Asian Firms Held ‘Dumping’ Telephone Gear : U.S. May Slap High Fees on Goods to Raise Prices

The Commerce Department said Thursday that a preliminary investigation showed that manufacturers in Japan, Taiwan and South Korea were “dumping” small-business telephone equipment in the United States at prices far below their fair market value.

In a preliminary finding that could lead to hefty anti-dumping duties on these phone products, the department’s International Trade Administration said equipment prices in Japan were as much as 2 1/2 times higher than the prices being charged in the United States for comparable equipment.

In February, the U.S. International Trade Commission also made a preliminary determination that the three nations’ practices had harmed U.S. manufacturers.

Dumping is a practice in which overseas companies sell their products in other countries at prices near or below cost to force their way into a market. The difference between the average domestic and average foreign prices of a product is called the margin and is expressed as a percent.

Companies found guilty of dumping must pay the margin in the form of duties collected by the U.S. Customs Service to bring the cost of the imported item up to its fair market value.

Duties Held in Escrow

The ITA established the following margins for Japanese companies: Toshiba Corp., 136.77%; Matsushita, 178.93%, and all others, 157.85%.

For Taiwan, the companies and margins were: Taiwan Nitsuko and all others, 129.73%.

For South Korea, they were: Samsung, 9.33%; Goldstar, 6.09%, and all others, 7.79%.

After notice of the ITA finding is published in the Federal Register--in about five days--anti-dumping duties will be levied on the products.

But the duties will be held in escrow pending a final determination by the ITA, which is expected by about Oct. 10, and pending a separate final determination by the International Trade Commission.

The ITC must find that U.S. businesses were injured by the dumping, and a final determination is expected by mid-November, ITC spokesman Jim Craig said.

The U.S. investigation was prompted by a complaint filed in December by American Telephone & Telegraph Co. and Condial Corp.

AT&T; claimed that it and other U.S. phone manufacturers had been injured by unfair pricing practices of 12 manufacturers in the three countries.

Share at 60%

AT&T; spokesman Herb Linnen said the ITA finding “represents major progress on the way to the ultimate result AT&T; seeks--the elimination of unfair pricing in the United States.”

AT&T; said the foreign manufacturers had captured about 60% of the U.S. market for small-business phone systems, growing from about 40% in three years. AT&T; and its U.S. competitors claimed that their business in that area had declined dramatically in the interim.

The ITA said imports of certain small-business phone systems and sub-assemblies from Japan in 1988 were valued at $775.7 million; from Taiwan, $342 million, and from South Korea, $227 million.