June 30, 1999

The Department of Commerce will initiate a dumping investigation of apple juice concentrate imports from China. A complaint was filed June 7 by the U.S. apple industry. The International Trade Commission also conducted a preliminary hearing at which members of the apple industry presented evidence of economic injury from the Chinese imports.

It's a move unlikely to endear U.S. agriculture to the Chinese, who have been on chilly terms with U.S. negotiators over trade issues involving China's accession to the World Trade Organization. The Yugoslavia involvement, the bombing of the Chinese embassy in Belgrade and U.S. officials' sharing of details on agreements made between U.S. and Chinese negotiators earlier this year angered China.

Kraig R. Naasz of the U.S. Apple Association told the ITC hearing the case "is critically important to our entire industry." He asked for a favorable consideration of the dumping complaint. The complaint alleges that china is selling apple juice concentrate in the United States at prices 91% less than its cost of production, economically injuring the U.S. apple industry as a result.

"Prices of dumped concentrate from China have fallen by about half, even as import volumes and import market share have registered astounding increases," said Tom Hurson of Tree Top, Inc. "At the same time, our financial bottom line, which was previously a fairly good one, has suffered dramatically."

Concentrate imports from China increased 1,200% between 1995 and 1998 during which time prices for Chinese concentrate declined by more than 50%. Prices for U.S. concentrate declined 50% as a result.

"I would have to say that one of my biggest mistakes was Coloma's decision to invest in a concentrator three years ago," said Alton Wendzel of Coloma Frozen Foods. "Unfortunately, I made this decision just before imports of apple juice concentrate from china began to explode. Because of these imports, our concentrator is currently operating at but a small fraction of its capacity."

If Commerce finds that concentrate is being sold at unfairly low prices, and the ITC rules that imports are causing economic injury to U.S. producers, additional tariffs will be levied against Chinese concentrate imports. The ITC must rule by July 22, and Commerce is required to announce a preliminary dumping decision in October.