Abstract
On 9 November 2016, the European Commission (Commission) finally presented its long-awaited proposal on how to calculate normal value in anti-dumping proceedings involving Chinese producers post-11 December 2016. Although projected as supposedly “neutral” in terms of its application ratione territoriae, the text, context and its expected implementation indicate that the claimed neutrality is just a fig leaf. As was of course perfectly foreseeable, the proposal did not make it through the co-decision procedure (Article 294 Treaty on the Functioning of the EU) in time and, equally foreseeable, China initiated a World Trade Organization (WTO) dispute settlement proceeding against the European Union (EU) on 12 December 2016 (Request for consultations by China, European Union—Measures related to price comparison methodologies, G/ADP/D116/1, G/L/1170, WT/DS516/1, 12 December 2016.). After protracted negotiations, on 3 October 2017, the Council and the European Parliament agreed on a compromise proposal which was eventually adopted by both the institutions and will shape the EU’s new approach in anti-dumping cases against China, and possibly other countries, in the years to come. However, the WTO-compatibility of the new provisions is questionable as discussed in this article.
You can fool some people some time, but you can’t fool all the people all the time.
Bob Marley, Get Up, Stand Up (1973)
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Notes
- 1.
For the text of the significant distortions rules, see http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017R2321&from=EN (last accessed 30 April 2018).
- 2.
See e.g. Vermulst et al. (2016), pp. 212–228, and all the articles on the subject referred to in footnote 4.
- 3.
See, for more detail, Vermulst (2010) pp. 299–307.
- 4.
See Commission staff working document, Impact assessment, Possible change in the calculation methodology of dumping regarding the People’s Republic of China (and other non-market economies) accompanying the document Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2016/1036 on protection against dumped imports from countries not members of the European Union and Regulation (EU) 2016/1037 on protection against subsidised imports from countries not members of the European Union, SWD(2016) 370 final, 9 November 2016, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SWD:2016:0371:FIN:EN:PDF (last accessed 30 April 2018), p. 13. Compare Commission Staff Document on progress by the People’s Republic of China towards graduation to Market Economy Status in Trade Defence Investigations, SEC(2008) 2503 final, 19 September 2008, http://trade.ec.europa.eu/doclib/docs/2009/june/tradoc_143599.pdf (last accessed 30 April 2018), p. 4.
- 5.
The EU found in 2004 that China met the second criterion, Vermulst et al. (2016), p. 223. The last assessment by the EU took place in 2008.
- 6.
The five country-wide criteria are very similar to the five criteria that individual NME producers must satisfy in order to qualify for market economy treatment (MET) under Article 2(7)(c) of the EU’s Basic Anti-Dumping Regulation, OJ 2016 L 176/21:
-
decisions of firms regarding prices, costs and inputs, including for instance raw materials, cost of technology and labour, output, sales and investment are made in response to market signals reflecting supply and demand, and without significant State interference in that regard and costs of major inputs substantially reflect market values;
-
firms have one clear set of basic accounting records which are independently audited in line with international accounting standards and are applied for all purposes;
-
the production costs and financial situation of firms are not subject to significant distortions carried over from the former non-market economy system, in particular in relation to deprecation of assets, other write-offs, barter trade and payment via compensation of debts;
-
the firms concerned are subject to bankruptcy and property laws which guarantee legal certainty and stability for the operation of firms; and
-
exchange rate conversions are carried out at the market rate.
According to Commission data, in the 5-year period 2006–2010, 173 MET applications were received and 37 were granted; in the 5-year period 2011–2015, 75 applications were received and four were granted (see Commission staff working document, Impact assessment, Possible change in the calculation methodology of dumping regarding the People’s Republic of China (and other non-market economies) accompanying the document Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2016/1036 on protection against dumped imports from countries not members of the European Union and Regulation (EU) 2016/1037 on protection against subsidised imports from countries not members of the European Union, SWD(2016) 370 final, 9 November 2016, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SWD:2016:0371:FIN:EN:PDF (last accessed 30 April 2018), p. 6). This shows the wide discretion that the Commission has in assessing the MET criteria and the arguably arbitrary application.
