New AD/CVD Petitions: Paper Shopping Bags

Table of Contents

On May 31, 2023, the Coalition for Fair Trade in Shopping Bags, consisting primarily of Novolex Holdings (“Novolex”) and the union workers at the U.S. paper shopping bag manufacturing facilities, filed antidumping (AD) and countervailing duty (CVD) petitions against Paper Shopping Bags from nine countries. China is the largest exporter of the subject shopping bags, followed by Vietnam and India. Although the other named countries have import volumes that are quite small, it appears that some of these countries were included in these petitions because of the potential that Chinese producers might shift their production to these countries.

It was probably just a matter of time before this case was filed. The main petitioner in this case, Novolex, previously had filed multiple AD cases on imported plastic shopping bags (polyethylene retail carrier bags); first from China, Malaysia, and Thailand, followed by another round of AD petitions on plastic bags from Indonesia, Taiwan, and Vietnam. Novolex also produces paper bags and now once again seeks to use U.S. trade laws to try to protect yet another of its products from import competition.

The AD duties on plastic bags may have helped keep unfair plastic bag imports out of the U.S. market. But these AD duties could not revive market demand for plastic bags as state laws banning plastic bags helped permanently shift consumer preference from plastic to paper bags. Now some states and cities are starting to ban or impose taxes on single-use paper shopping bags. Although AD/CVD duties certainly will increase the cost of paper shopping bags, it is uncertain whether those duties will do anything to stop that trend towards using fewer paper shopping bags.

The U.S. Department of Commerce (“DOC”) and U.S. International Trade Commission (“ITC”) will conduct investigations to further examine the allegations made in the petition. DOC will investigate whether the named subject imports are being sold to the United States at less than fair value (“dumping”) or benefit from unfair government subsidies. ITC will investigate whether the subject imports are causing “material injury” or “threat of material injury” to the domestic industry. Both agencies have to make affirmative findings of injury or threat of injury (ITC) or of dumping or subsidies (DOC) in order for AD/CVD duties to be imposed on the subject imports.

Scope

The proposed scope definition of this case

Paper shopping bags with handles of any type, regardless of whether there is any printing, regardless of how the top edges are finished (e.g., folded, serrated, or otherwise), and regardless of whether the tops can be sealed. Subject paper shopping bags have a width of at least 4.5 inches and depth of at least 2.5 inches.

Excluded from the scope are:

Multiwall sacks and bags;
Paper sacks or bags that are of a 1/6 or 1/7 barrel size (i.e., 11.5-12.5 inches in width, 6.5-7.5inches in depth, and 13.5-17.5 inches in height) with flat paper handles;
Paper sacks or bags with die-cut handles, a standard basis paper weight of less than 38 pounds, and a height of less than 11.5 inches;
Shopping bags (i) with non-paper handles made wholly of woven ribbon or other similar woven fabric and (ii) that are finished with folded tops or for which tied knots or t-bar aglets (made of wood, metal, or plastic) are used to secure the handles to the bags; and
Gift bags marked for retail sale that are physically bundled into the saleable unit prior to importation such that each bundled unit is composed of no less than three individual bags and no more than 30 individual bags.

The paper shopping bags are classified under US Harmonized Tariff Schedule (HTS) subheadings 4819.30.0040 and 4819.40.0040. The HTS subheadings are provided for convenience and customs purposes, while the written descriptions of the scope definitions are dispositive.

See the full proposed scope definition (here).