By  on April 16, 2010

WASHINGTON — The International Trade Commission cleared the way Thursday for punitive tariffs to be imposed on plastic retail bags from Vietnam, Indonesia and Taiwan in a trade remedy case that could impact industries such as textiles.

The ITC, in a 5-to-1 vote, ruled that the domestic industry is being injured by imported plastic bags from Vietnam that are sold in the U.S. for less than fair value and subsidized by the Vietnamese government. The panel found that Indonesia and Taiwan sold plastic bags below fair market value, but not that those governments subsidized the product. Goods are considered dumped on the U.S. market when they are illegally subsidized by a foreign government or sold below fair market value.

The plastic bag case is the first in which the U.S. has ruled that Vietnam subsidized a product in violation of U.S. trade remedy laws. Vietnam has traditionally been considered a nonmarket economy and therefore not subject to the same market forces and trade laws as countries with more open systems.

The final stage of the case will be for the Commerce Department to issue duty orders for the bags in the coming weeks that will instruct Customs and Border Protection officials to collect bonds or cash deposits on plastic bags imported from Vietnam, Indonesia and Taiwan.

“This is the first time Commerce has applied the antisubsidy law against Vietnam. In that sense it’s a huge decision,” said David Spooner, a former assistant secretary of Commerce for the Import Administration and former special textile negotiator under President George W. Bush.

The commission’s vote and the resulting duties show a willingness at the ITC and at the Commerce Department to move forward with trade remedy cases against Vietnam, a growing U.S. trading partner that has recently come under greater scrutiny as the two countries begin negotiations to potentially join a multilateral free trade agreement, the Trans-Pacific Partnership. Vietnam is the second-largest textile and apparel supplier to the U.S.

According to the ITC, last year, an estimated $43 million worth of bags were imported from Vietnam, Indonesia shipped an estimated $13.5 million worth and about $19 million worth was imported from Taiwan.

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