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FOR IMMEDIATE RELEASE: December 21, 2010

AFTER SCHUMER PUSH, COMMERCE DEPARTMENT REJECTS DOW CORNING'S FOREIGN-TRADE ZONE REQUEST THAT WOULD HAVE COST JOBS AND UNDERMINED BUSINESS AT GLOBE SPECIALTY METALS IN WESTERN NEW YORK

In August, Dow Corning Asked Commerce Department for Special Trade Exemption that Would Have Allowed Company to Avoid Paying Antidumping Duties on Unfairly Priced, Cheap Chinese and Russian Silicon Metal

Exemption Would Have Tilted Playing Field Unfairly Against Globe Specialty Metals -Today, Commerce Department Rejected Dow Corning's Request; Protecting 100 Good Paying Jobs in Niagara Falls

In October, Schumer Urged Commerce Department to Reject Deal

Today, U.S. Senator Charles E. Schumer announced that the Foreign-Trade Zone Board at the Department of Commerce has rejected a foreign-trade subzone request by Dow Corning that would have undermined jobs in Western New York.  In August, Dow asked for an exemption to use silicon metal from China and Russia within a new foreign-trade subzone without payment of dumping duties which would have had a direct and negative impact on a major employer in Niagara Falls, Globe Specialty Metals. In October, Schumer wrote a letter to the Commerce Department urging them to reject Dow Corning’s application, and today they have.

Dumping occurs when a foreign producer sells a product in the United States at a price that is below that producer’s sales price in its home market, or at a price that is lower than the cost of production. The U.S. Department of Commerce instructs U.S. Customs to collect antidumping duties on imports of a product found to be dumped and causing injury to the domestic industry.

“Today’s decision by the Commerce Department is a huge win for jobs in Niagara Falls,” Schumer said. “If this special deal with Dow Corning went through it would have put 100 good paying jobs at risk at a time when we could least afford it. This is a victory not just for the 100 workers at Globe Specialty Metals, but for all the local restaurants, stores and entertainment venues where Globe employees eat and shop.”   

"Globe is very happy that the FTZ Board has taken this action to ensure that FTZs will not be used to circumvent the silicon metal antidumping orders,” Jeff Bradley, CEO of Globe Specialty Metals said. “We are very proud of the investments we've made and jobs we've created in Western New York State.  This decision will allow Globe and our workers to continue to compete with imports on fair terms and will motivate those that do abide by the rules of fair trade, to keep doing so.  We greatly appreciate the important role that Senator Schumer played in seeing that U.S. jobs are not jeopardized by unfair competition."

Dow Corning had applied to the Foreign-Trade Zone Board for permission to use dumped silicon metal within a new foreign-trade subzone without paying any antidumping duties.  Foreign-trade zones are designated sites in the United States licensed by the Foreign-Trade Zones (FTZ) Board at the Department of Commerce where companies can benefit from delayed or reduced customs duties and federal excise taxes, as well as other savings.  Subzones are special-purpose zones, usually at manufacturing plants.  The FTZ Board granted authority for Dow Corning’s subzone status, but rejected Dow Corning’s request for an exemption to use silicon metal from China and Russia without payment of antidumping duties.

The U.S. silicon metal industry has twice been devastated by surges of unfairly low-priced imports.  The dumped imports – first from China in the early 1990’s and then from Russia in the early 2000’s – were sold at prices that undercut domestic producers prices and caused the U.S. market to collapse.  During the second surge of dumped imports, Global Metallurgical in Niagara Falls was forced to shut down and ultimately file for bankruptcy in a process that saw more than three-quarters of the company’s production workers lose their jobs.  After the U.S. Commerce Department imposed antidumping duties on silicon metal imports from Russia, the Niagara Falls plant was able to restart as Globe Specialty Metals.

