Apparel Industry Alert - Antidumping and Countervailing Duty Case Filed Against Woven Ribbon from China

On July 9, 2009, an antidumping and countervailing duty petition was filed against imports of Narrow Woven Ribbons with Woven Selvedge from China.  This case represents the first trade remedy investigation against imports of Chinese textile products since the quota regime ended on December 31, 2008.  Ribbon imports from Taiwan were also named in the investigation.  The case was filed by petitioners Berwick Offray LLC and its wholly-owned subsidiary, Lion Ribbon Company.

The dollar value of the imports is relatively small.  In 2008, imports of narrow woven ribbons from China were $16 million, and were $25 million from Taiwan.  However, the remedy requested is significant. The petitioners are seeking duties of over 200% on imports from China and over 135% on imports from Taiwan.   

In the complaint, the petitioners reference the lifting of apparel and textile quotas as a significant factor in filing the case. “It is remarkable that in only a little over a year, the combined imports from China and Taiwan have grown from 329,478 kilograms in first quarter 2008 to 578,428 in first quarter 2009 …. The lifting of the quota on Chinese imports beginning January 2009 is expected to allow imports of the subject ribbons from China to continue to increase rapidly at unfair prices.”  

The ITC is scheduled to issue its preliminary injury determination in this case by August 24, 2009.  That decision will be important, as it will represent the first time the ITC will be called upon to address the end of the textile and apparel quotas.  Depending on how the ITC decides, this could send a signal to other potential U.S apparel producers about their chances of success in future Chinese apparel petitions.

This petition is also significant because it contains several allegations that the Chinese government has provided unfair subsidies to the textile and apparel industry.  If the Commerce Department accepts these allegations and finds that unfair subsidies have been provided, such findings will make it easier for the U.S. apparel industry to file and win future countervailing duty cases against Chinese apparel imports.

In prior alerts, we have described the steps that companies can take to prepare for potential trade remedy petitions and the benefits that such preparation can have.  If you have any questions about this most recent petition, or if you would like to obtain a copy of our prior alerts about steps that companies can take to prepare for these cases, please feel free to contact Eric Emerson or Tom Trendl.