Textile anti-dumping case: private choice of national interests
Since joining the WTO in 2002, China’s entrepreneurial journey has been intertwined with various trade disputes.
This newspaper learned from the Zhejiang Provincial Department of Foreign Trade and Economic Cooperation that from 2002 to the end of 2007, more than 4,000 companies in Zhejiang Province encountered 159 anti-dumping cases filed by foreign countries, with a direct amount of nearly US$2.3 billion involved. The total number of anti-dumping cases involved and the The total amount accounts for more than 40% of the country’s total.
In the experience of many “foreign lawsuits”, local companies have left behind some typical cases of tenacious resistance. Among them, the one that attracted attention was undoubtedly the “China-US Textile Anti-dumping Case” that occurred in 2005.
When it comes to this anti-dumping, Zhang Yong, director of the Fair Trade Bureau of the Zhejiang Provincial Department of Foreign Trade and Economic Cooperation, still remembers it fresh. He said that from 2002 to 2004, Zhejiang, a major foreign trade province, had encountered 116 anti-dumping and countervailing cases filed by 18 countries, involving US$2.822 billion, accounting for one-third and one-quarter of the country’s total.
Canvas anti-dumping: throwing stones to ask questions
Since March 2005, the American company TaraMa-terials has submitted complaints to the U.S. Department of Commerce and the U.S. International Trade Commission respectively, requesting that anti-dumping cases be filed against art canvases from China. investigation. On May 16, the U.S. International Trade Commission initially determined that art canvases from China had caused damage to the U.S. industry and immediately launched a dumping investigation.
This case involves more than 20 domestic companies, but their trade volume is not large. According to statistics, the US canvas market sales in 2004 were more than 40 million US dollars, of which imports from China were more than 6 million US dollars, accounting for only 15% of the US market.
China Textile Industry Association spokesperson Sun Huaibin said that at that time, the tax rate for Chinese canvas exports to the United States was 6%. If the United States imposed punitive tariffs after winning the lawsuit, the preliminary ruling would be 244%. This means that our country’s canvas products will withdraw from the US market.
In April 2005, the China Chamber of Commerce for Import and Export of Textiles specially organized emergency consultations for the companies involved in the case. Three companies, including Ningbo Kangda Import and Export Co., Ltd., Wuxi Phoenix Painting Materials Co., Ltd. and Jinhua Huanyu Canvas Co., Ltd., expressed their willingness to actively respond to the lawsuit. , the amount involved was US$3.22 million.
“The Canvas War is of great significance to other textiles exported from China to the U.S. market.” Wang Tao, the legal department of the China Chamber of Commerce for Import and Export of Textiles, who has been responsible for this matter, believes that the United States is trying to take a comprehensive measure against China’s textile products are boycotted, and the United States does not rule out expanding the types of anti-dumping products in the future.
According to statistics from the Ministry of Commerce, textile exports are one of the important forces driving my country’s foreign trade exports. In 2004, my country’s exports of textiles and clothing were US$95.1 billion, accounting for approximately 16% of the total annual exports and 1/4 of the total textile trade. . The textile industry is also one of my country’s livelihood industries. The domestic textile industry currently employs 18 million people directly and more than 100 million people indirectly.
“China has become a major victim of anti-dumping measures, and Zhejiang has become one of the ‘hardest hit areas’.” Zhang Yong said that canvas is an extended product of textiles and is a labor-intensive industry. The textile anti-dumping case initiated by the United States involves nearly 100,000 employees in our country and directly affects the employment of more than 20 companies and 5,000 people.
Xu Guanliang, the boss of Ningbo Kangda Company, called on the majority of companies involved in the case to consider the overall situation and actively respond to the lawsuit through legal channels. He hopes to form a joint response mechanism between the government, enterprises and associations to respond to anti-dumping litigation and help enterprises in information collection and other aspects.
Increased tariffs are a blessing despite defeat
On October 28, 2005, the U.S. Department of Commerce determined that dumping was established by the Chinese canvas manufacturers responding to the lawsuit, and the preliminary ruling imposed anti-dumping duties of 55.78% to 73.66%. Tax rate, while non-responding companies were charged a high tax rate of 264.09%. Cornell University immediately chose to continue its defense in order to seek a fair verdict.
“The U.S. sent two representatives to Ningbo for on-site verification for two weeks on December 1, 2005.” Kangda boss Xu Guanliang told reporters that during the half-month inspection by the U.S. representatives, Kangda A temporary team of 10 staff members was mobilized to actively cooperate with the US investigation. Everything from raw material receipts to sales records and even duty attendance records were checked one by one. Even the weight of a nail in the picture frame was recorded by the American representative.
But by March 24, 2006, when the U.S. Department of Commerce announced the final results, it imposed a “punitive tax rate” of 264.09% on Cornell University on the grounds that “Cornell University failed to cooperate with the investigation.”
“The price of the surrogate country adopted by the US Department of Commerce is higher. Chinese companies use paulownia wood to make picture frames, which is very cheap in the Chinese market. However, the US prosecution chose wood imported from India for comparison. The price It is extremely expensive, which is why we reached the outrageous conclusion that the dumping rate reached 264.09%.” Xu Guanliang told reporters. It is understood that the price of imported wood in India is more than 40 times that of Paulownia.
In 2006, the total export value of Chinese canvas companies to the United States was only US$1.6 million, a year-on-year decrease of 81%. Since it has not obtained market economy status and has been levied high anti-dumping duties, Ningbo Kangda has a long-term future.For a period of time, it basically gave up its US business.
However, Kangda Company’s business has not shrunk. In March this year, Ningbo Kangda Company invested 115 million yuan to build an art supplies industrial park in Daxie Development Zone, mainly producing paints, picture frames, easels, painting bags and other products. At present, the company has become one of the largest art product suppliers in the country.
Starting from June 1 this year, the “Canvas Frame and Easel Industry Standard” drafted by Kangda Company has been officially approved and implemented by the National Development and Reform Commission. Xu Guanliang told this newspaper, “The unit that obtains the right to formulate standards will become a benchmark for improving the overall level of the industry, and the brand effect is considerable.”
“We have entered a state of perfect competition!” On July 28, Xu Guanliang said at an internal meeting of Kangda Group that the painting materials industry is currently facing many difficulties, such as: the sluggish international market has led to insufficient orders and declining sales performance; RMB appreciation, rising raw material prices, and reduced export tax rebates have caused industry profits to decline; overcapacity has led to competition If it is too intense, it will be difficult for enterprises to survive; the income of employees will generally decline; and so on.
But Xu Guanliang is not pessimistic. He admires the famous saying of Hu Xueyan, a businessman in the late Qing Dynasty, “The harder the business is, the more opportunities there are.”
“When you occupy the market of another country with overwhelming force, you are bound to encounter resistance from the other party.” Jin Yonghui, deputy director of the Zhejiang Provincial Department of Foreign Trade and Economic Cooperation, believes that trade protection caused by factors such as the U.S. economic recession and slowdown in economic growth The rise of anti-subsidy cases and the rapid growth of Zhejiang’s exports are the macro-background for the rise in anti-subsidy cases.
Zhang Hanlin, Dean of the China WTO Research Institute at the University of International Business and Economics, believes that China’s export trade has been growing in recent years, which to this extent shows that Chinese companies are gradually adapting to WTO rules. However, according to China’s WTO accession agreement, non-market economy provisions will end in 2016, and some transitions that still constrain my country’s macroeconomics and opening-up have not yet been completed. In this sense, the transition period for China’s accession to the WTO has not ended.
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