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International Trade Policy and European Industry pp 255–297Cite as

Orientation on Origin Rules: A Digression on Discrimination

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Part of the book series: Contributions to Economics ((CE))

Abstract

The purpose of origin rules is to achieve the effectiveness of trade policy measures. In their allocation of production, companies take them into account. The origin rule for television sets intended to safeguard the effect of quantitative restrictions (QRs). After the elimination of residual QRs, the origin rules became a nuisance resulting in serious damage to European industry eventually causing its demise. They represent serious barriers to international trade, are highly discriminatory and are in conflict with international agreements. They have also provoked fraud and anti-fraud cases, which may be attributable to bad intentions, as well as a deficient rule. The history of origin rules comprises examples in which they served company trade policy objectives, creating additional, although preferential, trade. The cases are explained.

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Notes

  1. 1.

    “Report on the Accession of Japan” adopted by an ad hoc Committee on agenda and inter-sessional business on 13 February 1953 (GATT, L/76). Also quoted in Chap. 2.

  2. 2.

    Vermulst (1994) states: “In low-cost countries such as South Korea, Thailand, Malaysia, Hong Kong, and China, assembly costs are in most cases far below the percentages assumed for the EC industry, and origin therefore effectively depends, at least for televisions, on the origin of the picture tube, which can easily represent 35 per cent of the ex-works price.” And in a footnote: “Color picture tubes are produced in a limited number of countries only, such as Japan, Korea, the European Community, Malaysia, and China.” In 1994, when Vermulst’s book was published the list of countries was more numerous than the author assumed. Brazil (three producers), Indonesia (two producers), India (four producers), Lithuania (one producer), Mexico (three producers), Singapore (two producers), Thailand (two producers), the USA (seven producers) and Vietnam (one producer) should have been added to the list. Consequently, the choice and possible confusion concerning possible origin were greater than suggested. Besides, the percentages are not so different and, in any case, European television sets may also have non-European origin, if their content consists mainly of imported tubes. See the adventures of Mr. Grundig in Austria.

  3. 3.

    Article 40 of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code (OJ L 253, 11.10.1993, p. 1): ‘value’ means the customs value at the time of import of the non-originating materials used.

  4. 4.

    Articles 44 and 46 of Decision No 1/95 of the EC-Turkey Association Council of 22 December 1995 on implementing the final phase of the Customs Union, OJ No. L 35, 13/02/1996, pp. 1–47, allowing measures other than free circulation in case of ‘acquis communautaire’ has not been accomplished by Turkey.

  5. 5.

    Council Regulation (EC) No 1531/2002 of 14 August 2002 imposing a definitive anti-dumping duty on imports of colour television receivers originating in the People’s Republic of China, the Republic of Korea, Malaysia and Thailand and terminating the proceeding regarding imports of colour television receivers originating in Singapore, Official Journal, L 231, 29/08/2002, pp. 1–28, recital 34.

  6. 6.

    Commission Regulation (EC) No 2376/94 of 27 September 1994, provisional CTV, Official Journal L 255, 01/10/1994, pp. 50–69, recital (2) (CTV Asia 1).

  7. 7.

    Commission Regulation (EC) No 2376/94 of 27 September 1994, recital (25).

  8. 8.

    Global Trade Information Services, Inc. (GTI) from the statistical services of the countries concerned.

  9. 9.

    The previous Chapter shows how the European Commission accepted inexistent Hong Kong origin as the correct origin and maltreated its own anti-dumping legislation and practice.

  10. 10.

    USITC: Color Picture Tubes from Canada, Japan, Korea, and Singapore Investigations Nos. 731-TA-367-370 (Review) determinations and views of the European Commission (USITC Publication No. 3291, APRIL 2000): Hitachi Electronic Devices (Singapore) Pte., Ltd. (“Hitachi Singapore”) ceased CPT production in Singapore in 1996, leaving Sony Singapore as the only producer in Singapore.

  11. 11.

    Council Regulation (EC) No 2584/98 of 27 November 1998 amending Regulation (EC) No 710/95 (CTV Asia 2).

  12. 12.

    Council Regulation (EC) No 2584/98 of 27 November 1998 amending Regulation (EC) No 710/95 OJ L 324, 02/12/1998, pp. 1–13 (CTV Asia 2) had as investigation period from 1 January 1994 to 31 March 1995. The publication of Regulation 2584/98 was more than 3 years after the notice of the opening of the review investigation. In the meantime, the European Commission could have noticed the discontinuation of production in Singapore and loss of Singapore origin of all CTVs. As a consequence, the Singapore origin declarations were false and therefore, fraud.

