FPA Opposes Anti-Dumping and Countervailing Duties on Aluminum Foil from China Petition

The Flexible Packaging Association (“FPA”) was pleased to review a comprehensive report by the U.S. International Trade Commission (“ITC”) into claims that dumped and subsidized aluminum foil from China is causing or threatening injury to the domestic aluminum foil industry. The report follows the March 9, 2017 filing of an unfair trade complaint by the Aluminum Association Trade Enforcement Working Group and its members JW Aluminum Company, Novelis North America, and Reynolds Consumer Products (the “petitioners”). The complaint seeks steep import duties exceeding 140% to be applied to imported Chinese aluminum foil. While sharing many of the goals of the petitioners to encourage American manufacturing, the FPA U.S. Aluminum Foil Converters Committee opposes this petition.

Aluminum foil is a critical input needed by the $30 billion U.S. flexible packaging industry to create innovative and functional packaging for consumer goods such as food, beverages, candy and pharmaceuticals. The case covers both standard household aluminum foil as well as specialty ultra-thin aluminum foil that is not available in the United States. The case is important to FPA’s U.S. Aluminum Foil Converters Committee, which is fighting to retain manufacturing jobs in the United States. “If this case results in restrictions on the supply of aluminum foil, including ultra-thin foil, these jobs will be at risk of relocation overseas,” stated FPA’s President and CEO, Alison Keane, Esq. “The impact of this case will shift large numbers of jobs overseas with no benefit to the U.S. aluminum foil industry.”

FPA’s legal defense committee provided numerous witnesses for the ITC’s preliminary hearing who testified that no harm could come to the American aluminum foil industry from imports of aluminum foil from China. The witnesses explained that Chinese aluminum foil differs from domestically produced foil, especially in the thin and ultra-thin gauges because the American producers do not focus on this market segment. In the case of ultra-thin foil, they simply do not make it at all in the quantities and high-quality product demanded by the flexible packaging industry.

The ITC’s 163-page report made many key findings that supported FPA’s position that Chinese aluminum foil is not having any injurious impact on the domestic aluminum foil industry, including:

• U.S. aluminum foil selling prices were not kept down by Chinese imports (“we cannot conclude that subject imports depressed the prices of the domestic like product to a significant degree due to the linkage between aluminum foil prices and raw material costs.”).
• U.S. aluminum foil producers were not prevented from raising prices by Chinese imports (“We consequently do not find that subject imports prevented price increases which otherwise would have occurred to a significant degree.”).
• Domestic ultra-thin foil production “may be limited or nonexistent.”
• Domestic flexible packaging manufacturers may deserve standing as domestic producers in this case as converters of aluminum foil.
• Despite their arguments about economic harm by imports, domestic aluminum foil manufacturing jobs declined by only 137 workers from 2014-2016. To put this number in perspective: domestic flexible packaging manufacturing jobs are estimated at 80,000. The negative impact on American jobs of cutting off the supply of Chinese aluminum foil for flexible packaging production will far outweigh any job benefits that are envisioned by the petitioners filing this case.

FPA’s U.S. Aluminum Foil Converters Committee intends to vigorously defend its members for the duration of this legal proceeding. The Committee has engaged the Washington, D.C. law firm Mowry & Grimson, PLLC to coordinate its industry legal defense.

While ready for the long fight, Keane noted that there may be ways to find common ground with the domestic foil manufacturers: “We share the same goal of the domestic aluminum foil producers who want more American jobs. We should find ways to work together to improve our country’s competitiveness. Everybody loses in unfair trade cases, especially the American consumer. The ITC’s preliminary findings make clear that this case is not going to result in any benefit to the aluminum foil producers,” said Keane.

Source: Flexible Packaging Association.