"The issue is two-fold," Tom Gleason, vice president of Blossburg, Pa.-based Ward Mfg., told PM. "First, the pricing of the Chinese products is ridiculously low. There are certain costs associated to doing business in the United States, such as compliance with environmental laws and worker protection regulations, which China does not have to deal with.
"Second, only the United States and Canada use this type of product, which means that China is making a product specifically for this market."
Ward is one of only two domestic producers of nonmalleable cast-iron pipe fittings; Anvil International of Portsmouth, N.H., is the other. Many of these products are used in the U.S. fire protection market, Gleason said. The market originally had six manufacturers, four of which went out of business, due in part to the cast-iron dumping.
"All we're looking for is a level playing field," said Tom Fish, Anvil's president. "The products being brought in from China are priced at or below the manufacturing costs. Raw materials aren't any cheaper in China than they are here. We believe the Chinese nonmalleable cast-iron fittings producers are being subsidized."
With domestic competitors out of business and their own financial futures in jeopardy, the management at Ward and Anvil decided to take action. With China now a member of the World Trade Organization, it is subject to the same anti-dumping rules that other member-countries are, Gleason noted. As members of the American Pipe Fittings Association, which represents the pipe and steel industry, the two companies submitted the issue and their financial statistics to APFA's legal counsel. After careful review, it was determined that there was a case to present before the ITC.
The ITC began its preliminary investigation in late February of this year. But the ruling is only the first step, said Lake Coulson, director of government relations at the Plumbing-Heating-Cooling Contractors--National Association. The U.S. Department of Commerce will now continue its investigation of the matter and give a preliminary determination in late July. A final decision from the ITC is not expected until February 2003.
Both Gleason and Fish are confident that they will prevail in the case, due in part, said Gleason, to the receptiveness of the Bush administration regarding fair trade. Fish added that the anti-dumping issue of malleable iron is now being evaluated to see if a case can be made there.
"The bottom line is that there has to be fair trade," Gleason explained. "Between Ward and Anvil, we can meet the cast-iron pipe fitting needs of North America. We have to dig in on the dumping issue or we won't have any manufacturing in this country."