Seven manufacturers of tissue paper and crepe paper products and a national union joined together in formally charging the People’s Republic of China (“China”) with undercutting the US industries through aggressive pricing tactics, coupled with import surges, that have severely injured the industries and workers.

The unfair trade petition, filed last week with the US government, alleges that Chinese manufacturers sold the tissue paper products and crepe paper products at less than fair value. The petition further charges that this unfair trading scheme has caused injury to the domestic industries and continues to threaten their viability.

Selling at less than fair value is a practice known as “dumping” and is a violation of US trade laws and the rules of the World Trade Organization. To ensure fair pricing, the petition requests antidumping duties in excess of 100% be imposed on the products that are the focus of the unfair trade investigation, i.e., decorative and wrapping tissue paper products and crepe paper products usually sold in streamers.

The US government looks at several indicators to determine if foreign producers are violating the trade laws, including volume of imports, U.S. market share lost to the imports, price undercutting, and lost sales and revenues. The petition presents concrete evidence that between 2001 and 2003 imports of tissue paper and crepe paper from China soared and captured a significant and increasing share of the domestic market. It charges further that the increasing volume and market share of unfair imports from China has been achieved through aggressive import pricing and underselling of domestic producers; and that the level of underselling triggered lost sales and price reductions causing loss of revenue.

The petition explains that, “the presence in the US market of a growing volume of unfairly traded tissue and crepe paper imports from China has had a depressive and suppressive effect on domestic producers’ prices.” According to David A. Hartquist, an international trade attorney and counsel to the petitioners, “Given that price is the primary means of competing in the domestic tissue paper and crepe paper market, domestic producers have been forced to lower prices in response to the increase in low-priced, unfair imports that have been the cause of injury to the US producers and workforce.”

The petitioners requested antidumping duties of 110% be assessed on imports of tissue paper products from China and 186% on crepe paper imports.

The US Commerce Department and International Trade Commission (ITC) determine whether dumping exists and if a US industry has been injured as a result. During the course of the typically year-long investigation, the Commerce Department first will announce preliminary antidumping duties and then follow several months later with final antidumping duties. At the preliminary stage, the Customs Service will require importers to pay a cash deposit or post a bond equal to the estimated dumping margin. Normally, the actual collection of antidumping duties begins after the ITC announces whether the dumped imports injured an industry and Commerce issues an “antidumping order.”

The petitioners in the case are: Seaman Paper Company of Massachusetts, Inc., Otter River, Massachusetts; Eagle Tissue LLC, South Windsor, Connecticut; Flower City Tissue Mills, Co., Rochester, New York; Garlock Printing & Converting, Inc., Gardner, Massachusetts; Paper Service Limited, Hinsdale, New Hampshire; Putney Paper Co., Putney, Vermont; American Crepe Corporation, Montoursville, Pennsylvania; and the Paper, Allied-Industrial, Chemical and Energy Workers International Union, AFL-CIO, Washington, D.C.

David A. Hartquist heads the international trade practice of the Washington, D.C. law firm Collier Shannon Scott PLLC.