Chinese companies eager for review
By Jeff Linville -- Furniture Today, March 27, 2006
High Point — Many Chinese wood bedroom furniture manufacturers say they're eager to have their books reviewed by the U.S. Department of Commerce to show they aren't guilty of dumping goods in the United States.
When the DOC set its initial antidumping duty rates in 2004, the numbers were determined from a review of only the seven largest Chinese exporters. People on both sides of the issue have complained that this wasn't a sufficient sampling.
Earlier this year, antidumping petitioners listed for the DOC more than 50 Chinese companies they wanted reviewed, in expectation of seeing higher duties charged on imported wood bedroom furniture. That list includes four of the original mandatory respondents including: Dongguan Lung Dong Furniture (which received a duty of 2.32%); Dorbest (7.87%); Lacquer Craft (2.32%) and Starcorp Furniture (15.78%).
One notable exception was Markor, which the government determined had not been dumping and was excused from the review process.
Other big companies aren't guaranteed that their rates will stay the same, said Geoff Beaston, president of Fine Furniture Design & Marketing, which is seeking a review for itself. One or more of these manufacturers could get lumped into a general category and pay either the Section A (6.65%) or all-China rate (198%).
If that were to happen, the duties to be collected are retroactive to January 2005 or even June 2004, according to Joe Dorn, attorney for the petitioners.
For example, Lacquer Craft was initially given a 4.9% rate in June 2004, but that was cut to 2.32% after further review. If the DOC decided to raise the rate again, the duties would be retroactive to a maximum of 4.9% to June 2004.
Because of that concern, Lacquer Craft is one of the dozens of Chinese companies asking for a review.
"In a sense, it's a whole new ball game," said Kevin O'Connor, president and CEO of Legacy Classic, a Lacquer Craft company. "We have absolutely nothing to hide," he said, which is why the company wants to be reviewed individually rather than lumped in with other manufacturers.
Legacy Classic imports bedroom furniture mostly from Lacquer Craft's own plants, but also gets some from Markor, so the goods are either duty-free or receive just a 2.32% duty. It's not much, O'Connor said, but it's more about the principle.
"We believe we ought to have a lower rate or none at all," echoed Ken Fonville, vice president of merchandising at Fairmont Designs, which received the Section A rate. Fairmont Designs doesn't have the cheapest prices, he said. The goods are competitively priced, but still earn the company a profit.
For some of the smaller manufacturers, the Chinese government has offered financial support, but Fonville said none of the bigger exporters — including Fairmont's source company, Dongguan Sunrise Furniture/Shanghai Sunrise Furniture — have any government support.
By choosing to investigate the seven biggest companies, the government probably missed the factories that really are dumping, said O'Connor. Lacquer Craft is part of a publicly traded company now, so why would it want to sell product at a loss and have to face its shareholders, he asked.
"There's no guarantee that the companies the Department of Commerce chooses will be the most egregious dumpers," said Doug Bassett, vice president of sales and marketing for case goods producer Vaughan-Bassett, one of the companies that originally petitioned for the antidumping review.
The petitioners want as broad an investigation as possible, Bassett said, but realize the DOC has limited resources.
Beaston of Fine Furniture said it's up to the DOC to set the criteria for deciding which companies to sample. The department has said it can't review everyone who requests it. The DOC's Web site says federal law allows it to investigate "a sample of exporters, producers or types of products that is statistically valid based on the information available at the time of selection."
