American authorities to ignore the principles of free trade.
Now, Vietnam is concerned the ruling could widen the net for possible impact on its shrimp market, a segment much larger than catfish
While the products in question — catfish and bedroom suites — are very different, the heart of the issue remains the same: Unfair advantage or free trade?
In a recent conference call with industry analysts, Mickey Holliman of Furniture Brands International warned of a need to "be careful to draw a distinction between illegal acts — which should not be tolerated — and the adverse effects arising from legal imports or from the soft business environment over the past few years, all of which is simply part of the tough facts of life in our competitive industry."
Sage advice, especially as the industry wades into uncharted waters.
What's your opinion? E-mail me at rallegrezza@reedbusiness.com and let me know.
