Pros, cons of China safeguard tariffs aired at Toronto market
Final ruling could come in June
Michael J. Knell -- Furniture Today, January 20, 2006
TORONTO -- The Canadian Council of Furniture Manufacturers and the Coalition for Fair Furniture Trade both strove to present their case on safeguard tariffs on Chinese imports to retailers during the winter market here.
In a letter to retailers seeking support for its drive against tariffs, the Coalition for Fair Furniture Trade, comprised mainly of importers, argued that duties wouldn’t save domestic factories and would hurt retailers (*Also see Anti-safeguard group seeks support from Canadian retailers).
The CCFM said in a written statement the only way to determine whether Canadian manufacturers have suffered material injury from the rapid rise in Chinese imports is to allow the Canadian International Trade Tribunal to do its work.
“A thorough analysis by an independent body like the CITT is the only way to determine the real impact of (imports, and) … to reduce the market disruption currently facing the industry. That market disruption is reflected in plant closures, lost sales, layoffs and a generalized weakening of this manufacturing industry sector,” the CCFM statement said.
In early December, the CITT sent a questionnaire to Canadian manufacturers seeking more information about the impact of imports on their operations. The surveys were to be returned by Jan. 9, but an extension until Jan. 30 has been granted.
The CCFM, comprised of factory associations Furniture West, the Ontario Furniture Manufacturers Assn. and the Quebec Furniture Manufacturers Assn., said they have the right to be heard under the rules laid down by the World Trade Organization.
“Over the last few weeks, importers have teamed up to express their opposition to this effort,” the CCFM said. “The importers, primarily concerned with their own affairs, are brandishing the spectre of price increases and falling sales, which they claim would result from the imposition of safeguards.
“On that, the council would like to emphasise that when nations belonging to the WTO agreed to China’s admission, they provided adjustment mechanisms such as safeguards for industries threatened by dramatic increases in imports from China…. The industry is taking fully legitimate steps to apply those mechanisms.”
The CCFM compared the situation to that of the early years of the North American Free Trade Agreement. At that time, the industry sought and received a five-year period in which to adjust to the new competitive environment, the CCFM said.
The council contends that Chinese imports threaten the survival of the Canadian furniture manufacturing industry. “Despite the importers’ concerns about the safeguards, there can be no advantage to the Canadian economy in seeing an entire segment of industrial activity disappear,” the CCFM said.
Once the manufacturer surveys have been submitted to the CITT, it will have 21 days to decide whether to investigation the CCFM’s complaint. The tribunal would have 90 days to conduct any investigation, hold hearings, write a report and make a recommendation to the federal government. A final ruling likely would not be made until sometime in June at the earliest.
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