Canada Releases Statement about Chinese Curtainwall Dumping Investigation, Says Allegations Appear "Reasonable and Well-Supported"
August 1, 2012

by Penny Stacey, pstacey@glass.com

The Canada Border Services Agency (CBSA) has released its "Statement of Reasons" into its recent decision to investigate alleged injurious dumping and subsidizing of certain unitized wall modules originating in or exported from China. The CBSA reports in the statement that the complaint it received from a number of Canada-based curtainwall manufacturers "disclosed a reasonable indication that the dumping and subsidizing has caused injury and is threatening to cause injury to the Canadian industry producing these goods."

"The CBSA finds the complainants' allegations of reduced profitability to be reasonable and well supported," writes the agency. "The reduced profitability has been reasonably linked to the allegedly dumped and subsidized imports … The CBSA finds the complainants' allegations of loss of market share to be reasonable and well-supported. The loss of market share has been reasonably linked to the allegedly dumped and subsidized imports."

The original complaint, filed in May, alleges "that the dumping and subsidizing of these goods are harming Canadian production by causing the following: lost sales, price erosion, price suppression, reduced profitability, loss of market share, reduced employment and underutilization of capacity."

According to CBSA, it has identified 80 potential exporters and producers of certain unitized wall modules over the period of January 1, 2009, to March 31, 2012, from information provided by the complainants, along with 17 potential importers.

In addition, the government agency points out that an investigation is only warranted in such a case when those in support of the complaint "account for a major proportion of domestic production of like goods." In this case, officials say they found that the complaint "is supported by domestic producers, who represent more than 50 percent of the total production by those domestic producers expressing an opinion, and who represent more than 25 percent of unitized wall modules production in Canada."

While CBSA officials say detailed information regarding imports and domestic production cannot be divulged due to confidentiality, the agency says it estimates that in 2009, China made up 13 percent of the curtainwall imports in Canada, growing to 38 percent in 2010, 50 percent in 2011, and 22 percent for the first quarter of 2012. The agency further alleges that "the estimated volume of dumped goods is not negligible," and the estimated margin of dumping is not insignificant. The Statement suggests that for the period of January 1, 2010, to March 31, 2012, 41 percent of the total curtainwall imports from China into Canada could be considered "dumped goods."

With regard to the complaint's allegations regarding the Chinese government's subsidization of its curtainwall industry, CBSA officials say they will research the allegations, but have eliminated nine subsidy programs that were listed in the complaint, as they "were found to be not relevant because none of the exporters of subject goods identified for this complaint were located in the regions that would allow them to qualify for these programs." Four other programs also were eliminated from the investigation, with the CBSA noting that they appear to be duplicates of other programs listed.

The CBSA further writes that it finds the complaints allegations of reduced employment and underutilization of capacity related to the dumping and subsidization claims to be reasonable and well-supported, and that "the injury to the Canadian producers has steadily increased from 2009 to 2011, and that there is a reasonable indication that the alleged dumping and subsidizing is threatening to cause injury."

According to the report, if a final determination of dumping and/or subsidizing is made, the Canadian International Trade Tribunal (CITT) will hold public hearings into the question of material injury to the Canadian industry. "In the event of an injury finding by the [CITT], imports of subject goods released by the CBSA after that date will be subject to [an] anti-dumping equal to the applicable margin of dumping and countervailing duty equal to the amount of subsidy on the imported goods," writes the CBSA. "Should both anti-dumping and countervailing duties be applicable to subject goods, the amount of any anti-dumping duty may be reduced by the amount of subsidy that is attributable to an export subsidy."

Likewise, the CITT may also impose a retroactive duty "on subject good imported into Canada and released by the CBSA during the period of 90 days preceding the day of the CBSA making a preliminary determination of dumping and/or subsidizing."

The investigation is expected to be completed in the fall.