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ITC vote eliminates U.S. duties on Chinese plywood

WASHINGTON — The U.S. International Trade Commission has determined that the U.S. hardwood decorative plywood industry has not been materially injured by illegally priced hardwood plywood imports from China.

The ITC determination, which came in a 5-0 vote Tuesday, means the product will no longer be subject to U.S. government-imposed duties.

The product in question is hardwood and decorative plywood used in kitchen cabinets, shelving, RV and boat construction and some furniture. It is defined as a wood panel product made from gluing two or more layers of wood veneer to a core that is composed of materials such as veneers or medium density fiberboard.

A petition filed by a group of U.S. hardwood plywood manufacturers in September 2012 alleged that Chinese producers were selling product unto the U.S. market at unfair prices.

In a preliminary decision issued in November 2012, the ITC indicated that there was reasonable indication that the domestic industry had been injured in this case. Based on the initial determination, the DOC began a process that resulted in the assigning of both antidumping and countervailing duties on the product.

Antidumping duties address the pricing of the product, while countervailing duties are meant to address government subsidization of factories that produce these materials.

The domestic producers initially sought duties as high as 320%. This past September, the DOC issued final duties ranging from 55.76% and 121.65%. These duties, assigned to factories, but paid by importers of record, were to be applied to goods shipped to the U.S. from Jan. 1 to June 30, 2012.

The Coalition for Fair Trade of Hardwood Plywood, which filed the original petition last year, was disappointed by the latest decision. The group's attorney, Jeff Levin, said the ITC vote came despite the "fact that all Chinese imports of the product were found to be unfairly traded in the U.S. market by substantial margins."

"This industry, which has seen large portions of the U.S. market for hardwood plywood captured by unfairly traded imports to the pronounced detriment of this manufacturing industry, will face the continued threat posed by Chinese imports," he said in a statement. "We do not believe the ITC's determination is reflective of the facts presented in this investigation - or the realities of the marketplace."

The ITC held a hearing on the matter on Sept. 19 and voted on it this week. Details behind the ITC's decision will be in a report that becomes available to the public by mid-December.

Peg O'Laughlin, a spokeswoman for the ITC, said that the ITC preliminary decision last November was only based on the belief that the imports have caused injury. This allows the DOC to begin imposing duties on the product in question.
However, she noted, this is only a 45-day investigation and that the final investigation is based on a more in-depth review of the facts that determine whether there the domestic industry was in fact materially injured.

Officials with Mowry & Grimson, a Washington-based law firm representing importers on this issue, said they were pleased with the ITC vote.

"We were pleased that yesterday the U.S. International Trade Commission voted unanimously to reject duties of more than 70% on imports of hardwood plywood from China. Mowry & Grimson was lead counsel in the defense of the case, representing an alliance of American importers and end users, including the Kitchen Cabinet Manufacturers Association whose 100,000 U.S. manufacturing jobs contribute $8.6 Billion to our economy. As a result, the year-long case is over and our clients will receive millions in duty refunds."

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