Rising Trade Probes Spur Makers Into Action

Exporters from the United States are facing an increasing amount of lawsuits from emerging markets, which is forcing some to come together and counter the claims.

China suppliers are realizing that they are no longer able to sit in the background while lobbyists and associations in their markets for exports which include emerging economies, bring countervailing and anti-dumping suits against them. An increasing number of exporters have joined forces to combat such accusations.

In the spring of this year, two glass fiber makers in India filed an anti-dumping lawsuit against their competitors in China, which included Jushi Group Co. Ltd. The company has formed a separate team to address the matter. In the meantime, while waiting for the verdict, Junshi is paying provisional taxes that are lower by 60 percent than the other suppliers affected by the lawsuit.

In April 2009, four exporters of ceramic tiles were able to respond to India’s anti-dumping probe. The four companies all won and didn’t have to pay charges. However, the ones who did not answer the complaint were assessed taxes that were 137 Rs. ($2.90) for each square meter.

The China Fiberglass Industries Association encourages exporters to take this step, especially those that are looking to expand their market since it is more likely to succeed when they work together. Costs can be shared as well. The typical company spends between $30,000 and $100,000 to fight lawsuits. This can last as long as between 13 and 15 months. Resolving the issue as a team requires an equal amount of time and money.

Indeed, some organizations and local authorities are offering assistance to suppliers who are affected, which includes seeking lawyers and other experts to provide information on options and the implications. Ceramics associations and the Foshan government have arranged companies in the Guangdong city in the province to file a countersuit against Thailand’s anti-dumping investigation. More than 100 companies have been involved in this ongoing probe.

Furthermore, there is in addition, the China Ceramic Industry Association in Foshan is currently looking at the establishment of an anti-dumping foundation that could offer financial aid to cover the costs of litigation. The association hopes this will help even smaller businesses to take a more active role with regard to responding to antidumping suits. While it is true that the number of companies making rebuttals is increasing, the majority are large and mid-sized companies.

But there are a few suppliers who believe that to take the appropriate decision. In comparison to the EU or the US, exports for emerging markets are less in terms of volume and value. In 2009 the total Chinese exports to emerging markets which included India as well as ASEAN-member nations totaled $304.9 billion. However, sales to the US, in particular, were $220.8 billion.

In this way, they’d prefer to explore other export markets rather than invest the time to become familiar with lawsuits and counter-actions.

The number of lawsuits, investigations, and investigations is growing.

Anti-dumping regulations have caused 10% to 15% of factories to shut down or to target markets in other areas. This amounts to roughly between 200 to 450 companies in the ceramics industry and 20 to 45 businesses in the glass fiber industry.

In the initial five months of 2010, different countries in South America filed 19 cases which included anti-dumping as well as provisional minimum price measures against 21 goods that came from China. Argentina was the most prominent, with ten lawsuits being followed by Brazil and seven. Mexico and Colombia were responsible for the remainder.

South Asia, India in particular, is one of the markets which has been active in investigating Chinese-made products. Since the beginning of this year, India is now conducting anti-dumping investigations into China’s exports of glass fiber penicillin, steel G potassium 6-APA, PVC coating, and glass fiber penicillin.

The statistics provided by the Chinese Ministry of Commerce also showed the totality of 13 trade investigations involving 26 nations that were launched in the initial four months of the year. Over 60 percent of them came out of emerging economies.

Seventy-nine anti-dumping lawsuits were filed against various products manufactured by and imported from China in 2009. The same year, twelve countervailing and nine safeguard cases were analyzed.