Puts Delaware County School Supply Company at Competitive Disadvantage

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Today United States Senator Charles E. Schumer called on Secretary of Commerce Gary Locke to consider reopening a Commerce Department review of unfair trade practices by multiple Chinese paper companies. In 2006, the Department of Commerce determined that these companies were engaging in pricing practices considered unfair under international trading rules, and the International Trade Commission determined that unfairly priced imports from these companies were hurting American school supply companies, including MeadWestvaco Corporation, a company with 1000 employees in Delaware County. Originally the Department of Commerce estimated that, to even the playing field, duties of between 76 and 252 percent should be placed on imported paper products from these companies. However, in Commerce's final determination of duty liability, that duty declined to 22.35 percent for several major Chinese producers. This calculation was based in part on information from a corporate annual report submitted to Commerce by one of the Chinese companies - American school paper supply companies have claimed that the report contains falsified information. The claim is currently being evaluated by the U.S. Court of International Trade, but Schumer noted that it may be a long time before a final court ruling is issued, and MeadWestvaco may be damaged in the interim. Because of the potential for harm to this New York company and the 1000 workers in Delaware County, Schumer has asked the Department of Commerce to consider immediately reopening its duty determination proceeding. Schumer was joined on the letter to the Department of Commerce by Senators Robert Casey (D-PA) and Sherrod Brown (D-OH). "Even in times of economic growth and prosperity, we must guard vigilantly against foreign companies tilting the playing field to their advantage - in times of economic tumult, we must redouble our efforts," said Schumer. "It sounds like the Chinese paper companies were trying to pull a fast one, and the Commerce Department should look into these concerns and respond immediately." "We greatly appreciate Senator Schumer's support of MeadWestvaco and its employees in addressing any fraud that took place during this trade investigation," said Neil A. McLachlan, president of MeadWestvaco Corporation's Consumer & Office Products Division. "With the support of Senator Schumer and others, we hope the Commerce Department will quickly investigate this matter and take steps to address any fraud discovered." In 2005, a coalition of American school paper supply companies, including MeadWestvaco Corporation, filed an "antidumping" case on imports of certain lined paper products from China. Antidumping proceedings focus on whether foreign producers are selling their merchandise in the United States at less than fair value. Subsequently, the Commerce Department determined that the Chinese paper companies were in fact dumping, and the International Trade Commission made a final determination that the U.S. industry was being injured by the unfairly priced imports. As a result, in the fall of 2006, the Commerce Department ordered that dumping duties be placed on imports of Chinese lined paper products. The dumping duties initially determined by Commerce ranged from 76 to 252 percent. However, in 2009, after reviewing new data and information provided by one of the Chinese companies, Commerce lowered the duty on several of the Chinese companies to 22.35 percent. In calculating the 22.35 percent final margin, Commerce relied in part on an annual report submitted by a Chinese respondent participating in the review. The U.S. producers allege that the annual report submitted by the Chinese company and its U.S. counsel is fabricated. The 2009 final review results have been appealed to the U.S. Court of International Trade. However, the U.S. producers have said that that they face significant lost sales and serious injury while the appeal is pending, particularly as stores start to stock up on school supplies. Schumer noted that he is concerned that such lost sales could translate into lost jobs for the employees in New York or substantial economic harm for MeadWestvaco. As a result Schumer has asked the Commerce Department to consider the American school paper industry's request to reopen the administrative review proceeding. The full text of the letter is below: May 20, 2009

The Honorable Gary Locke

Secretary of Commerce

U.S. Department of Commerce

14th and Constitution Avenue, NW

Washington, DC 20230 Dear Secretary Locke: We are writing to express our serious concern about possible fraudulent conduct before the Commerce Department that, if true, threatens to undermine the Department's enforcement of the antidumping duty law. The Association of American School Paper Suppliers, a coalition of U.S. producers of lined paper school supplies, has brought to our attention some troubling allegations concerning the recent administrative review of the antidumping duty order on certain lined paper products from China. The final results of that review were published on April 14, 2009. The U.S producers include MeadWestvaco Corporation, which has operations in New York, Ohio and Pennsylvania. Specifically, the U.S. producers informed us that the Chinese respondent and its U.S. counsel submitted a fabricated annual report during the review proceeding, which the Department relied upon in calculating that respondent's antidumping duty margin. According to the U.S. producers, it is readily apparent that the document submitted was not an actual annual report, as claimed by the Chinese respondent. If these allegations are correct, it would appear that the integrity of agency's investigation has indeed been compromised. We understand that the final results have been appealed to the U.S. Court of International Trade. However, the U.S. producers have informed us that they face significant lost sales and serious injury while the appeal is pending, particularly as stores start to stock up on school supplies. We are concerned that such lost sales could translate into lost jobs for the employees in our states or substantial economic harm for these businesses. In light of the allegations of fraudulent conduct, potential imminent injury to the industry, and threat to effective enforcement of our trade remedy laws, we ask that you give full consideration to the Association's request that the Department reopen and reconsider its final results of administrative review. We appreciate your consideration of this important matter. Sincerely,
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