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- 7.
See Karel De Gucht (then EU trade Commissioner) (2013) Modernisation of trade Defence—Getting the Job Done, Brussels, 7 November 2013, http://trade.ec.europa.eu/doclib/docs/2013/november/tradoc_151873.pdf (last accessed 30 April 2018): “…in 2016 China will get market economy status.”
Moreover, the EU itself argued in the WTO dispute, EC – Fasteners (China), that section 15 of China’s Accession Protocol “entitles” it to treat China as a NME, until 2016. Appellate Body Report, European Communities – Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China, WT/DS397/AB/R, adopted 15 July 2011, DSR 2011:II, paras. 25, 361.
Additionally, in the proposal for the EU’s position on the accession of China to the WTO, the Commission stated as follows: “The EU’s present legislation which provides specific procedures for dealing with cases of alleged dumping by Chinese exporters, which may not yet be operating in normal market economy conditions, will remain available for up to fifteen years after China enters the WTO…”, European Council, Proposal for a Council Decision establishing the Community position within the Ministerial Conference set up by the Agreement establishing the World Trade Organization on the accession of the People’s Republic of China to the World Trade Organization, COM(2001) 517 final—2001/0218(CNS), http://trade.ec.europa.eu/doclib/docs/2016/november/tradoc_155079.pdf (last accessed 30 April 2018), Recital 54. See Suse A (2017) Old wine in a new bottle: the EU’s response to the expiry of section 15(a)(ii) of China’s WTO protocol of accession, 3 April 2017, https://ssrn.com/abstract=2952015 (last accessed 30 April 2018).
- 8.
See http://www.aegiseurope.eu (last accessed 30 April 2018). AEGIS Europe groups industry associations in various sectors such as steel (Eurofer), bicycles (EBMA), solar panels and cells (EU ProSun), metals (Eurometaux), metal alloys (Euroalliages) and ceramics (Cerame-Unie).
- 9.
See European Commission, DG Trade, Inception impact assessment, January 2016, http://ec.europa.eu/smart-regulation/roadmaps/docs/2016_trade_002_dumping_investigations_china_en.pdf (last accessed 30 April 2018).
- 10.
The inception impact assessment report states as follows: “Certain provisions in the Protocol on the accession of China to the WTO expire in 2016, and this may affect the ability of other WTO Members, such as the EU, to use the Non-Market-Economy methodology automatically.” See European Commission, DG Trade, Inception impact assessment, January 2016, http://ec.europa.eu/smart-regulation/roadmaps/docs/2016_trade_002_dumping_investigations_china_en.pdf (last accessed 30 April 2018), p. 4.
- 11.
See European Commission, College orientation debate on the treatment of China in anti-dumping investigations, 20 July 2016, http://europa.eu/rapid/press-release_IP-16-2567_en.htm (last accessed 30 April 2018).
- 12.
See European Commission, Commission urges Member States to support proposals to strengthen European defences against unfair trade, 19 October 2016, http://europa.eu/rapid/press-release_IP-16-3475_en.htm (last accessed 30 April 2018); European Commission, Commission proposes changes to the EU’s anti-dumping and anti-subsidy legislation, 9 November 2016, http://europa.eu/rapid/press-release_MEMO-16-3605_en.htm, (last accessed 30 April 2018): “The purpose is to make sure that Europe has trade defence instruments that are able to deal with current realities – notably overcapacities – in the international trading environment, while fully respecting the EU’s international obligations in the legal framework of the World Trade Organization (WTO)… The proposal is important because it means that the EU is living up to its WTO commitments.”
- 13.
