New AD/CVD Petitions: Paper Shopping Bags from Cambodia, China, Colombia, India, Malaysia, Portugal, Taiwan, Turkey, and Vietnam

Home | China Law Blog | New AD/CVD Petitions: Paper Shopping Bags from Cambodia, China, Colombia, India, Malaysia, Portugal, Taiwan, Turkey, and Vietnam

Adams Lee

On May 31, 2023, the Coalition for Fair Trade in Shopping Bags, consisting primarily of Novolex Holdings ("Novolex") and the union workers at the U.S. paper shopping bag manufacturing facilities, filed antidumping (AD) and countervailing duty (CVD) petitions against Paper Shopping Bags from nine countries. China is the largest exporter of the subject shopping bags, followed by Vietnam and India. Although the other named countries have import volumes that are quite small, it appears that some of these countries were included in these petitions because of the potential that Chinese producers might shift their production to these countries.

It was probably just a matter of time before this case was filed. The main petitioner in this case, Novolex, previously had filed multiple AD cases on imported plastic shopping bags (polyethylene retail carrier bags); first from China, Malaysia, and Thailand, followed by another round of AD petitions on plastic bags from Indonesia, Taiwan, and Vietnam. Novolex also produces paper bags and now once again seeks to use U.S. trade laws to try to protect yet another of its products from import competition.

The AD duties on plastic bags may have helped keep unfair plastic bag imports out of the U.S. market. But these AD duties could not revive market demand for plastic bags as state laws banning plastic bags helped permanently shift consumer preference from plastic to paper bags. Now some states and cities are starting to ban or impose taxes on single-use paper shopping bags. Although AD/CVD duties certainly will increase the cost of paper shopping bags, it is uncertain whether those duties will do anything to stop that trend towards using fewer paper shopping bags.

The U.S. Department of Commerce ("DOC") and U.S. International Trade Commission ("ITC") will conduct investigations to further examine the allegations made in the petition. DOC will investigate whether the named subject imports are being sold to the United States at less than fair value ("dumping") or benefit from unfair government subsidies. ITC will investigate whether the subject imports are causing "material injury" or "threat of material injury" to the domestic industry. Both agencies have to make affirmative findings of injury or threat of injury (ITC) or of dumping or subsidies (DOC) in order for AD/CVD duties to be imposed on the subject imports.

Scope

The proposed scope definition of this case

Paper shopping bags with handles of any type, regardless of whether there is any printing, regardless of how the top edges are finished (e.g., folded, serrated, or otherwise), and regardless of whether the tops can be sealed. Subject paper shopping bags have a width of at least 4.5 inches and depth of at least 2.5 inches.

Excluded from the scope are:

The paper shopping bags are classified under US Harmonized Tariff Schedule (HTS) subheadings 4819.30.0040 and 4819.40.0040. The HTS subheadings are provided for convenience and customs purposes, while the written descriptions of the scope definitions are dispositive.

See the full proposed scope definition (here).

Alleged AD/CVD Margins.

Petitioner calculated estimated dumping margins for the name countries:

Cambodia: 44.29% – 221.36%

China: 133.80% – 324.24%

Colombia: 65.04%

India- 88.56%

Malaysia: 173.38%

Portugal: 26.71% – 204.54%

Taiwan: 44.76% – 50.13%

Turkey: 12.51% – 45.29%

Vietnam: 63.67% – 128.81

Petitioner did not provide any specific Chinese or Indian subsidy margin calculations.

Named Exporters/ Producers

Petitioner included a list of companies that it believes are producers and exporters of the subject merchandise. See attached list here.

Named U.S. Importers

Petitioner included a list of companies that it believes are U.S. importers of the subject merchandise. See attached list here.

Estimated Schedule of Investigations.

May 31, 2023 – Petitions filed

June 20, 2023 – DOC initiates investigation

June 26, 2023 – ITC Staff Conference

July 17, 2023 – ITC preliminary determination

October 28, 2023 – DOC CVD preliminary determination (assuming extended deadline) (8/24/23 – unextended)

December 27, 2023 – DOC AD preliminary determination (assuming extended deadline)

(11/7/23 – unextended)

May 10, 2024 – DOC final determination (extended)

June 24, 2024 – ITC final determination (extended)

July 1, 2024 – DOC AD/CVD orders issued (extended)

Adams Lee

Adams Lee has more than twenty years’ experience providing strategic advice and legal guidance on complex international trade and administrative regulatory matters to US and foreign companies, trade associations, and foreign governments. He advises companies in a broad range of industries on international trade remedy and trade policy issues.Adams brings a wealth of knowledge to Harris Bricken's international trade practice. He is adept at quickly evaluating strategic options and developing the best comprehensive legal approach in light of relevant policy and case law. Beyond achieving significant DOC and ITC results that improve his clients’ competitive position, Adams helps them understand complex trade issues so they can make well-informed business decisions.

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