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FOR IMMEDIATE RELEASE

SPI URGES CHINESE COMPLIANCE WITH WTO TRADE RULES

WASHINGTON (September 12, 2005) - High tariffs on plastic imports remain a stumbling block for American plastics manufacturers seeking entry into the significant Chinese market, according to comments submitted by the Society of the Plastics Industry, Inc. (SPI) to the United States Trade Representative.

SPI's comments came in response to the Trade Policy Staff Committee's request for comments on China's compliance with its World Trade Organization obligations.

"Although China has implemented many of the tariff cuts it committed to when it joined the WTO, its overall tariff levels remain high," said Karen Tolliver, SPI's senior director for trade and international policy.

Tolliver noted that China currently imposes tariffs of 9.7 percent on most plastics resins, even though it previously agreed to cut tariffs to 6.5 percent. Tariffs on PTFE resin - a major component in the production of cookware and other consumer products - as well other plastics products, such as tubes, pipes, bath items, bags, kitchenware, and construction materials, remain high at 10 percent. Extrusion and blow molding machines enter at a 5 percent tariff rate, and plastic molds at tariffs ranging from 5-10 percent.

"When combined with the 17 percent VAT, U.S. exporters outlay significant funds to gain access to China's market," Tolliver noted. "However, these same plastics products enter the U.S. market at tariff levels no higher than 6.5 percent. Tariffs on imports of machinery and molds are even lower, with most categories entering at 3.1 percent."

SPI also pointed out several other shortcomings in China's compliance with WTO rules, including its undervalued currency, rampant intellectual property rights violations, lack of transparent customs procedures, non-transparent implementation of technical regulations and problematic regulatory system under the Food Hygiene Law.

"China is a critical market for American plastics manufacturers," Tolliver said. "SPI members are generally optimistic about the progress China has made since it joined the WTO in 2001, but there is still great room for improvement."

Founded in 1937, The Society of the Plastics Industry, Inc., is the trade association representing one of the largest manufacturing industries in the United States. SPI's members represent the entire plastics industry supply chain, including processors, machinery and equipment manufacturers and raw materials suppliers. The U.S. plastics industry employs 1.4 million workers and provides nearly $310 billion in annual shipments. For more information, visit SPI on the Web at www.plasticsindustry.org.

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