As many folks know, besides blogging and trying to keep up with my day job, I'm also active with the Alliance for Free Choice and Jobs in Flooring. The Alliance was formed to oppose a petition made to the U.S. government by eight (now seven) U.S. flooring manufacturers requesting stiff punitive duties be placed on imports of Chinese engineered flooring. That group alleged the imports are heavily subsidized by the state and unfairly traded in the U.S. at artificially low prices. After extensive investigation for over six months, the DOC has yet to find any evidence of significant dumping or subsidies. Final rulings on both the possible future duty rates-but more importantly, if the order should actually be formalized or not-will come this later this fall.
Since this blog is focused on green issues, not specifically on such trade issues, I'm not going to discuss in detail the Alliance's perspective on this issue. And just so you can get both viewpoints, here's the petitioner's website, www.usfloorparity.org as well, right up front. Please review both to learn more about the case.
I share this background because last week I wrote about the current ITC antidumping case and how some people feel that it's an appropriate means to "punish" Chinese manufacturers for their "sins" against the environment. I responded by noting first that I didn't think that many of the international exporters were sinning and none were sinning at the level that some individuals would believe, and that second, the ITC was not the appropriate system for either discussing or correcting the possible problems in the "greenness" of Chinese manufacturing.
My third point in response is that if only for the sake of argument, we hypothesize that Chinese companies may have committed some of the evils that conventional wisdom automatically attributes to them, then what happens if the ITC case results in Chinese flooring imports being barred from the U.S. market?
From personal experience, I know that removing the foreign influence is not going to solve the problem; in fact, it will only make it worse. It is often only through continued international pressure, in the form of education and technology exchange, that things will get better there.
American buyers insist on improved monitoring to ensure the legal sourcing wood of wood. American consumers insist on better air quality and floors made with low-VOC glues and finishes. The international market insists on better treatment of workers from the factories that produce our products. All of us together are demanding higher quality production that lasts longer, performs better and, not coincidentally, is less harmful to the environment.
We are voting with our dollars: voting for factories that meet our standards; voting against factories that do not. We provide training and information to help them meet those standards, which most candidate factories in China embrace willingly because they come to realize it's good business to be green. If U.S. importers are forced to pull out of the China market, it will be a long time before the domestic Chinese market (which is far greater in size than ours) puts the same environmental pressure on their suppliers.
If the ITC rules in favor of the petition this fall, many excellent and environmentally sensitive American companies will be compelled to withdraw from China. (That won't be based on the actual duty rate-high or low rates don't really matter. It's because the way the U.S. trade remedy system works is that it doesn't just put duties on the imports coming in today. It also imposes the burden of retroactive liability on the importer -- potentially for up to 30 years-so while they might import a container in December 2011, they only find out what the actual duty rate is sometime after April 2013.)
The Chinese manufacturers aren't going to go out of business. They'll turn inward to service their immense and growing domestic market and they will export to countries other than the U.S.-countries that maybe are not as concerned about environmental standards and workplace conditions. When that happens, they will be without any international pressure to source legally or produce in an environmentally friendly way. Yes, many of the Chinese companies will continue to work hard to be good environmental stewards, but others may simply work towards the greatest profit or at a minimum, stop asking questions.
They say that change is best effected from within. We need to be part of the process, not standing apart from it. I make several trips to China a year to work with our QC teams and our factories on our sourcing programs, teaching them how to backtrack supply for legality and sustainability. Rather than purchase from a factory solely because it is FSC-certified, we instead chose to bring our long-term partners into the FSC program, providing financial support for certification and training in the systems. We monitor every shipment for production standards that range from meeting CARB certification requirements (even though we don't sell into California!) to ensuring that the finish shipped in container No. 1 matches the color in container No. 100.
Our close relationships with the workers in these factories have given them a new perspective on the Western world. We show them great respect and often insist that line workers are involved in quality control discussions and product development issues. Hopefully with more financial power, these people will be in the position to demand-and support-a better lifestyle for them and their families. Only with broader economic growth are we going to see a better China. Effective embargoes like the one proposed in this pending petition will only increase the poverty level and create hostility towards the West. Doesn't it make more sense to make friends rather than enemies?
Our own Chinese staff in China benefits from continuing education programs and opportunities to travel internationally with us. We also provide scholarships for Chinese forestry students, hopefully helping the next Chinese generation be a better environmental stewards. Yes, a lot of this is based on hope, but it takes time to see the change--all of these things are like ripples in the pond-we take small actions and hope they spread. I've seen it happen. It's a slow process, but after 20 years, I know it works.
The China I work in today is not at all the same as the one I visited two decades ago. The changes are nearly beyond comprehension. And I know for a fact that many of those changes came from companies like Metro building programs there. As Western companies put their feet through the door, we force that door open wider and wider and many other things sneak in with us, like environmental standards. There is no question in my mind that the Western business investments in China have resulted in changes far beyond products purchased.
We live in an increasingly small and interlinked world. What happens in one country impacts us all, and we need to work to build a better world together. We need to open borders to new ideas and information. Walls restrict growth.
So that is the third reason why I reject the argument that dumping duties are somehow going to teach China an environmental lesson. Only by our increased presence in the market there (and all around the world) will we have any influence in improving these standards and conditions. Force out the American buyer and you lose your opportunity to have any say on conditions there.
