The Chinese Anti-Dumping Investigation: An Update Presented by Doug Bassett Spokesman for Committee For Legal Trade and V-P of Sales at Vaughan-Bassett Furniture Company

What is Dumping? Selling a product below cost in another country Dumping that causes injury to a domestic industry (injurious dumping) is an ILLEGAL trade practice, condemned by the W.T.O. and its 147 member nations. China and the U.S. are members of the W.T.O. Both China and the U.S. impose anti-dumping duties against illegally traded product

Proving Dumping Against China China is a NON-MARKET ECONOMY – a fact recognized by the U.S., the W.T.O. and China China does not play by the rules of fair trade In non-market economies, actual costs and prices are not used in determining dumping We do NOT have to prove China’s costs Surrogate countries (market economy countries at a similar level of development) are used. In our case, INDIA was the surrogate country.

4 Elements of An Anti-Dumping Investigation 1. Sufficient Industry Support: (WON) 2. Injury: 35,000 wood furniture jobs lost since 2000, which is 29% of U.S. workforce 3. Causation: China shipped $430 million in 2000 China shipped $1.4 billion in 2003 – a 221% increase 4. Dumping: Commerce ruled that China IS DUMPING

Preliminary Dumping Ruling Lacquer Craft4.9% Shing Mark6.6% Dongguan Lung Dong7.0% Markor8.4% Tech Lane9.4% Rui Feng19.2% Starcorp24.3% All Others Rate:10.9% China-Wide Rate:198%

What Happens Now? Oct. 31, 2003: Petition Filed Dec. 10, 2003:Commerce grants standing and formally initiates investigation Jan. 9, 2004: I.T.C. issues preliminary ruling of evidence of injury and causation June 18, 2004:Commerce issues preliminary ruling that China is guilty of dumping Nov. 5, 2004:Final Commerce Ruling on Dumping Dec. 20, 2004:Final I.T.C. Ruling on Injury and Causation

What Will The Final Duties Be? These are HALF-TIME RESULTS. The results are based on the Honor System. None of China’s responses have been VERIFIED. All 7 Chinese companies have FAILED to provide Commerce with info requested. Commerce has viewed data in light most favorable to Chinese. THEREFORE, FINAL DUTIES WILL LIKELY CHANGE…..

What Does This Mean To YOU? China IS CHEATING What would the death of American furniture manufacturing mean to you? Over 500 Furniture Suppliers Attended a Forum in Greensboro last August. Most companies gave between $ $10,000 to our legal defense fund. Our legal bills will run over $1.5 million…