WASHINGTON, D.C.—U.S. Sens. Sherrod Brown (D-OH) and Rob Portman (R-OH) today urged the U.S. Commerce Department to enforce trade law in an upcoming decision that could help defend manufacturing jobs at Diamond Products in Elyria from unfair foreign competition.

“It’s a simple equation: when we fight against unfair foreign trade practices, Ohio workers and business can compete with anyone. Trade enforcement helps defend Ohio jobs,” said Brown, whose bipartisan legislation, the Currency Exchange Rate Oversight Reform Act of 2011, passed the Senate earlier this fall. “The Commerce Department must do its part to enforce trade laws when American jobs are at stake due to unfair trade practices carried out by foreign nations. Its upcoming decision on diamond saw blades will make the difference for hundreds of workers in Elyria.”

“Ohio companies and workers need to be treated fairly in the global economy and should not be subjected to illegal competition from a Chinese state-owned enterprise,” said Portman, who initiated the first-ever legal case to be litigated and won against China before the World Trade Organization because of China's unfair treatment of U.S.-made auto parts.  “I hope, as the Commerce Department reviews the case, that they look closely at the Chinese company’s ownership structure to ensure Diamond is not subjected to an uneven playing field. We need to stand vigilant against what seems to be a concerted effort by Chinese diamond saw blade manufacturers to evade trade and customs rules,” said Portman.

The Commerce Department is currently considering recalculating antidumping duties for a Chinese diamond saw blade company whose imports are in direct competition with those made by Diamond Products, a company that employs approximately 300 workers in Elyria. An original determination by the Department found that the Chinese company, Beijing Gang Yan Diamond Products (“BGY”), was not government-owned and thereby not subject to the strictest duties. In a letter sent today to Commerce Secretary John Bryson, Brown and Portman argued that the company is closely connected to the Chinese government, and should therefore be subject to the same duty rate as other Chinese-owned saw blade companies.

“BGY is one the largest Chinese manufacturers of diamond saw blades and is believed by the U.S industry to be one of the most disruptive participants in the United States market,” the senators wrote to Bryson. “Our antidumping duty laws state that if a company is subject to control by a government, it may not be treated as though it were a wholly private enterprise. We urge the Department to reconsider its earlier decision […] and to thereby ensure that U.S. producers like Diamond Products are not forced into direct competition with the Chinese government.”

A recent ruling by the U.S. Court of International Trade found that the Commerce Department’s investigation failed to consider the ownership structure of Beijing Gan Yang.  The Court found that the company’s largest shareholder is a “state-owned enterprise that is wholly owned and controlled” by a Chinese government agency.  As a result, Commerce is now reconsidering their ruling.

Today’s letter and the effort to ensure fair competition for Diamond Products in Elyria follows the successful actions taken by both Brown and Portman in September against another large Chinese diamond saw blade manufacturer that attempted to evade the dumping duties on Chinese diamond saw blades.

The letter to the Commerce Department is below.

 

The Honorable John E. Bryson

Secretary of Commerce

U.S. Department of Commerce

 

Dear Secretary Bryson:

 

We are writing to express our interest in the Department of Commerce’s reconsideration of the antidumping duty margin calculated for a specific company with close ties to the Chinese government in the investigation covering diamond saw blade imports from China.  This issue has a big impact on jobs in our state including the 300 Ohio workers at Diamond Products in Elyria, Ohio. 

 

On November 4, 2009, the Department issued an antidumping duty order subjecting imports of saw blades produced or exported by Beijing Gang Yan Diamond Products (“BGY”) and its affiliates to duties of 2.82 percent. The duties applied to other companies, by contrast, was as high as 164.09 percent.

 

We understand that the Department’s calculations were influenced by its determination that BGY was not subject to control by the Chinese government. At the same time, the record of the Department’s investigation showed that BGY’s parent company had close ties to the Chinese government. Further, employees of government entities sat on the parent company’s board and controlled its actions.  We understand that the U.S. Court of International Trade subsequently found that the majority shareholder of BGY is a “state-owned enterprise that is wholly owned and controlled by a Chinese government agency.”

 

We also understand that the current reconsideration was occasioned by the Court’s finding that the Department’s failure to consider questions of ultimate ownership undermined the reasonableness of its decision. 

 

It is our understanding that in antidumping investigations involving China that there is a legal presumption that all Chinese companies are subject to government control, unless there is a preponderance of the evidence to the contrary. 

 

BGY is one the largest Chinese manufacturers of diamond saw blades and is believed by the U.S industry to be one of the most disruptive participants in the United States market.  Our antidumping duty laws state that if a company is subject to control by a government, it may not be treated as though it were a wholly private enterprise. We urge the Department to reconsider its earlier decision and to find that BGY has not overcome the presumption of government control and to thereby ensure that U.S. producers like Diamond Products are not forced into direct competition with the Chinese government. 

 

Thank you for your consideration of this matter.

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