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On February 28, 2024, Fiber Industries LLC d/b/a Darling Fibers, Nan Ya Plastics Corporation, America, and Sun Fiber LLC (“Petitioners”) filed a Petition for Global Safeguard Relief Pursuant to Sections 201-202 of the Trade Act of 1974 on imports of Fine Denier Polyester Staple Fiber.

SCOPE OF INVESTIGATION

The imported article covered by this petition is fine denier polyester staple fiber (“fine denier PSF”). The product at issue here is the same product that was subject to the AD/CVD investigation of fine denier PSF from China, India, Korea, and Taiwan that led to the imposition of AD and/or CVD orders against those countries. Fine denier PSF is defined as all polyester staple fiber that is not carded or combed and that measures less than 3.3 decitex (3 denier) in diameter. All fine denier PSF is encompassed by this case regardless of coating (e.g., silicon or oil), color, length, or material inputs (i.e., virgin raw materials or post-consumer recycled inputs).

Excluded from the definition of fine denier PSF is polyester staple fiber measuring 3.3 decitex (3 denier) or greater in diameter. Also excluded is low-melt polyester staple fiber, which is defined as a bi-component fiber with a polyester core and an outer, polyester sheath that melts at a significantly lower temperature than its inner core.

Based on this definition, the imported article is defined as follows:

The imported article covered by this petition is fine denier polyester staple fiber (fine denier PSF), not carded or combed, measuring less than 3.3 decitex (3 denier) in diameter. The scope covers all fine denier PSF, whether coated or uncoated. The following products are excluded from the scope: (1) PSF equal to or greater than 3.3 decitex (more than 3 denier, inclusive) currently classifiable under Harmonized Tariff Schedule of the United States (HTSUS) subheadings 5503.20.0045 and 5503.20.0065. (2) Low-melt PSF defined as a bi-component polyester fiber having a polyester fiber component that melts at a lower temperature than the other polyester fiber component, which is currently classifiable under HTSUS subheading 5503.20.0015. Fine denier PSF is classifiable under the HTSUS subheading 5503.20.0025

PETITIONERS
Fiber Industries LLC d/b/a Darling Fibers, Nan Ya Plastics Corporation, America, and Sun Fiber LLC

COUNSEL FOR PETITIONERS
Paul C. Rosenthal
Kelley Drye & Warren
3050 K Street, NW
Suite 400
Washington, DC 20007

IMPORTS OF SUBJECT MERCHANDISE
For Petitioner’s import data summary, please see Attachment I.

NAMED DOMESTIC PRODUCERS
Named domestic producers other than Petitioners are Fiber Innovations Technologies, Inc., Indorama Ventures Holdings LP (a/k/a Auriga Polymers Inc.), Palmetto Synthetics, LLC, and William Barnet and Son, LLC.

SECTION 201, TRADE ACT OF 1974 (GLOBAL SAFEGUARD INVESTIGATIONS), IMPORT RELIEF FOR DOMESTIC INDUSTRIES
Under section 201, domestic industries seriously injured or threatened with serious injury by increased imports may petition the USITC for import relief. The USITC determines whether an article is being imported in such increased quantities that it is a substantial cause of serious injury, or threat thereof, to the U.S. industry producing an article like or directly competitive with the imported article. If the Commission makes a negative determination, no remedy may be imposed. If the Commission makes an affirmative determination, it recommends to the President relief that would prevent or remedy the injury and facilitate industry adjustment to import competition. The President makes the final decision whether to provide relief and the amount of relief.

Section 201 does not require a finding of an unfair trade practice, as do the antidumping and countervailing duty laws and section 337 of the Tariff Act of 1930. However, the injury requirement under section 201 is considered to be more difficult than those of the unfair trade statutes. Section 201 requires that the injury or threatened injury be “serious” and that the increased imports must be a “substantial cause” (important and not less than any other cause) of the serious injury or threat of serious injury.

Criteria for import relief under section 201 are based on those in article XIX of the GATT, as further defined in the WTO Agreement on Safeguards. Article XIX of the GATT is sometimes referred to as the escape clause because it permits a country to “escape” temporarily from its obligations under the GATT with respect to a particular product when increased imports of that product are causing or are threatening to cause serious injury to domestic producers. Section 201 provides the legal framework under U.S. law for the President to invoke U.S. rights under article XIX.

Duration: The USITC generally must make its injury finding within 120 days (150 days in more complicated cases) of receipt of the petition, request, resolution, or institution on its own motion and must transmit its report to the President, together with any relief recommendations, within 180 days after receipt of the petition, request, resolution, or institution on its own motion.

Finding: If the USITC finding is affirmative, it must recommend a remedy to the President, who determines what relief, if any, will be imposed. Such relief may be in the form of a tariff increase, quantitative restrictions, or orderly marketing agreements.

Actions by Respondents: Respondents, whether foreign producers or importers, must organize their efforts quickly in order to prepare briefs and prepare witnesses for the ITC hearing to argue against an affirmative finding of injury at the ITC.  Respondents also must quickly organize an analysis of the proper remedy to be imposed and determine the most compelling arguments in persuading the President not to impose relief if the ITC ultimately recommends import relief.

CONTACT US

For more information concerning this petition and how it may affect your business, please contact Daniel Wilson, Nithya Nagarajan, Jeffrey Neeley or Stephen Brophy.