Forget all the high-minded rhetoric about “fair trade” and “level playing fields.” Discount the apple-pie claims that the antidumping law protects good American companies and their hard-working employees from unscrupulous, predatory, foreign cheaters. Those are just some of the myths that have sustained the costly antidumping status quo for decades.
If the American public were familiar with all of the sordid details of the antidumping case concerning wooden bedroom furniture from China (which I called a Poster Child for Reform back in 2004), they would be angry and ready to change the law. Well, on Tuesday, the Wall Street Journal did its part by running a story about how U.S. producers of wooden bedroom furniture have been extorting cash from their Chinese competition in exchange for dropping pursuit of even higher antidumping duty rates at the Commerce Department.
The Journal reported that about $13 million was paid to a group of 20 U.S. furniture makers between 2006 through 2009, and that a much larger, but unspecified, amount of money went to pay the U.S. firms’ lawyers.
Surprisingly, this practice is not illegal. Charlotte Lane, one of six commissioners at the U.S. International Trade Commission, which presides over antidumping investigations and sunset reviews, said, “I cannot figure out for the life of me how they are legal.” And her colleague, Commissioner Dan Pearson added that these settlements create “additional costs and distortions” in furniture trade, “with little evidence that these distortions have yielded any benefits to the industry overall, the U.S. consumer, or the U.S. taxpayer.”
But this practice is nothing new. It’s been going on in the shadows for several years in other cases as well. Bill Silverman, a trade lawyer who represents furniture retailers and importers, offered: “Everybody in the industry in the U.S. and China understands that these payments are clever shakedowns.” Back in 2006, I wrote about similar “shakedowns” with hundreds of exporters from several countries in the shrimp antidumping cases (toward the end of the paper under the subheading, “A Sign of Things to Come?”)