See also, Cecilia Malmström, Hard nut to crack—between openness and trade defence, 9 November 2016, https://ec.europa.eu/commission/commissioners/2014-2019/malmstrom/blog/hard-nut-crack-between-openness-and-trade-defence_en (last accessed 30 April 2018): “The proposal that the Commission is presenting brings together these views; maintaining a similar level of anti-dumping duties as today, while introducing more flexibility to counter distortions that were not properly captured before.”
See also European Commission, Commission proposes changes to the EU’s anti-dumping and anti-subsidy legislation, 9 November 2016, http://europa.eu/rapid/press-release_MEMO-16-3605_en.htm (l last accessed 30 April 2018): “The Commission’s Impact Assessment demonstrates that the new methodology will result in a broadly equivalent level of anti-dumping duties as is currently the case.”
- 14.
See European Commission, Commission proposes changes to the EU’s anti-dumping and anti-subsidy legislation, 9 November 2016, http://europa.eu/rapid/press-release_MEMO-16-3605_en.htm (last accessed 30 April 2018).
- 15.
Request for consultations by China, European Union – Measures related to price comparison methodologies, WT/DS516/1, G/L/1170, WT/DS516/1, 12 December 2016.
- 16.
See Council, Anti-dumping methodology: Council agrees negotiating position, 3 May 2017, http://www.consilium.europa.eu/en/press/press-releases/2017/05/03-anti-dumping/ (last accessed 30 April 2018).
- 17.
See Foreign Affairs Council, Main results: New anti-dumping methodology, 11 May 2017, http://www.consilium.europa.eu/en/meetings/fac/2017/05/11/ (last accessed 30 April 2018).
- 18.
See European Parliament, More robust anti-dumping rules to defend EU industry and jobs, 20 June 2017, http://www.europarl.europa.eu/news/en/press-room/20170620IPR77802/more-robust-anti-dumping-rules-to-defend-eu-industry-and-jobs (last accessed 30 April 2018).
- 19.
See European Commission, Commission welcomes agreement on new anti-dumping methodology, 3 October 2017, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1735 (last accessed 30 April 2018).
See also European Parliament, EU anti-dumping measures that protect jobs: MEPs and ministers strike deal, 3 October 2017, http://www.europarl.europa.eu/news/en/press-room/20171003IPR85229/eu-anti-dumping-measures-that-protect-jobs-meps-and-ministers-strike-deal (last accessed 30 April 2018).
- 20.
See European Commission, The EU is changing its anti-dumping and anti-subsidy legislation to address state induced market distortions, 5 October 2017, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1736 (last accessed 30 April 2018).
- 21.
See Council, Anti-dumping: EU agrees on new rules for protecting its producers against unfair trade practices, 11 October 2017, http://www.consilium.europa.eu/en/press/press-releases/2017/10/11-anti-dumping-unfair-practices/ (last accessed 30 April 2018).
- 22.
See European Parliament, Trade MEPs back informal deal on EU anti-dumping measures, 12 October 2017, http://www.europarl.europa.eu/news/en/press-room/20171012IPR85905/trade-meps-back-informal-deal-on-eu-anti-dumping-measures (last accessed 30 April 2018).
- 23.
See European Parliament, Parliament passes new anti-dumping rules to protect EU jobs and industry, 15 November 2017, http://www.europarl.europa.eu/news/en/press-room/20171110IPR87817/parliament-passes-new-anti-dumping-rules-to-protect-eu-jobs-and-industry (last accessed 30 April 2018).
- 24.
See Council, Anti-dumping: Council adopts new rules against unfair trade practices, 4 December 2017, http://www.consilium.europa.eu/en/press/press-releases/2017/12/04/anti-dumping-council-adopts-new-rules-against-unfair-trade-practices/pdf (last accessed 30 April 2018).
- 25.