  13. 13.

    Commission Regulation (EC) No 2376/94 of 27 September 1994, recital (32).

  14. 14.

    Commission Regulation (EC) No 2376/94 of 27 September 1994 (Asia 1) imposing a provisional anti-dumping duty on imports of colour television receivers originating in Malaysia, the people’s Republic of China, the Republic of Korea, Singapore and Thailand, Official Journal L 255, 01/10/1994, pp. 50–69, recital 33.

  15. 15.

    Commission Regulation (EC) No 2376/94 of 27 September 1994 (Asia 1) provisional, recital 34.

  16. 16.

    Global Trade Information Services, Inc. (GTI) Global Trade Atlas.

  17. 17.

    Council Regulation (EC) No 710/95 of 27 March 1995, CTV definitive, OJ L 73, 1.4.1995, pp. 3–12, recital (9).

  18. 18.

    Tanaka, Shoko, and Kenney, Martin: “US and Electronics Industries in Malaysia: A Comparative Analysis”; Journal of International Cooperation Studies, Vol. 4, no 1, pp. 59–72; p. 70.

  19. 19.

    All Japanese CTV sizes below 25 in. were produced with an imported tube from overseas production and, therefore, not originating in Japan.

  20. 20.

    Commission Regulation (EC) No 2376/94 of 27 September 1994 (CTV Asia 1), recitals (29) and (30).

  21. 21.

    PART II Disciplines to Govern the Application of Rules of Origin, Article 2, Disciplines During the Transition Period (c).

  22. 22.

    Note on the Undercutting and Injury Margin Calculations, European Commission, letter of 1 August 2001, number 057867) and Eurostat.

  23. 23.

    Rounding of numbers has resulted in marginal discrepancies between left and right hand expressions.

  24. 24.

    The Turkish producers and government protested, the latter heavily in a note “Comments of the Turkish Government regarding Final Disclosure of Anti Dumping Investigation initiated against colour television receivers originating in or exported from Turkey” of 20 August 2001. The Turkish government did not, of course, express the wish that the origin rule be interpreted differently so that television sets manufactured in Turkey and dumped in the European Community would have Turkish origin. That would have eliminated the injury due to dumping and would have saved European television industry.

  25. 25.

    Article 1, Principles, 2: “A product is to be considered as being dumped if its export price to the Community is less than a comparable price for the like product, in the ordinary course of trade as established for the exporting country.”

  26. 26.

    Commission Regulation (EEC) No 129/91 of 11 January 1991 imposing a provisional anti-dumping duty on imports of small-screen colour television receivers originating in Hong Kong and the people’s Republic of China, OJ L 014, 19/01/1991, pp. 31–45.

  27. 27.

    Council Regulation (EC) No 461/2004 of 8 March 2004 amending Regulation (EC) No 384/96 on protection against dumped imports from countries not members of the European Community and Regulation (EC) No 2026/97 on protection against subsidised imports from countries not members of the European Community OJ L 77/12, 13/3/2004, Article 2, Determination of dumping, A. Normal Value, recital 1.

  28. 28.

    Commission Regulation (EC) No 2376/94 of 27 September 1994 imposing a provisional anti-dumping duty on imports of colour television receivers originating in Malaysia, the people’s Republic of China, the Republic of Korea, Singapore and Thailand OJ L 255, 01/10/1994, pp. 50–69; Asia 1.

  29. 29.

    Article 22 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code, OJ L 302, 19/10/1992, pp. 1–50.

  30. 30.

    Sampling takes place when the number of exporters is too great for the European Commission to handle all exporters’ data.

  31. 31.

    Council Regulation (EC) No 1531/2002 of 14 August 2002 (CTV Asia 3), recital (66).

  32. 32.

    GfK data on the Turkish market in the reference period.

  33. 33.

    And this normal value was not applicable because Korean 14-in. tubes generally originated in other countries than Korea, with the exception of Orion, which supplied inter alia Thomson in Thailand.

  34. 34.

    Commission Decision of 29 July 2002 accepting an undertaking offered in connection with the anti-dumping proceeding concerning imports of colour television receivers originating in Malaysia, the People’s Republic of China, the Republic of Korea, Singapore and Thailand, O J L 23129.8.2002, recital (4).

  35. 35.

    Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 Article 2.2 Determination of Dumping.

  36. 36.

    Judgment of the Court (Fourth Chamber) 8 March 2007 in Joined Cases C-447/05 and C-448/05.

  37. 37.

    REM 03/05 Commission of the European Communities Brussels, 7-5-2007 C(2007)1829.

