November 22nd, by Dimana TODOROVA
The European Commission issued on 17 October 2017 its 35th annual report on the EU’s Anti Dumping, Anti-Subsidy and Safeguard activities for 2016 under its obligation to present it to the European Union and the Council pursuant to Article 23 of Regulation (EU) 2016/1036 (antidumping), Article 34 of Regulation (EU) 2016/1037 (anti-subsidy), and Article 23 of Regulation (EU) 2015/478 (common rules for imports).
Overview of current investigations and duties
At the end of 2016, the European Union had 90 definitive anti-dumping (AD) measures and 12 definitive anti-subsidy (AS) measures in force which shows a slight increase of 4% over the previous year. The 20 ongoing investigations at the end of 2016 correspond to the number at the end of 2015. The number of new cases (15) initiated increased slightly while a significant number of cases (9) were re-opened in order to implement judicial findings. The number of reviews initiated (15) was still important although it was lower than in 2015. The majority of the reviews were expiry reviews. As was the case with previous years, no safeguard action was taken by the EU.
The Commission notes that during the previous year 0,27% of total imports into the EU were affected by AD or AS measures and that the expiry review investigations show, in many cases, that the imposition of measures leads to a significant reduction of the imports of the product concerned.
Overall, in 2016 there was a slight increase in the number of new investigations opened, against the backdrop of a prolonged crisis caused largely by industrial overcapacities in China, notably in, but not limited to, the steel sector. Given that the level of activity in antidumping investigations is complaint-driven, the number of cases reflects, in fact, the number of complaints received from EU industries.
Enforcement of antidumping and anti-subsidy measures
The follow-up activities were centred on four main areas:
(1) to pre-empt fraud;
(2) to monitor trade flows and market developments;
(3) to improve the effectiveness with the appropriate instruments and
(4) to react to irregular practices.
Concerning the undertakings, which are a form of AD or AS measures, there were 122 undertakings in force at the beginning of 2016. During the year, undertakings of 20 companies were withdrawn because breaches occurred or the monitoring became impracticable or because the companies had notified the Commission that they wished to withdraw from the undertaking.
No new undertaking was accepted in 2016 which confirms the tendency from last couple of years of decrease in the number of undertakings accepted by the Commission.
New antidumping legislation
The main subject in 2016 was the legislative proposal that provides a new calculation methodology of normal values. This proposal was mainly prepared in 2016 and was adopted by the Commission in November 2016. Doing so, the Commission conducted an impact assessment and a public consultation.
The first element of the proposal is the introduction of a new antidumping methodology to capture market distortions linked to state intervention in third countries. The second element concerns the strengthening of the anti-subsidy instrument to increase the EU’s ability to capture the full magnitude of subsidization.
The legislative procedure has progressed in 2017 since the negotiators of the European Parliament and the Council reached an agreement on the proposal on 3 October. Moreover, on 15 November, the Parliament endorsed in its plenary session the informal agreement with the Council on the new regulation.
The new rules will enter into force after the Council formally approved them and they are published in the Official Journal of the EU which is expected before the end of this year.
In its annual report, the Commission also recalls that discussions were held relating to the market economy status process for China, Vietnam, Armenia, Kazakhstan and Mongolia. At the end of December 2016, Belarus entered into the process. With the accession of Kazakhstan to the WTO, it was officially removed from the list of countries with market economy status in 2017.
At the same time, the Commission actively engaged with the Council in relation to the Trade Defence Instruments Modernisation proposal. These efforts culminated in the Council reaching a position at the end of 2016 allowing for the ordinary legislative procedure to progress.
The European anti-dumping policy has also been the subject of litigation before the WTO bodies. In the Argentinean Biodiesel case, the WTO Appellate Body confirmed that the anti-dumping measures imposed by the Union to adjust producers’ costs were WTO-consistent. Similarly, the panel upheld the calculations of dumping and the analysis of the factors causing injury to the European industry in the Indonesian fatty alcohols case.
Finally, China has requested consultations with the EU on the provisions of the EU basic antidumping regulation which govern the establishment of normal value.