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June 8, 2015

International Trade Commission Votes to Continue the Unfair Trade Orders on Imports of Citric Acid and Certain Citrate Salts from Canada and China

WASHINGTON, June 5, 2015 — On May 21, 2015, the U.S. International Trade Commission (“ITC”) voted 6-0 to continue the antidumping duty orders on Citric Acid and Certain Citrate Salts (“CACCS”) from Canada and China and the countervailing duty order on CACCS from China.  This determination was made in the first five-year (“sunset”) review of the orders.  Specifically, the ITC determined that revoking the antidumping duty and countervailing duty orders would be likely to lead to the continuation or recurrence of material injury within a reasonably foreseeable time.  This determination follows a decision by the U.S. Department of Commerce that imports of CACCS from Canada and China would likely be sold at unfair prices, i.e. dumped, if the antidumping orders were revoked, and that imports from China would be unfairly subsidized if the countervailing duty order were revoked.  As a result of these determinations, the orders will be in place for at least five more years, or until 2020.

The orders on CACCS from Canada and China were imposed in 2009 based on a petition filed by Archer Daniels Midland; Cargill, Incorporated; and Tate & Lyle Ingredients America.  The ITC found that from 2006 to 2008, imports from Canada and China increased significantly and undercut the prices of the U.S. producers.  The unfairly low prices of the imports prevented the domestic industry from earning any profits during 2006-2008, even though U.S. demand for citric acid was strong and increasing.  In fact, the domestic industry suffered an operating loss of $40 million during 2006-2008.  As a result, the ITC determined that the domestic industry was materially injured by reason of imports from Canada and China. 

After the orders were imposed, imports from both countries declined, fair pricing levels returned to the U.S. market, and the condition of the domestic industry improved dramatically.  This allowed U.S. producers to resume the capital investments needed to sustain their operations and to ensure U.S. purchasers of continuing supplies of citric acid made in the United States.  In the sunset review, the ITC determined that the injurious state of the industry prior to imposition of the orders would be likely to recur if the orders were revoked.

“We are very appreciative of the hard work of the Commissioners and their staff in gathering and carefully reviewing the extensive evidence  in this review,” stated Joe Dorn, a partner at King & Spalding and lead counsel for the domestic industry.  “We are pleased that the Commission reached a unanimous, affirmative determination.  The evidence was very clear in this case that revocation would lead to increased imports at unfairly low prices.  The continuation of the orders should enable the domestic industry to compete with imports from Canada and China under conditions of fair trade and prevent a recurrence of material injury.”

Antidumping duties and countervailing duties are imposed to ensure that foreign producers do not enjoy an unfair price advantage to the detriment of U.S. firms and U.S. workers.   U.S. importers must pay antidumping duties to offset any unfair price advantage and countervailing duties to offset the benefits of any government subsidies.   These U.S. trade laws are consistent with the rules of the World Trade Organization, which have been agreed to by all 161 members of the WTO.

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