Thursday, August 22, 2013

Fighting the Fair Trade Battle: A learning process for long-term success

AEC Past Chairman Duncan Crowdis
When we embarked on this process to defend our industry against an exponentially escalating level of Chinese imports in 2009, there were many things we did not know about the journey we were about to take.

What we DID KNOW was that the industry’s future was at stake. We had done enough research to understand what China was doing and why (to be covered in a future blog) and that the 20% market share that they had taken was not going to be their stopping point. Something had to be done or we strongly believed that we would eventually lose the bulk of our market. What we also knew was that extruders are generally passionate about their businesses. It has been a lifetime’s livelihood for many of us, often starting with our parents and now one in which many of our children are counting on for their livelihood. No – while the Chinese are obviously formidable, what they were doing was and is predatory and illegal and we weren’t about to let them do this to us.

What we didn’t truly understand is where the process we faced was going to take us. Our original understanding was that it was a front-end-loaded process – a lot of work and information to pull together as we prepared our original case presented to the U.S. Department of Commerce and the International Trade Commission (ITC). Following a successful outcome, defined by duties being levied against imports from China, we anticipated the following steps:
  • A year or two of work to fight some potential appeals and what are called “scope requests”, which are requests for clarification from a U.S. importer who believes the products they import from China do not fall under the scope of the Department of Commerce orders
  • We also knew there would be an annual “administrative review” but were led to believe this was just a “minor” formality
  • And finally, every 5 years there would be what is termed a “sunset review”, which basically opens up the case to ensure there is still dumping and subsidies going on and, if so, the domestic industry remains “in harm’s way” because of them

Chock it up to naivety, a victim of our own success or the luck of the draw, but in our case, from the time we won the case in April 2011, we have battled over 50 scope requests (a number of them very involved and complex) and over half a dozen appeals. On top of that, the annual administrative reviews are turning out to be anything but a “non-event” with more than 70 importers and Chinese producers entering a challenge to the level of duties. While not quite as complex and demanding as the original case, it is not far from it.

What this means is time and money. These cases are very technical and legally complex requiring the expertise of a specialized legal firm which, of course, is not inexpensive.  The time commitment for those involved in the case is significant, often taking several days a week of time--time away from our businesses that are always in need of our focus. In addition, a number of us have travelled to Washington on multiple occasions to meet with staff at Commerce, the ITC and our various members of Congress.

Our learning is that this process, at least in our case, is NOT simply a front-end-loaded two- or three-year project. It is likely a process that will go on for many years to come.

As naive as we were when we started this process, we are no less passionate today than we were in in 2009. We took on this case because we believed the industry was in peril. We believe that today more than ever. 

The AEC has responded by settling in for the long haul by committing an appropriate level of resources and establishing an infrastructure and fund raising process that will allow us to keep fighting to maintain the benefits of this hard-fought win for years to come.

All U.S. extruders and suppliers to extruders need to stand up and be counted.  By banding together, we leveled the playing field.  Now we need to recommit to stay together to keep the field level, the rules enforced and the customers coming. What part are you playing in this fight? Contact the AEC to see how you can help.

For more information on the AEC Fair Trade...It Matters! campaign visit www.AECfairtrade.org.

This post was written by AEC Past Chairman Duncan Crowdis

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