Vienna, VA. — The U.S. Apple Association (USApple) is calling on the U.S. Commerce Department and the International Trade Commission to extend for five years the import duties currently in place as part of the antidumping order on non-frozen apple juice concentrate from China. Elimination of the antidumping order, and the associated duties, will encourage more Chinese apple juice concentrate to enter the U.S. market, causing prices to decline and harming the few remaining apple juice concentrate producers still operating in the United States. The loss of domestic concentrate producers would also force juice apple prices lower and put an even greater economic strain on America's apple growers.

While some Chinese firms export apple juice concentrate to the United States either duty-free or with minimal duties, other Chinese firms are assessed antidumping duties as high as 52 percent. These higher rates discourage a segment of the Chinese apple juice concentrate industry from entering the U.S. market.

"The antidumping margins in place have been successful in stabilizing the U.S. apple juice concentrate market and shutting some Chinese exporters out of the U.S. market," noted USApple President and CEO Nancy Foster. "But without this protection, these firms would be free to enter the U.S. market and compete in a predatory, low-price manner for market share. Because apple juice concentrate is a commodity, lowering prices is the only tool available to differentiate product and gain market share. Removing the antidumping duties would encourage firms to offer product in the U.S. market at unfair prices, leading to the collapse of the concentrate market."

There are four clear indicators that suggest the removal of the antidumping order would pose a significant and imminent threat to the domestic apple juice concentrate market: China's increasing production capacity; lack of juice demand in China; trade barriers in other markets; and previous antidumping behavior. Because of these factors, it is virtually assured that the removal of the order will result in the Chinese exporters again offering concentrate at less than fair prices.

Chinese concentrate firms continue to add capacity to their existing production base. Since the United States is one of the largest concentrate markets in the world, there is ever increasing incentive to export to the United States.

In addition, while China's production capacity is increasing, its domestic consumption is low — forcing Chinese apple juice concentrate producers to export.

Revocation of the antidumping order would make the United States an even more attractive market since other nations will continue to impose duties on Chinese concentrate. The European Union imposes a 25.5 percent tariff on apple juice concentrate and Canada has a tariff of 8.5 percent. With no tariffs, in the U.S. market, Chinese product may flow from these markets into the United States in an effort to maximize profitability by avoiding the Canadian and EU duties.

Finally, the Chinese concentrate producers have already demonstrated their willingness to engage in dumping behavior. In the mid- to late-1990s, Chinese producers utilized a predatory, low-price strategy to capture a substantial share of the U.S. market. Because of the significant increase in Chinese apple juice concentrate imports, six American apple juice concentrate firms have either gone out of business or closed plants. Removal of the dumping order would cause prices to drop further and endanger the economic viability of the few remaining domestic producers. "We strongly urge the U.S. government to continue the antidumping order and the associated duties on imported Chinese apple juice concentrate," concluded Foster. "If the order is lifted, the unlimited apple juice concentrate imports from China and falling prices could well result in the extinction of the U.S. domestic apple juice concentrate industry."

The loss of domestic apple juice concentrate producers would have an impact on the entire U.S. apple industry. The industry expects the loss of a market for a portion of the U.S. apple crop if concentrate producers cut back or stop production, but even if they continue to produce concentrate, the lower end prices for concentrate would reduce the amount processors could pay growers for their apples.

Note: The text of this release can be downloaded from the News Releases section of USApple's Media Web site, at http://www.usapple.org/media/newsreleases/index.cfm.

The U.S. Apple Association (USApple) is the national trade association representing all segments of the apple industry. Members include state and regional apple associations representing the 7,500 apple growers throughout the country, as well as more than 400 individual firms involved in the apple business. USApple's mission is to provide the means for all segments of the U.S. apple industry to join in appropriate collective efforts to profitably produce and market apples and apple products.