The US Department of Commerce launched this month an anti-dumping investigation into Chinese wooden bedroom furniture, whose exports to the United States were worth US$957.9 million in 2002.

But industry experts say the lawsuit does not mean Chinese furniture will be thrown out of the United States.

"One of the reasonable outcomes of the lawsuit might be a ruling against manufacturers of Chinese bedroom furniture, without the imposition of high anti-dumping tariffs," said Hang Guoliang, a lawyer with Beijing-based Guangsheng & Associates.

As a result, Chinese wooden bedroom furniture would still be competitive, in terms of price, in the US market, Hang added.

Guangsheng is representing several Chinese firms at the centre of the dumping accusation filed by US furniture makers.

On January 9, the US International Trade Commission (ITC) ruled Chinese wooden bedroom furniture exported to the US market had injured US furniture manufacturers.Based on the ruling, the US Department of Commerce launched an anti-dumping investigation against Chinese furniture producers.

The ruling came about six months after 30 US-based furniture manufacturers filed a petition that alleged Chinese furniture makers were dumping their bedroom furniture into the US market.

They argued the dumping had eliminated some US-based jobs.

The US manufacturers asked the Department of Commerce to impose tariffs - ranging from 158.74 per cent to 440.96 per cent - on China's furniture producers.

The department's investigation will determine whether Chinese furniture makers have been dumping their products into the US market. The investigation is expected to be completed in early May.

US consumers purchased about US$4.4 billion worth of wooden bedroom furniture in 2002, of which 52 per cent was imported. China was the biggest exporter, selling about US$957.9 million worth of bedroom furniture in the US market in 2002.

The complaint is the largest dumping accusation filed to date against Chinese goods exported to the US market.

Previously, punitive tariffs have been imposed on most Chinese products deemed to have injured US manufacturers and jobs, said Ning Xuanfeng, a lawyer with Beijing-based King & Wood Law Firm.

Things could be different this time. The 135 Chinese enterprises cited in the accusation have been preparing since last July to fight the lawsuit.

Seven industry associations - including the China Furniture Association (CFA), the Guangdong Furniture Association and the Taiwan Furniture Association - have established a committee to deal with the anti-dumping lawsuit.

The committee has collected US$1.5 million to hire lawyers in the United States and China to fight the lawsuit.

Most Chinese enterprises accused of dumping in the past never fought back. Those that did generally lost, either due to lack of financial resources or an inadequate understanding of US laws.

China's Ministry of Commerce has protested against the US decision to investigate the alleged dumping.

"It is true that our exports to the US market have grown rapidly in recent years, and Chinese furniture is sold much cheaper than US products," said CFA Secretary-General Cao Yingchao.

"But it is unreasonable to say Chinese manufacturers are dumping."

In the United States, a product must satisfy three conditions before it is deemed to have been dumped into the market.

Those conditions are: US manufacturers' factual injuries caused by the product; the product's price is lower than its domestic price or cost; and the link between the two.

Many Chinese enterprises are accused of dumping because they receive government subsidies, which, other nations' manufacturers contend, allows them to sell their products for less than cost.

As China has agreed to accept a non-market economy status within 15 years of its World Trade Organization (WTO) membership, production costs of Chinese industries' are not considered a criterion when determining dumping cases.

Under WTO rules, Chinese manufacturers must offer an alternative market economy as the criterion to judge their production costs.

This generally leaves Chinese enterprises at a disadvantage, because it is very hard to find an alternative market economy whose production costs are as low as China's.

Cao said China's furniture industry should not be accused of using government subsidies to dump products, because 90 per cent of the furniture factories are private, foreign-invested ventures.

China's furniture makers have received some good news involving the accusation. A group of US furniture retailers have vowed to fight the lawsuit.

The retailers argue US manufacturers helped create China's furniture industry over the last several decades, as they turned to the country for less expensive labour.

Those same manufacturers are now angry that US retailers are buying directly from China, William Silverman, an attorney for the furniture retailers, told reporters.

Hang said most Chinese bedroom furniture is made from wood imported from the United States.

US consumer groups might also protest against the lawsuit, as high tariffs could substantially increase the price of furniture in the US market, Hang said.

"As a result of our ceaseless efforts, and the negotiations between US retailers, consumers and manufacturers, it is very likely there will be a compromise," Hang said.

"That could mean a slight tariff might be imposed ... The tariff would not be a disastrous blow to Chinese-made furniture in the US market."

(Business Weekly 01/20/2004 page8)