Maine materials producer accuses Belarus of ‘dumping’ in U.S. market

Auburn Manufacturing President and CEO Kathie Leonard stands in her manufacturing center in Auburn on Oct. 7. Leonard says a company at least partially owned by the president of Belarus is dumping flame-resistant silica fabric on the U.S. market, undercutting her prices.

The top of a Maine firm that manufactures flame-resistant materials says her agency’s merchandise are being undercut by the “dumping” of comparable merchandise made by a Belarusian firm believed to be not less than partially owned by the controversial ruler of that nation.

Kathie Leonard, president and CEO of Auburn Manufacturing Inc., mentioned the dumping – promoting merchandise within the U.S. at a really low worth, generally beneath the price of manufacturing, to seize market share from home firms – is hurting her firm as she tries to cope with the enterprise impression of the coronavirus pandemic. It additionally comes simply after Auburn Manufacturing efficiently fought off dumping of the identical merchandise by China.

The flame- and heat-resistant materials, made with silica, are used for fireplace prevention and insulation. Leonard mentioned they’re typically used to wrap pipes on ships, changing asbestos insulation, and in addition for defense in welding operations, to assist forestall fires from sparks, significantly in small areas.

Auburn Manufacturing was based in 1979 and for years it ran easily, creating new merchandise and reaching new markets. Its merchandise have been authorised to be used by the navy, Leonard mentioned, which helped gasoline its development, together with gross sales to industrial prospects and even a number of merchandise for house use.

When China was equally dumping its silica materials within the U.S. in 2016, Leonard mentioned, Auburn Manufacturing misplaced about 30 % of its gross sales. She was capable of rent legal professionals and argue her case to authorities officers, and the U.S. in the end imposed excessive commerce duties on the Chinese language imports, leveling the taking part in discipline for home producers.

Difficult an alleged case of product dumping is a time-consuming and costly course of, mentioned Douglas Heffner, a lawyer at Drinker Biddle & Reath in Washington, D.C., and one of many legal professionals who labored for Auburn Manufacturing within the China case.

He mentioned petitions alleging dumping should be filed with two authorities businesses: the U.S. Division of Commerce and the Worldwide Commerce Fee. The ITC determines whether or not a U.S. firm or firms have been harmed by imports, after which the commerce division determines whether or not that damage was the results of dumping and places a greenback determine on the harm. Then the commerce division can impose duties to attempt to degree the taking part in discipline, Heffner mentioned.

Like China, Belarus has a state-controlled economic system, and Heffner mentioned he would “be completely stunned” if dumping wasn’t happening. The federal government in state-controlled economies is extra involved with problems with employment than with earnings and losses, and it’ll generally enable dumping to make sure its firms proceed to function, even when they’re not creating wealth.

Weaver Dan Langlois units up a loom at Auburn Manufacturing. The corporate misplaced about 30 % of its gross sales when China was dumping its silica materials within the U.S. in 2016, mentioned CEO and President Kathie Leonard. Shawn Patrick Ouellette/Employees Photographer

“They most likely have enormous losses and the federal government is bailing them out,” Heffner mentioned, “however it’s exhausting to police.”

It was shortly after the China case was settled and Auburn Manufacturing started to recuperate its gross sales, Leonard mentioned, that Belarus started dumping its merchandise on the U.S. market.

She mentioned the silica materials being dumped available on the market come from an organization referred to as JFC Polotsk-Steklovlokno, which she believes is owned not less than partially by Alexander Lukashenko, the president of Belarus. Belarus, as soon as a part of the Soviet Union, additionally provides silica materials to the Russian navy, she mentioned.

JFC didn’t reply to a number of requests for remark despatched by way of e-mail this week.

The U.S. had imposed sanctions on Lukashenko and Belarus as a result of elections there had been delayed, however the sanctions have been lifted in 2017 after an election was held the yr earlier than. Observers have questioned the validity of the outcomes of that election, which Lukashenko received with 84 % of the vote, and protests towards him flared inside and out of doors of Belarus this summer season.

On Monday, the European Union voted to impose new financial sanctions on Lukashenko, though they received’t take impact instantly, and his opposition in Belarus is asking for nationwide strikes if he doesn’t resign.

Lukashenko has been described as “Europe’s final dictator.” In the course of the protests, he took to strolling round armed with an assault rifle.

Leonard mentioned it’s exhausting to quantify the gross sales worth of the Belarusian silica cloth – as a result of it sometimes goes via a number of distributors earlier than being offered to the top purchaser – and its impression on her firm. She mentioned the pandemic additionally has impacted her enterprise, hurting gross sales, and it may be exhausting to determine how a lot to attribute to the alleged Belarusian dumping and the way a lot to the pandemic.

Leonard mentioned she’s managed to maintain her 50 staff on the job regardless of the pandemic, though two shifts have been consolidated into one.

She’s additionally unsure how to reply to the dumping, as a result of she discovered from the China incident how troublesome it’s to press her case to the federal government. She has but to achieve out to Maine’s congressional delegation however mentioned she hopes getting her story out via the information media will assist elevate consciousness and presumably result in authorities intervention.

“I don’t have the urge for food or the wherewithal (to pursue a case), and that’s why I’m pissed off,” Leonard mentioned.

Some former prospects have advised her the Belarusian merchandise are inferior to these made by Auburn Manufacturing, Leonard mentioned, they usually have inquired about doing enterprise once more.

“However while you inform them what the value is, they are saying, ‘that’s loads,’ ” she mentioned.

However, Leonard mentioned, not less than there’s a place to begin for opening negotiations to attempt to win again the enterprise.

“It’s coming again, however it’s gradual and uneven,” and troublesome to cope with in the midst of a pandemic, she mentioned.

Dumping impacts some Maine companies, however typically solely on an “intermittent” foundation, mentioned Wade Merritt, president of the Maine Worldwide Commerce Middle. He mentioned dumping often entails merchandise made by massive industrial producers, similar to metal, chemical substances or plastics, and that Maine has few of these industries.

Maine-farmed salmon producers complained about unfair competitors from Canada within the Nineteen Nineties, Merritt mentioned, they usually have been profitable in getting duties imposed. However an identical dispute over potatoes from Canada ended unsuccessfully within the 198os, he mentioned.

“It’s not a difficulty we cope with loads,” he mentioned, however “for individuals who are concerned in it, it’s a really crucial difficulty.”

Merritt additionally mentioned he’s conscious of the issue of pursuing a case involving allegations of dumping.

“It positively takes quite a lot of willpower” however can have a huge impact if profitable, he mentioned.

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