The EU Basic Anti-Subsidy Regulation 2016/1037 has also been amended to include a provision that the Commission can investigate and countervail subsidies discovered in the course of an investigation, provided that the exporting country is duly notified and consulted. This provision added in a sub-paragraph to Article 10(7) of the EU Basic Anti-Subsidy Regulation essentially covers existing practice and will not be discussed further.
- 26.
Non-WTO NMEs will continue to be subject to the application of the analogue country methodology. Such countries would be covered by the new Article 2(7) which basically replicates the thus far applicable Article 2(7)(a).
- 27.
See European Commission, The EU is changing its anti-dumping and anti-subsidy legislation to address state induced market distortions, 5 October 2017, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1736 (last accessed 30 April 2018).
- 28.
European Commission, Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1225/2009 on protection against dumped imports from countries not members of the European Community and Council Regulation (EC) No 597/2009 on protection against subsidised imports from countries not members of the European Community, COM(2013) 192 final, 10 April 2013, http://trade.ec.europa.eu/doclib/docs/2013/april/tradoc_150838.pdf (last accessed 30 April 2018).
- 29.
Defined as countries that have not ratified core ILO conventions or environmental agreements to which the EU is a party.
- 30.
It would seem that Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, Ireland, Latvia, Malta, Slovenia, Sweden and the UK were against the proposal.
- 31.
See Council, Trade defence instruments: Council agrees negotiating position, 13 December 2016, http://www.consilium.europa.eu/en/press/press-releases/2016/12/13/trade-defence-instruments-general-approach/ (last accessed 30 April 2018).
- 32.
See European Commission, Commission welcomes landmark deal modernising the EU’s trade defence, 5 December 2017, http://europa.eu/rapid/press-release_IP-17-5136_en.htm (last accessed 30 April 2018); see also European Parliament, Tougher defence tools against unfair imports, MEPs strike deal with ministers, 6 December 2017, http://www.europarl.europa.eu/news/en/press-room/20171205IPR89528/tougher-defence-tools-against-unfair-imports-meps-strike-deal-with-ministers (last accessed 30 April 2018).
- 33.
See e.g. Mlex report, EU negotiators strike deal on overhaul of trade defense rules, 6 December 2017.
- 34.
The Commission initially proposed to provide interested parties with a limited pre-disclosure—including a summary of the dumping and injury margin calculations—of 2 weeks in advance of the imposition of provisional measures, and proposed the non-imposition of provisional measures for a period of 2 weeks pursuant to the pre-disclosure. See proposed amendments to Articles 7 and 19 in the Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1225/2009 on protection against dumped imports from countries not members of the European Community and Council Regulation (EC) No 597/2009 on protection against subsidised imports from countries not members of the European Community, COM(2013) 192 final, 10 April 2017.
- 35.
See Council, Trade defence instruments: EU ambassadors confirm the outcome of the final political trilogue with European Parliament, 19 December 2017, http://www.consilium.europa.eu/en/press/press-releases/2017/12/20/trade-defence-instruments-eu-ambassadors-confirm-the-outcome-of-the-final-political-trilogue-with-european-parliament/ (last accessed 30 April 2018).
- 36.
See European Commission, Commission welcomes progress in approval of the modernised EU’s trade defence rules, 23 January 2018, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1788 (last accessed 30 April 2018).
- 37.
See Article 2(7)(c) of the EU’s Basic Anti-Dumping Regulation.
- 38.
See for instance the following criteria in Article 2(6a)(b): state presence in firms allowing the state to interfere with prices or costs; wage cost distortion; access to finance from institutions implementing public policy objectives; lack of/discriminatory application of bankruptcy, corporate or property laws.
- 39.
See for instance the following criteria in Article 2(6a)(b): market in question is to a significant extent served by state-owned/controlled firms; public policies discriminating in favour of domestic suppliers.
- 40.
See Article 2(6a)(e).
- 41.