  38. 38.

    Information on European Community and Turkish CTV production and tube sourcing was supplied by the tube industry during various anti-dumping cases on CTV and cathode ray tubes. The information is, of course, obsolete and since the suppliers went bankrupt and the product has disappeared, is no longer confidential.

  39. 39.

    Raikes B (2008).

  40. 40.

    Commission Decision of 28 September 2001 terminating the anti dumping proceeding concerning imports of colour television receivers originating in Turkey (noted under document number C(2001) 2916), O J L 272/37 of 13.10.2001 (2001/725/EC), recital (9).

  41. 41.

    Judgment of the Court of First Instance (Third Chamber) of 10 May 2001, in Joined Cases T-186/97, T-187/97, T-190/97 to T-192/97, T-210/97, T-211/97, T-216/97 to T-218/97, T-279/97, T-280/97, T-293/97 and T-147/99, recital 264.

  42. 42.

    Commission Regulation (EC) No 2376/94 of 27 September 1994 imposing a provisional anti-dumping duty on imports of colour television receivers originating in Malaysia, the people’s Republic of China, the Republic of Korea, Singapore and Thailand Official Journal L 255, 01/10/1994, pp. 0050–0069, recitals (98) and (99).

  43. 43.

    Judgment of the Court of First Instance (Third Chamber) of 10 May 2001.

  44. 44.

    For the sake of the cooperation of exporting producers, the data provided confidentially in a proceeding are, of course, kept as confidential information to the investigating authorities. If information is non-confidential, there is no reason not to inform the European Anti-Fraud Office (OLAF).

  45. 45.

    It is normal that the European Commission not report fraud if the information was obtained from confidential information provided by cooperating exporters. Reporting to OLAF would inhibit exporters’ cooperation in anti-dumping proceeding. This does not apply to evidence that is provided by other parties in non-confidential material.

  46. 46.

    General Disclosure Document AD No 433, R No 232, 1 August 2001.

  47. 47.

    Although the importer might have the knowledge that tubes imported from China into Turkey are used for exports to the European Community, it is not liable. The Judgment of the Court of First Instance opined that before it is reported: “To encourage the export of Turkish products to the European Community and to third countries, the Turkish authorities set up an export aid programme (the export incentive scheme) providing for exemption from customs duties on importation of components from third countries on condition that they were used in the manufacture of products which were then exported to the European Community or third countries.” That implies that it is self-evident that Vestel exported all its tubes imported from China in sets to the European Community.

  48. 48.

    Anti Dumping proceeding concerning imports of colour television receivers originating in or being exported from Turkey; Comments submitted by: Vestel Group of Companies, 15 September 2000, p. 80.

  49. 49.

    Judgment of the Court of Justice Vestel Thomson Joined Cases C-447/05 and C-448/05 Thomson Multimedia Sales Europe and Vestel France.

  50. 50.

    Notes to the unaudited interim condensed consolidated financial statements, 2008, p. 35.

  51. 51.

    Council Regulation (EC) No 1205/2007 of 15 October 2007, OJ L 272 of 17.10.2007, Annex Company A.

  52. 52.

    Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code, Official Journal L 302, 19/10/1992, pp. 1–50, Article 24. Even the Internet site of the Taxation and Customs Union directorate general refers at “products having undergone a last substantial transformation.”

  53. 53.

    Vermulst and Rovetta (2006) have written a comprehensive and illustrative article about the subject. It gives information on origin and fraud, sometimes deliberate and sometimes attributable to false legislation.

  54. 54.

    Commission Regulation (EEC) No 313/92 of 4 February 1992, OJ L 34, 11.2.1992, p. 8–20 and Council Regulation (EEC) No 2306/92 of 4 August 1992, O J L 222, 07/08/1992, p. 0008–0015.

  55. 55.

    Report from the Commission Report on the follow-up of traditional own resources in cases of fraud and irregularities, Brussels, 4.2.2005, COM (2004) 850 final/2, p. 30.

  56. 56.

    See Vermulst (2010).

References

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  • Vermulst EA, Rovetta D (2006) Origin rules in EU anti-dumping law and practice: an update. GTCJ 3(10):337–348

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  • Vermulst EA (2010) EC anti-dumping law and practice. Sweet and Maxwell, London

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  1. Eindhoven, Netherlands

    Marcel van Marion

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van Marion, M. (2014). Orientation on Origin Rules: A Digression on Discrimination. In: International Trade Policy and European Industry. Contributions to Economics. Springer, Heidelberg. https://doi.org/10.1007/978-3-319-00392-4_12

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