August 13, 2012

Contractors file complaint over alleged dumping

A group of Canadian glazing and building envelope contractors have filed a complaint with the federal government to investigate the alleged dumping of unitized wall units by Chinese exporters, which they claim is harming the domestic industry.

The Canadian Border Services Agency (CBSA) recently reported there is “evidence that unitized wall modules originating in or exported from China have been dumped and subsidized.”

More importantly, the report said “there is a reasonable indication that such dumping and subsidizing has caused or is threatening to cause injury to the Canadian industry.”

Canadian companies, which represent more than 25 per cent of the domestic production of unitized wall modules, have launched a complaint with the CBSA.

As a result, the agency is conducting an investigation to determine whether these goods were dumped or subsidized between Jan. 1, 2010 and June 30, 2012.

For the investigation, the subject goods are defined as: “Unitized wall modules, with or without infill, including fully assembled frames, with or without fasteners, trims, cover caps, window operators, gaskets, load transfer bars, sunshades and anchor assemblies.”

The companies who initiated the CBSA investigation are: Starline Architectural Windows Ltd. of Langley, B.C.; Inland Glass & Aluminum Ltd. of Kamloops, B.C.; Toro Aluminum of Concord, Ontario; Allan Window Technologies of Concord, Ontario; Ferguson Neudorf Glass Inc. of Beamsville, Ontario; Flynn Canada Ltd. of Mississauga, Ontario; Oldcastle Building Envelope of Concord, Ontario and Sota Glazing Inc. of Brampton, Ontario.

A similar good covered by the complaint is the aluminum framed and engineered window, which is designed to be installed in a building.

This product can be used to form the building envelope or facade for multi-storey buildings, which is often referred to as curtain wall or window wall.

Unitized wall modules are designed to interlock with each other. They are assembled at a production facility and shipped to site for installation.

The CBSA has identified 80 potential exporters and producers of these wall modules from information provided by the Canadian companies, as well as CBSA import documentation. In addition, 17 potential importers of unitized wall modules were also identified.

The domestic industry and the Chinese exporters sell unitized wall modules in Canada through the same channels of distribution to both general contractors and owners of building projects.

The countries that export unitized wall units to Canada are China, Germany, Korea and the US.

The CBSA produced the following estimates of the import share of the Canadian market by value in 2011: China (50 per cent); Korea (1 per cent); Germany (7 per cent); the US (40 per cent) and other countries (7 per cent).

According to the agency, dumping occurs when goods are sold to importers in Canada at prices that are less than their selling prices in the exporter’s domestic market or at unprofitable prices.

Subsidizing occurs when goods imported into Canada benefit from foreign government financial assistance.

The Canadian companies alleged the dumping and subsidizing of unitized wall units by China are harming domestic production through the loss of sales, price erosion, price suppression, reduced profitability, loss of market share, reduced employment and underutilization of capacity.

The Special Import Measures Act protects Canadian producers from the damaging effects of unfair trade.

The Canadian International Trade Tribunal has started a preliminary inquiry to determine whether the imports are harming Canadian producers and will issue a decision by Sept. 14, 2012.

The CBSA will make a preliminary decision by Oct. 15, 2012.

If it is determined that China is practicing unfair trading practices, the investigations will be continued for the purpose of making a final decision within 90 days.

However, if the CBSA’s investigations reveal imports have not been dumped or subsidized, the investigations will instead be terminated.

Duties to counteract dumping and subsidizing are normally only applied to goods released on or after the date of the CBSA’s preliminary determination(s).

But, an anti-dumping or countervailing duty can be applied retroactively, if the Tribunal determines an unusually large increase in harmful imports has occurred prior to the CBSA’s decision.

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