See Blenkinsop P, EU to single out Chinese imports in report on market distortions. Reuters, 5 October 2017, https://in.reuters.com/article/us-eu-china-trade/eu-to-single-out-chinese-imports-in-report-on-market-distortions-idINKBN1CA1N2 (last accessed 30 April 2018).
- 42.
See Council, Anti-dumping methodology: Council agrees negotiating position, 3 May 2017, http://www.consilium.europa.eu/en/press/press-releases/2017/05/03-anti-dumping/ (last accessed 30 April 2018): “The new methodology for calculating dumping is based on rules established by the WTO anti-dumping agreement.”
Also European Commission, Commission welcomes agreement on new anti-dumping methodology, 3 October 2017, http://europa.eu/rapid/press-release_IP-17-3668_en.htm (last accessed 30 April 2018): “The rules are formulated in a country-neutral way and in full compliance with the EU’s WTO obligations.”
- 43.
Appellate Body Report, United States – Measures Relating to Zeroing and Sunset Reviews, WT/DS322/AB/R, adopted 9 January 2007, DSR 2006:V, para. 111.
- 44.
Appellate Body Report, United States – Final Anti-Dumping Measures on Stainless Steel from Mexico, WT/DS344/AB/R, adopted 30 April 2008, DSR 2006:VI, para. 86.
- 45.
Appellate Body Report, United States – Continued Existence and Application of Zeroing Methodology, WT/DS350/AB/R, adopted 4 February 2009, DSR 2008:XI, para. 101.
- 46.
Article 2(6a)(a).
- 47.
Article 2.2 of the Anti-Dumping Agreement states as follows: “When there are no sales of the like product in the ordinary course of trade in the domestic market of the exporting country or when, because of the particular market situation or the low volume of the sales in the domestic market of the exporting country, such sales do not permit a proper comparison, the margin of dumping shall be determined by comparison with a comparable price of the like product when exported to an appropriate third country, provided that this price is representative, or with the cost of production in the country of origin plus a reasonable amount for administrative, selling and general costs and for profits.”
- 48.
The use of facts available to establish the normal value is a separate matter.
- 49.
The Appellate Body noted in EU – Biodiesel (Argentina) that “…Article 2.2.1.1 includes rules pertaining to the calculation of the “cost of production” for purposes of determining the normal value under Article 2.2.” See Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R, adopted 6 October 2016, DSR 2016:IV, para. 6.17.
- 50.
Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R, adopted 6 October 2016, DSR 2016:IV, para. 6.18.
- 51.
The first sentence of Article 2.2.1.1 of the Anti-Dumping Agreement states as follows: “For the purpose of paragraph 2, costs shall normally be calculated on the basis of records kept by the exporter or producer under investigation, provided that such records are in accordance with the generally accepted accounting principles of the exporting country and [the recorded costs] reasonably reflect the costs associated with the production and sale of the product under consideration.”
- 52.
Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R, adopted 6 October 2016, DSR 2016:IV.
- 53.
Council Implementing Regulation (EU) No 1194/2013 of 19 November 2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia, OJ 2013 L 315/2, Recitals 35–40.
- 54.
Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R, adopted 6 October 2016, DSR 2016:IV, para. 6.26.
- 55.
Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R, adopted 6 October 2016, DSR 2016:IV, para. 6.30.
- 56.
Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R, adopted 6 October 2016, DSR 2016:IV, para. 6.37.
- 57.
Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R, adopted 6 October 2016, DSR 2016:IV, para. 6.55.
- 58.
Commission Notice of initiation regarding the anti-dumping measures in force on imports of biodiesel originating in Argentina and Indonesia, following the recommendations and rulings adopted by the Dispute Settlement Body of the World Trade Organisation in the EU—Anti-Dumping Measures on Biodiesel dispute (DS473), OJ 2016 C 476/3.
- 59.
Commission Implementing Regulation (EU) 2017/1578 of 18 September 2017 amending Implementing Regulation (EU) No 1194/2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia, OJ 2017 L 239/9, Recital 68. See also Recitals 51–55.
