MEXICO SLAPS UNFAIR-TRADE PENALTIES ON US PVC EXPORTS

MEXICO SLAPS UNFAIR-TRADE PENALTIES ON US PVC EXPORTS

The Secretaria de Comercio y Fomento Industrial (Secofi), Mexico's commerce ministry, has imposed final trade penalties on U.S. makers of vinyl polychloride (PVC) and Chinese-made locks.

Publishing their decisions in Monday editions of Diario Oficial, Mexico's federal register, Secofi investigators refused to overturn provisional unfair- trade penalties against the U.S. PVC manufacturers.They wrote that the ministry "concluded that sufficient evidence had not arrived to demonstrate a change in circumstances" and that a continued investigation yielded no reason to revoke or modify earlier decisions.

Consequently, the ministry imposed final trade penalties on three U.S. companies and a general penalty on all PVC product falling under the tariff number 3904.10.01.

Vista Chemical Co. now faces compensatory duties on its exports to Mexico of 12.5 percent, Shintech Inc. 18.9 percent and Occidental Chemical Co. 34.6 percent. All other imports of U.S.-made PVC face duties of 34.6 percent.

The PVC product under investigation is known in technical terms as ''polychloride resin of polyvinyl homopolymer in suspension." It is subject to a 10 percent ad valorem tax in Mexico, but U.S. and Canadian product have an 8 percent tariff under the North American Free Trade Agreement.

Trade penalties against U.S. PVC makers were first imposed on June 5, 1991, and a revision process began on Nov. 12, 1994. The revision process within Secofi ended Monday with the final resolution covering a subsequent investigation between January and June of 1992.

Trade investigators held that Shintech failed to provide sufficient evidence about its pricing methodology. The investigators concluded that most U.S. PVC exports were moving into Mexico with a margin of price discrimination of 34.6 percent.

Secofi investigators Monday also issued a final ruling in a case involving Chinese-made locks that fall under the tariff number 8301.40.01 and are subject to a 20 percent ad valorem tax. U.S. and Canadian companies enjoy a lower 18 percent tariff because of the North American Free Trade Agreement.

Commerce officials closed the books on their investigation by imposing compensatory duties of 236 percent on Chinese locks, noting that price discrimination between July 1992 and June 1993 had "negative effects" on domestic producers and their sales, inventory and capacity to install locks.

The locks under investigation are used in bathroom and bedroom doors, closets and offices, investigators said.

The case was brought in January 1994 by Industrial Cerrajera Yale. Affected exporters were CKA Group Inc., which sent product to its affiliate in Mexico CKA International SA.

The decision is a blow to Chinese lockmakers, who rank along with Taiwan, Malaysia and Japan as the principal global exporters of small locks.