Lawmakers Call for ITC Action Against Chinese Subsidized Hardwood Plywood
The recent influx of subsidized Chinese hardwood plywood products to the U.S. market is devastating the local U.S. hardwood plywood industry and other industries, three lawmakers, including Senator Ron Wyden, D-Ore., told the U.S. International Trade Commission (ITC) Sept. 19. Senator Wyden praised the ITC’s December 2012 preliminary investigation (here) that determined U.S. industry suffered from Chinese hardwood plywood imports. The Commerce Department previously determined Chinese subsidies on hardwood plywood products were illegal (here).
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“Even though the U.S. hardwood plywood market has grown in recent years, American manufacturers are not seeing the benefits of that growth. U.S. manufacturers of hardwood plywood are operating at less than half of their production capacity,” said Wyden in testimony (here). “It appears to me that China’s subsidies, and the dumping practices employed by Chinese suppliers, enable these suppliers to unfairly capture market share that would otherwise go to American producers. The growing tide of Chinese imports are sinking the boat of the American hardwood plywood industry.”
Wyden said the Chinese government is practicing trade in a manner inconsistent with its international commitments in several other industries as well, including steel and solar panels. Despite U.S. access to the greatest global temperate forest and cost-effective, state-of-the-art manufacturing technology, domestic companies can't compete with companies financed by the Bank of China, in business relationships where return on investment is not the primary objective, said Congressman Peter DeFazio, D-Ore. (here). “China has gone from a minor player in the hardwood plywood industry to near parity with U.S. production,” said DeFazio in testimony. “Despite aspects of the economy improving, these U.S. jobs never came back.”
The ITC must demonstrate that the U.S. government is willing to enforce illegal dumping and subsidy punishments in order for Congress to endorse pending free-trade agreements, said DeFazio. The administration is pushing to conclude Trans-Pacific Partnership (TPP) negotiations by the end of 2013 before bringing TPP implementation legislation to Congress (see 13091118). The damage caused by Chinese subsidies is not limited to the U.S. hardwood plywood industry, said Congressman Peter Welch, D-Vt., in testimony (here). “If this industry continues to be undercut by unfair Chinese products it will have a devastating impact on not only the hardwood plywood suppliers, but supportive industries across the country as well,” said Welch.
Senator Wyden urged the ITC to apply U.S. law accordingly. The ITC will decide in early October when to vote on the investigation, said an ITC official, saying the vote will likely take place later that month.