- 60.
Commission Implementing Regulation (EU) 2017/1578 of 18 September 2017 amending Implementing Regulation (EU) No 1194/2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia, OJ 2017L 239/9, Recital 73.
- 61.
Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R, adopted 6 October 2016, DSR 2016:IV, para. 6.69.
- 62.
Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R, adopted 6 October 2016, DSR 2016:IV, para. 6.23. In para. 6.24, the Appellate Body further noted as follows: “… in our view, Article 2.2 of the Anti-Dumping Agreement concerns the establishment of the normal value through an appropriate proxy for the price of the like product in the ordinary course of trade in the domestic market of the exporting country when the normal value cannot be determined on the basis of domestic sales.129The costs calculated pursuant to Article 2.2.1.1 of the Anti-Dumping Agreement must be capable of generating such a proxy. This supports the view that the “costs associated with the production and sale of the product under consideration” in Article 2.2.1.1 are those costs that have a genuine relationship with the production and sale of the product under consideration. This is because these are the costs that, together with other elements, would otherwise form the basis for the price of the like product if it were sold in the ordinary course of trade in the domestic market.”
- 63.
Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R, adopted 6 October 2016, DSR 2016:IV, para. 6.74.
- 64.
Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R, adopted 6 October 2016, DSR 2016:IV, para. 6.73.
- 65.
Article 18.3 of the Anti-Dumping Agreement states as follows: “Subject to subparagraphs 3.1 and 3.2, the provisions of this Agreement shall apply to investigations, and reviews of existing measures, initiated pursuant to applications which have been made on or after the date of entry into force for a Member of the WTO Agreement.”
- 66.
Panel Report, European Union – Anti-Dumping Measures on Certain Footwear from China, WT/DS405/R, adopted 28 October 2011, paras. VII.920–VII.935, especially paras. 924 and 927: “While the term “lesser duty” is not defined in the AD Agreement, it is clear that this term refers to the concept of an anti-dumping duty less than the full amount of the margin of dumping, as described in Article 9.1. It is also clear from the text of Article 9.1, and China does not dispute, that the imposition of a lesser duty is “desirable”, but is not an obligation for WTO Members. Beyond stating that a lesser duty is desirable, if such lesser duty would be “adequate to remove the injury to the domestic industry”, Article 9.1 says nothing about how the amount of a lesser duty should be established. … In our view it is clear, and indeed, China does not contend otherwise, that Article 9.1 does not prescribe any methodology or criteria for the determination of the amount of a lesser duty, should a Member choose to apply one.
(…)
We…consider that while the imposition of a duty at a level adequate to remove the injury is clearly contemplated by Article 9.1, this does not limit the basis on which an investigating authority may choose to apply a duty less than the full amount of the margin of dumping. Even assuming that, as in this case, an investigating authority’s stated basis for application of a lesser duty is to impose a duty at a level adequate to “eliminate the material injury to the…industry caused by the dumped imports without exceeding the dumping margins”, this does not, in our view, establish that Article 3.1 is relevant to the establishment of the level of lesser duty to be applied. There is, in our view, no basis in the text of Article 3.1 for the conclusion that it requires any particular approach to the calculation of a level of duty that will be sufficient to remove the injury determined to exist.” (Footnotes omitted)
- 67.
DG Growth of the EU has spent significant time on developing a policy ensuring better access to raw materials for US producers, see, e.g. https://ec.europa.eu/growth/sectors/raw-materials/policy-strategy_en (last accessed 30 April 2018).
- 68.
Appellate Body Report, United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, WT/DS379/AB/R, adopted 11 March 2011, DSR 2010:III, para. 541.
- 69.
Appellate Body Report, United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, WT/DS379/AB/R, adopted 11 March 2011, DSR 2010:III, para. 583. See also Vermulst and Gatta (2012), pp. 143–158.
- 70.