The duties imposed on dumped imports of silicon metal from China and Russia have been instrumental in Globe Specialty Metals reopening its silicon metal production facility in Niagara Falls. But Globe’s growing domestic silicon metal production business and the economic health of the Niagara Falls region would have been seriously undermined if the FTZ Board had agreed to allow Dow Corning to use unfairly priced silicon metal in the new subzone.

Just last year, Globe Specialty Metals – the largest U.S. producer of silicon metal – reopened its Niagara Falls plant.  Globe’s initial investment of $30 million to renovate and upgrade its shuttered facility was welcome news throughout the region.  The Niagara Falls facility now provides well paying jobs and attractive benefits to about 100 people. Also, the company plans to invest another $35 million in the Niagara Falls facility over the next several years.  The expanded production capacity will create up to another 400 well-paying jobs, providing another major boost to the local economy.  

The economic growth in Niagara Falls since the reopening of Globe’s silicon metal manufacturing facility would have been imperiled if the Foreign-Trade Zone Board permitted Dow Corning to use any amount of dumped silicon metal in the new subzone without payment of antidumping duties.

In October, Schumer asked the FTZ Board and the Department of Commerce to protect the public interest and deny Dow Corning’s special request to undermine domestic silicon metal production.  In his letter, Senator Schumer cited the success of Globe Specialty Metal and made the case that acceding to Dow’s request would threaten the viability of Globe’s Niagara Falls facility.

Today, the Commerce Department through the Foreign-Trade Zone Board announced that they would deny Dow Corning’s request to avoid payment of antidumping duties – a move that will protect 100 well-paying jobs in Niagara Falls and a business, Globe Specialty Metals that has provided an economic shot in the arm to the region.  

 

Schumer’s October letter to the Commerce Department can be seen below:

 

Mr. Andrew McGilvray

Executive Secretary, Foreign-Trade Zones Board

U.S. Department of Commerce

Room 2111

1401 Constitution Avenue, NW

Washington, DC 20230

 

Dear Mr. McGilvray,

I write to express concern about a pending FTZ subzone application (Foreign-Trade Zone 29; Docket 20-2009) that would allow unfairly traded silicon metal from China and Russia to escape payment of antidumping duties.  Given the recent reopening of a silicon metal production facility in Niagara Falls, New York, I am concerned that creating a new FTZ subzone with access to dumped silicon metal without payment of antidumping duties would have a significant negative economic impact on the region and on local jobs. 

The Board has broad authority to impose restrictions to protect the public interest.  I respectfully request that you exercise that authority and not permit the applicant to use any dumped silicon metal within the new subzone without paying antidumping duties.

Just last year, Globe Specialty Metals – the largest U.S. producer of silicon metal – reopened its Niagara Falls plant.  Globe’s initial investment of $30 million to renovate and upgrade its shuttered facility was welcome news in a region hit hard by the economic downturn.  The Niagara Falls facility now provides well paying jobs and attractive benefits to about 100 people.  It is my understanding that the company plans to invest another $35 million in the Niagara Falls facility over the next several years.  The expanded production capacity will create up to another 400 good paying jobs, providing another major boost to the local economy.  

The duties imposed on dumped imports of silicon metal from China and Russia have been instrumental in Globe Specialty Metals reopening its silicon metal production facility in Niagara Falls, New York.  But Globe’s growing domestic silicon metal production business and the economic health of the Niagara Falls region would be seriously undermined if the FTZ Board agrees to allow use of unfairly priced silicon metal in the new subzone. 

The FTZ Board staff found that access to even a limited amount of silicon metal without payment of dumping duties would decrease the average price of silicon metal paid by the applicant which, in turn, would result in a decline in the U.S. price of silicon metal.  “[This] weakening of the U.S. price of silicon metal could threaten the viability of [Globe’s Niagara Falls] facility, as well as the continuation of production at other domestic facilities.”  I agree and respectfully urge you to accept the staff’s preliminary recommendation to prohibit admission of any amount of dumped silicon metal into this subzone without payment of antidumping duties.

Sincerely,

 

Charles E. Schumer

United States Senator

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