May 18, 2006
The Honorable Carlos M. Gutierrez
Secretary of Commerce
United States Department of Commerce
14th Street and Constitution Avenue, NW
Washington, DC 20230
Dear Secretary Gutierrez:
Last year, many of us wrote to you expressing our support for the Department of Commerce's consideration of a petition related to the composition of Chinese candles, specifically whether Chinese candle producers and U.S. importers are attempting to circumvent the 108.3 percent Antidumping Duty Order imposed on petroleum wax candles from China.
It is our understanding that the Department is prepared to issue a determination by May 23, 2006, on one or two of the petitions filed by the National Candle Association (NCA) in response to the Chinese circumvention. We urge you to proceed in accordance with the Department's precedent with respect to later-developed merchandise anti-circumvention investigations. It concerns us that any change to the precedent would likely result in the weakening of U.S. trade laws, thereby making it difficult for U.S. companies to receive legitimate remedies under the statute.
As you know, the Antidumping Duty Order on petroleum wax candles from the People's Republic of China (PRC) was first issued in 1986. Since then - particularly during the last eight years - circumvention efforts by Chinese producers have more than tripled the number of imported candles that some erroneously allege are not subject to the Order. According to the NCA, the Chinese efforts include the importation of petroleum and palm/vegetable blended wax candles, in which the palm or vegetable wax is purported to be the majority ingredient. If the Chinese continue to circumvent the Order, it will cause irreparable harm to these companies and to domestic candle producers in general.
In our letter to you last year, we expressed our sincere concern that continued circumvention by the Chinese would cause irreparable harm to U.S. candle producers. The International Trade Commission (ITC), in its Second Sunset Review of the Antidumping Duty Order issued in July 2005, agreed with our concerns. The ITC report confirmed that the U.S. industry is suffering injury, and determined "that revocation of the antidumping duty order covering petroleum wax candles from China would likely lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time." In that decision, the ITC clarified the language of its original Determination, and made it clear that it had never intended to exclude mixed wax candles, meaning vegetable wax candles, from the Order, thereby removing the basis for a Determination that mixed wax candles are outside the scope of the Order.
In its July 2005 Review, the ITC also concluded that the number of production and related workers in the U.S. candle industry "declined by 13.5 percent between 1999 and 2004." Even our hard-working and increasingly efficient American candle producers and employees cannot fairly compete with illegal dumping and circumvention by Chinese candle producers.
As you know, the antidumping statute and the Department's regulations provide for anti-circumvention proceedings to include later-developed merchandise within the scope of the Order. These are the procedures that Congress intended to be used. According to the ITC, at the time of the original Candles decision, mixed wax candles comprised of more than 50 percent vegetable wax did not exist in the U.S. market and did not become commercially available until the late 1990s and early 2000s. In the late 1990s and early 2000s, U.S. companies and the Chinese developed new processes and formulas that enabled the production of candles made of 50 percent or more vegetable wax and petroleum wax that looks the same, smells the same, burns the same, performs the same, and is used for the same purposes as today's state-of-the-art candles that are made of 100 percent petroleum wax. Consequently, the ITC in effect concluded that mixed wax candles must be considered later-developed merchandise under the anti-circumvention statute because they were not available in the marketplace in 1986 at the time of the original investigation.
It is important to ensure hard-working American candle producers and employees are able to trade on a level playing field. Therefore, we urge you to proceed in accordance with the Department's precedent, and if it is found that the Order is being circumvented, we urge you to progress in accordance with the law.
Blanche L. Lincoln
Charles E. Schumer
Robert C. Byrd
John D. Rockefeller IV