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INDIAN BULK IBUPROFEN ANTIDUMPING PETITION WITHDRAWN

Executive Summary

INDIAN BULK IBUPROFEN ANTIDUMPING PETITION WITHDRAWN by Ethyl Corp. on March 4, one day before a Department of Commerce hearing on allegations that Cheminor Ltd. of India, aided by Indian government subsidies, imported bulk ibuprofen through the U.S. firm Flavine International at prices below fair value in order to gain market share. The petition, filed by Ethyl on July 31, 1991, had asked for countervailing and antidumping duties against Cheminor to counteract alleged underpricing of the bulk analgesic. At an Aug. 21 preliminary conference before the Commerce Department's International Trade Administration, Ethyl said that it had been forced to drop its ibuprofen prices by 22%, resulting in a 57% loss in profitability, in order "to meet market prices and maintain market share" that it alleged was being taken away by the Indian bulk ibuprofen ("The Pink Sheet" Aug. 26, T&G-11). In March 4 letters to ITA and the International Trade Commission, Ethyl counsel Will Leonard, from the Washington D.C. law firm Dorsey and Whitney, stated that "Ethyl's decision to withdraw its petition was made after careful consideration of the representations first made by Cheminor, the Government of India, and CHEMEXCIL [the Basic Chemicals, Pharmaceuticals and Cosmetics Export Promotion Council]" to the effect that Cheminor would cease production of ibuprofen. Cheminor's counsel, Louis Mastriani of the D.C. firm Adduci, Mastriani, Meeks, and Schill, said that Cheminor ceased ibuprofen production in late December after Ethyl won a favorable preliminary countervailing duty determination that required its importer to post bonds equal to 43.7% of the value of all Cheminor ibuprofen. With Ethyl's petition withdrawn, Cheminor is said to be considering reentering the bulk ibuprofen market. The ITA will conduct a public interest assessment to determine if the investigation into Cheminor's U.S. pricing should continue under federal auspices or whether it should be dropped entirely. The results of the public interest assessment should be announced within the week, Commerce said. ITA's and ITC's preliminary findings were in favor of Ethyl. On March 3, Commerce made the preliminary determination that Cheminor was dumping bulk ibuprofen at a margin of 115.94% and required the Customs Department to collect cash deposits or bonds equal to the dumping margin from importers of Cheminor bulk ibuprofen. Cheminor's importers already were required to post bonds to cover the potential cost of the preliminary countervailing duty finding on Dec. 23. Countervailing duties are meant to offset subsidies and other incentives given to foreign manufacturers importing into the U.S. On Sept. 16, ITC made a preliminary determination that Ethyl, which is the only U.S. producer of bulk ibuprofen, is being injured or is threatened with injury by the importation of ibuprofen by Cheminor. Had the case continued, Commerce would have made a final determination on the countervailing and antidumping duties, after which ITC would have to determine if the U.S. industry was being harmed or threatened. Had the preliminary determinations been upheld, Cheminor's importing customers would be required to pay the two duties on the ibuprofen. In a letter to the Commerce Department, Mastriani said that Cheminor had "no objection to the termination of the... investigations" but questioned the reasons given by Ethyl for the withdrawal. Mastriani charged in the letter that "Ethyl elected to withdraw its Petition in view of the strong liklihood that it would be unsuccessful in securing an affirmative finding of injury" from ITC. At the original petition hearing, Mastriani charged that several former customers of Ethyl had told him that they could not obtain FDA approval for Ethyl's bulk ibuprofen since the company began using a new production method. Ethyl denied this allegation, calling it "a non-issue."
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