W&WP September 2003

One on One:

AFMA's Fight for Fair Trade

Steve Kincaid, president of the American Furniture Manufacturers Assn., discusses the AFMA's role in the U.S. residential furniture industry's fight against unfair competition.

By Karen M. Koenig

A lot can happen in a year.

It was just last fall that members of the American Furniture Manufacturers Assn. commissioned a study on trade laws to determine whether domestic manufacturers has a strong enough case to pursue trade sanctions against Chinese manufacturers. In July of this year, the answer came back "Yes."

In his statement, Joe Dorn of the law firm King & Spalding, the committee's legal counsel, said, "Our study indicated that there is a strong case to be made that China is illegally dumping bedroom furniture in the U.S. market. We also found substantial data indicating that domestic producers of bedroom furniture have been injured by illegal dumping from China."

Those findings led to the creation of the American Furniture Manufactu-rers Committee for Legal Trade. Although not affiliated with the AFMA, the Committee for Legal Trade is primarily made up of AFMA members, although some of the large bedroom furniture manufacturing members are not participating.

The situation that has led to some division within the AFMA. Although it maintains a neutral stance on this particular issue, the AFMA is actively involved in other methods of leveling the international playing field. This includes lobbying Washington to end China's currency manipulation of pegging the yuan to the dollar.

AFMA President Steve Kincaid discusses the impact these issues are having on the association as well as the steps the AFMA is taking to promote the sales of U.S.-made furniture.

 

Three years ago, the American Furniture Manufacturers Assn. was a proponent of Permanent Normal Trade Relations for China, an event that precluded its admittance into the World Trade Organization. Recently, however, many AFMA members have spoken out against China on charges of "dumping" and unfair currency exchange. What is the AFMA's official stance on China's role in the U.S. furniture market?

First, I would like to clarify your statement about the AFMA's support of China's admittance into the WTO. Our support was based upon their agreement and requirement to adhere to international trade laws. These would include illegal activities such as "dumping" and currency manipulation. AFMA supports free trade among all nations. However, it is imperative that trade also be fair and legal.

 

Are there any instances of foreign furniture trade that AFMA as a group views as being unfair and illegal? If so, what country is involved and what is AFMA doing about it?

The AFMA "as a group" does not view any trade to be illegal. However, based upon a study which the AFMA sponsored, there is a belief by some that there are issues regarding wood furniture from China. We presented these findings to the membership, and it is up to them individually if they wish to pursue the issue.

What kind of "stress" is the antidumping petition putting on the AFMA. Are you concerned that this action by some members could prompt non-participating members to drop out of the association?

My hope is that the antidumping petition does not divide the AFMA or the industry. We all have a lot more in common than this particular issue. If we spend our time and money on those areas, we and the association will be all be in a better industry.

 

AFMA is working with members of Congress on the Congressional Furnishings Caucus which is designed to promote policies beneficial to the domestic home furnishings industry. What are some of the major objectives of the Caucus and how does it plan to achieve them?

The Congressional Furnishings Caucus is designed to educate lawmakers in Washington about legislative and regulatory issues that impact the competitiveness of furniture manufacturers in the U.S. Working through the caucus, we will be able to communicate our views on tax policy, health care, regulation, unfair trade practices, and the need to expand business opportunities for domestic manufactures abroad.

Second, where there is consensus among the members, we will work with the caucus to identify realistic and effective bipartisan solutions. In some cases, this may be as simple as asking caucus members to co-sponsor a legislative proposal that benefits the furniture industry. Currently, we are working on legislation that would bring more competition to the federal procurement process, and in the process create more business opportunities for contract and office furniture manufacturers. In some cases, we may ask the caucus to lobby the Bush Administration on a particular matter that directly affects our members. For example, we're working on a letter from the caucus to the Treasury Secretary John Snow enlisting the Administration's help in pressuring China to re-value its currency.

Just as important, we feel the caucus needs to reflect co-operation from both political parties. We now have 25 bi-partisan members which represent districts where many of our members are located. We believe that the caucus can help promote the long-term interests of the domestic home furnishings industry. We need to make sure the folks on Capitol Hill understand the many challenges our industry faces.

 

When you talk about "bringing more business opportunities to the federal procurement process," are you referring to the preferential treatment given to prison industries?

Yes, we do think that the "preferential treatment" the prison industry receives is not fair. We would like to open the market to all furniture manufacturers.

 

At last year's meeting, the suggestion was made to allow non-U.S. furniture manufacturers into the AFMA. Recently however, AFMA reaffirmed its position as a national organization, limiting itself to members who manufacture in the United States, and turning aside group open membership to offshore producers. What were the prevailing factors that led to this decision? Also, how difficult a decision was this to make in view of the fact that many members do indeed import?

To clarify, it is correct that the AFMA re-affirmed its commitment to domestic manufacturers and to fostering the global leadership of U.S. manufacturers. However, no final decisions were made on membership criteria.

The AFMA bylaws simply require a domestic manufacturing presence. No percentages are evaluated and no specification is made on what needs to be assembled or manufactured here or abroad.

Many of the activities of AFMA impact anyone who markets furniture in the U.S., not just domestic manufacturers. These activities such as regulatory negotiations, consumer product liability developments, press relations, etc. could be of interest to foreign manufacturers. We will continue to explore ways to include these foreign companies within the membership, while maintaining a focus on domestic mission and scope.

The recently announced plan to develop an industry-wide consumer marketing campaign could possibly serve as the correct formant to expand our services.

 

What does the industry-wide consumer marketing campaign entail? What is its goal? Also, how much of a financial commitment has AFMA devoted to the campaign?

We are in the early stages of developing the marketing campaign. A small ad hoc group of the Blue Ribbon Committee from the AFMA is currently studying the overall plan. If we feel that we can develop a "message" which will stimulate the consumer and make home furnishings a higher priority, then we will present the campaign to the industry later. We may be in such a position this year, but it may well be later. If we do embark on such an effort, we would ask for all manufacturers, importers and retailers to join.

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