Appellate Body Report, United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, WT/DS379/AB/R, adopted 11 March 2011, DSR 2010:III, para. 543.
- 71.
Due to the existence of subsidies and possibly the satisfaction of the structural raw material distortion threshold.
- 72.
AEGIS Europe, New Commission proposal undermines legal certainty in EU trade defence policy, 9 November 2016, http://www.aegiseurope.eu/news/press-release-new-commission-anti-dumping-proposal-undermines-legal-certainty-in-eu-trade-defence-policy (last accessed 30 April 2018). More recently, see O’Connor B, A short primer on China, anti-dumping and the Commission’s proposal on significant distortions. Italy Europe 24, 10 April 2017, http://www.italy24.ilsole24ore.com/art/laws-and-taxes/2017-04-10/a-short-primer-on-china-anti-dumping-and-the-commission-s-proposal-on-significant-distortions--184706.php?uuid=AEGnKy2 (last accessed 30 April 2018).
- 73.
Request for the establishment of a Panel, European Union – Measures related to price comparison methodologies, G/ADP/D116/1, G/L/1170, WT/DS516/1, 12 December 2016, fn. 2: “At present, China is aware of two legislative processes implicating potential changes to relevant provisions of the Basic Regulation: (i) the legislative process initiated by the European Commission’s Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2016/1036 on protection against dumped imports from countries not members of the European Union and Regulation (EU) 2016/1037 on protection against subsidised imports from countries not members of the European Union, dated 9 November 2016 (COM(2016) 721 final); and, (ii) the legislative process initiated by the European Commission’s Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1225/2009 on protection against dumped imports from countries not members of the European Community and Council Regulation (EC) No 597/2009 on protection against subsidised imports from countries not members of the European Community (COM(2013) 192 final). This request includes any changes made to the Basic Regulation pursuant to the legislative processes initiated by these proposals.”
- 74.
Meeting of the Committee on Anti-Dumping Practices of 25 October 2017.
- 75.
Questions posed by the Russian Federation regarding the proposal for the EU Basic Anti-Dumping Regulation concerning determination of normal value, G/ADP/W/497, 27 April 2017.
- 76.
European Union’s reply to questions posed by the Russian Federation regarding the proposal for the EU Basic Anti-Dumping Regulation concerning determination of normal value, G/ADP/W/499, 23 October 2017.
- 77.
In fact, in the Australian anti-dumping investigation against prepared or preserved tomatoes from Italy, the Australian Anti-Dumping Commission determined that the recorded cost of raw tomatoes of two Italian companies did not reasonably reflect competitive market costs associated with the production or manufacture of the investigated product because subsidies in the form of direct income support payments made to growers of raw tomatoes in Italy—under the Single Payment Scheme which is a part of the EU’s Common Agricultural Policy—significantly affected the prevailing market prices in Italy for raw tomatoes. The Anti-Dumping Commission adjusted—to calculate the “true cost of production”—the verified recorded costs of the producers by adding an amount reflecting the direct income support payments in EURO per kg of raw tomatoes produced during the investigation period. See Australian Government Anti-Dumping Commission, Final report No. 276, Dumping of prepared or preserved tomatoes exported from Italy by Feger Di Gerardo Ferraioli S.P.A. and La Doria S.P.A., 18 January 2016, section 6.4. While the Anti-Dumping Review Panel (ADRP) later overturned this determination on the narrow ground that the advantage conferred to the tomato growers by the subsidies was not transferred to the processors/producers of the product concerned, it seems only a question of time before similar or other EU subsidy programs will become a basis for cost adjustments by third country investigating authorities.
References
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Vermulst, E., Sud, J.D. (2018). The New Rules Adopted by the European Union to Address “Significant Distortions” in the Anti-Dumping Context. In: Bungenberg, M., Hahn, M., Herrmann, C., Müller-Ibold, T. (eds) The Future of Trade Defence Instruments. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-319-95306-9_4
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