Alliance Says Coalition Seeking 'Loophole'

Houston, TX, April 14, 2011 -- The Alliance for Free Choice and Jobs in Flooring has responded to allegations of "targeted dumping" in the ongoing dispute over whether Chinese engineered hardwood flooring is being dumped in the U.S.

The Coalition for American Hardwood Parity said that Zhejiang Layo Industry Co., the Samling Group, and Zhejiang Yuhua Timber Co. are guilty of targeted dumping and said documentation provided by those companies in the Department of Commerce investigation backs the coalition's charge.

Jonathan Train, president of the alliance, said that while his group had not seen the specifics of the coalition's accusations, he noted in a press release on his group's website that some things are clear.

Train said the allegation of "targeted dumping" is being used as "a backdoor loophole" to permit the Department of Commerce to use the discredited “zeroing” methodology, noting that several World Trade Organization rulings have declared the U.S. practice of “zeroing” to be illegal.

He noted that “zeroing” is the previous methodology the Commerce Department used that does not give a foreign company credit for non-dumped sales in their dumping calculation and instead “zeros” out non-dumped sales.

Under this practice, Commerce calculates the margin of dumping based only on the dumped sales, excluding “non-dumped sales” from its averages. Thus, if a Chinese company on an individual transaction is calculated to have a negative 10% dumping margin and another individual transaction a positive 10% dumping margin, the average dumping margin is not 0 but 5%.

Commerce, in effect, zeroes out the negative dumping margin. “Zeroing," Train said, artificially and inaccurately increases the dumping margin. Which is why the WTO has declared the practice to be illegal.

Train said that in attempts to evade the WTO’s direct prohibition on “zeroing,” petitioners in new antidumping cases have started to allege what they call “targeted dumping.”

Targeted dumping means that an exporter is accused of not dumping to all of their customers or not during all time periods, but is instead practicing limited or “targeted” dumping to a specific region in the U.S., a specific time period, or specific customers.

If the DOC agrees with the allegations, it can use a methodology of comparing a calculated cost of production for the Chinese companies to prices for individual sales transactions without giving Chinese companies credit for negative dumping margins. This “zeroing” out those non-dumped sales has the effect of inflating the antidumping margin.

"The playing field in U.S. antidumping and countervailing duty investigations is already substantially and unfairly tilted in favor of petitioners," Train said.

"The rules already in place massively favor the petitioner. But not content with their existing home court advantage, now the CAHP wants to by-pass those rules and benefit from a practice that has been forbidden by the WTO."

More information regarding this case is available at www.afcjf.com.