US PET market saved?

A frequent complaint by various sectors is that the NTC takes so long in determining and implementing anti-dumping duties that businesses have closed down while waiting for the verdict. In contrast, countries like the US are highlighted as ones whose government bodies are trigger happy in imposing anti-dumping duties and protecting local industry.

Such was the case with Pakistan’s polyethylene terephthalate (PET) exports. US’s total PET market is about $3-4 billion whereas its imports account for about $1 billion. Pakistan has a humble share of roughly $64 million of its total polymer resin imports. While US accounts for over 40 percent of Pakistan’s PET exports, they accounted only 6.4 percent of the total US import pie and an insignificant 2 percent of US’s estimated production.

Thus it seemed hard luck to have anti-dumping duties imposed on so trivial an amount which also happens to be one of the few value-added chemical exports of the country. Surprisingly, the Unites States International Trade Commission (USITC) appears to agree.

Recall that 44 to 60 percent tariffs were imposed on Pakistan’s PET exports, along with a score of other countries including Taiwan, Brazil, Indonesia, and South Korea (read “PET: looking towards greener pastures”, published on October 5, 2018).

However, a ruling last week by USITC determined that PET resin imports from these countries has not caused material damage or threatened injury to US’s domestic production. This ruling comes contrary to US Department of Commerce’s decision that PET resin was being sold at unfairly low prices and was in quantities significant enough to adversely impact local production.

As per US’s anti-dumping rules, it’s the USITC that is the final ruling body that issues directives regarding anti-dumping orders. If the USITC does not deem material injury by Pakistan’s imports than PET exports to US, which have tripled over the last eight years, may continue their positive trends.

With domestic market growing at double digits, anti-dumping duties removed from Canada and EU, and now continued access to the US market, Pakistan’s PET resin sector has a rosy outlook.