U.S. Trade Panel to Pursue Minivan ‘Dumping’ Charges

The U.S. International Trade Commission voted Wednesday to pursue charges by the Big Three U.S. auto makers that their Japanese rivals are “dumping” minivans in the United States.

Citing the recent incursion of Japanese-built minivans in the U.S. market at the expense of those built by domestic auto makers, the ITC issued a preliminary ruling that there are reasonable grounds to believe that unfair pricing by the Japanese is damaging the Big Three.

The next step is for the Commerce Department to determine whether illegal dumping has actually occurred. U.S. laws define dumping as the importation of products at prices below those charged in the home market or below production costs. If the Commerce Department finds that dumping has occurred, the Big Three must then prove to the ITC that their sales and profits in the minivan segment were damaged by the Japanese practice.

If the Japanese are found guilty, the United States can slap tariffs on imports of their minivans. Commissioner Donald Newquist said he based his decision partly on comparing the weak performance of the domestic minivan producers to the strength of the Japanese during the first quarter of 1991.

“Production, capacity utilization, producers’ shipments, production related jobs, sales, and operating income--all declined nearly 20%, often much more,” Newquist said.

At the same time, he said, the Japanese more than doubled their share of the U.S. minivan market over the same quarter in 1990.

The Motor Vehicle Manufacturers Assn., a trade group for the Big Three, applauded the ITC decision.

“By any standard economic indicator, the industry was suffering injury, and these companies were convinced that these unfair trade practices were causing the injury,” said Thomas H. Hanna, president of the group.

But Mazda and Toyota, the main targets of the Big Three’s complaint, noted that the ruling was only the first of four stages in the investigation.

“Mazda is disappointed that the commission has voted to continue the investigation,” the company said in a statement. “It was reached on a highly expedited timetable without time for a complete review of all the facts. As the investigation proceeds and these facts become fully known, we are confident that our position will be vindicated.”

Mazda and Toyota, which through May had 6.6% and 6.4% of the market respectively, have contended that the domestic auto makers’ control over 86% or the market belies their claims of being hurt by the Japanese.