Chinese Honey not Dumped per se

2011
01.15

Quick Summary – Chinese honey was found to be not dumped, but was causing ‘material injury to an industry in the United States’.

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I’ve heard it dozens of times “Dumped Chinese Honey” and went to the root of the report.  I’ve pulled the US International Trade Commission report of 2007 & 2009 that reviews the existing tariff on Chinese and Argentine Honey.  I just want US Beekeepers to understand the political landscape this caused, and the artificial honey prices they are enjoying.

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What the US ITC is:
“The mission of the Commission is to (1) administer U.S. trade remedy laws within its mandate in a fair and objective manner; (2) provide the President, USTR, and Congress with independent analysis, information, and support on matters of tariffs, international trade, and U.S. competitiveness; and (3) maintain the Harmonized Tariff Schedule of the United States (HTS).”

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I interpret this Commission to be a non-independent, fact finding commission that is subject to political influences from Congress.

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The 2007 report itself is 92 pages and remarkably easy to read considering. Found at:
http://www.usitc.gov/publications/701_731/pub3929.pdf

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And the 2009 report is http://www.usitc.gov/publications/701_731/pub3369.pdf
Chinese Dirty Dealings.
The American Honey Producers Assc. and the Sioux Honey Assc. filed the original complaint in 2000. On the initial investigation half the board found China was dumping, half found they weren’t. (See footnote 3)

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‘Anti-dumping duty order’ is what is needed to impose a tariff, if I understand the process. It does not mean the item was dumped.

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‘Dumping’ is a nebulous word. I believe the public thinks ‘dumping’ means selling for less then you make it for, which of course make little economic sense. In this case, there was a 1995 US-Chinese agreement of selling above a pre-determined reference price point. Specifically:

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“It also provided that these imports had to be sold at a reference price, which was 92
percent of the average of the honey unit import values for all other countries during a specified six-month
period.”

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If I interpret all this in context, the US honey packers could not compete with its two largest competitors and successfully lobbied for a tariff.  They only targeted the two largest competitors to the US.  If I extrapolate, if that tariff ever comes down, they have done little to make themselves competitive again.

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As a good economist, I interpret that the current honey price is artificial, thus not reflective of the true free market price in an open world economy.

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No other country has leveled a protectionist tariff on Chinese honey. The EU did temporarily ban it on a quality issue. The US tariff is $2.63/kg on Chinese honey.

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And to head off the other side of the coin, Chinese honey quality is not at issue here. That is a different item.

One Response to “Chinese Honey not Dumped per se”

  1. chuckarama says:

    I couldn’t agree more with you Mr Taylor. I am a fierce believer in the free market myself. I read in all the major honey journals about how we MUST unite and enforce anti-dumping laws and tariffs, all the time. I disagree.

    A tariff MAY be valid if the home country is subsidizing, ie dumping tax money into the industry, giving it an unfair advantage. If that truly is the case, and there is not proof it is, what do we care if the Chinese people subsidize our honey purchases. Aren’t we always telling people how good honey is for them and wishing they would consume more? Cheap honey will do that. That kind of subsidy is never sustainable in the long run anyways. And you will never find it for sale in your local farmers markets etc either. That niche will be reserved still for the local producer.

    If in the short run, competition will drive some beekeepers out of business, the cost of pollination will increase, drawing in new beekeepers and easing the pollination costs again. So the pollination industry isn’t at real risk either, in the long run; there would be short term pressure on the pollination market, because it has already been artificially interfered with by this tarif and hasn’t been allowed to make those adjustments yet. Those that will be effected are individuals who can’t find a way to make their business competitive enough to survive. This is sad reality, but necessary in both life and capitalistic competition. And the hobbiest beekeeper won’t really be effected, as they typically aren’t in it for the same reasons as the professional keeper and packager.

    Now honey quality, as you’ve noted is another issue. Varroa came from Asia. Nosema Ceranae likewise comes from Asia. I have seen speculation that the new iridovirus may have come from Asia as well, but there is of course no proof of it yet. If honey is imported with another devastating disease and left out where a hive can discover it (and they will) then that would obviously be a terrible thing. Or if Chinese honey had harmful concentrations of chemicals or substances, that is not desirable either. But that is just a general food safety issue not unique to honey, but any imported food and hygiene products.

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