European Union – draft amendments to the Basic Anti-Dumping Regulation

Eleven WTO members expressed concern with the European Union's draft amendments to its Basic Anti-Dumping Regulation, which are due to enter into force before the end of the year.  Russia said the EU plans to deviate from normal practices in determining dumping margins when the domestic prices in the exporting country in question are deemed to be "significantly distorted" by state interference.  Russia said there appeared to be no clear definition of the broad criteria used to determine significant distortion and that it would give EU authorities unlimited discretion to determine whether the criteria are being met.  Russia urged the EU to reconsider the draft amendments.

Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, China, Kazakhstan, Egypt, the United Arab Emirates (in writing) and Colombia also voiced varying degrees of concern.  Saudi Arabia said the EU's criteria clearly depart from standards set out under the WTO's Anti-Dumping Agreement (ADA), while Bahrain said the proposal could lead to the application of less advantageous rules on some members based on vaguely-defined concepts.  China welcomed the fact the EU was amending its Basic Regulation in response to the expiry of certain provisions of the 2001 China Accession Protocol and shifting away from non-market economy (NME) designation; nevertheless, the "significant distortion" concept means that more members will be affected, China said, adding that the draft amendments are inconsistent with WTO rules.

The EU said that it could not comment on the criticisms of members until the legislation has been formally adopted.  Once it has, the EU will notify the amended Basic Regulation to the WTO and respond to members' questions and comments.

Concerns raised on specific anti-dumping actions listed in semi-annual notifications

• Russia said it was deeply concerned about a Brazilian AD investigation on imports of Russian hot-rolled steel, which resulted in the finding of a 56% margin of dumping based on the use of "facts available".  Russia said Brazil breached several provisions of the ADA and called on Brazil to reconsider its findings.  Turkey expressed concern about Brazil's sunset review of an existing anti-dumping measure on imports of polyethylene terephthalate (PET) film and said that, given the low quantity of Turkish exports of PET to Brazil, revocation of the order won't lead to dumping or injury.
  
  Brazil responded that, in regards to Russian concerns, a verification team found sales of hot-rolled steel by Russian producers which were not reported to Brazilian investigators and that cost of production information from the Russian producers was not complete.  On PET, Brazil said the review investigation was still ongoing and invited Turkey to submit comments.  

• Laos PDR and Kazakhstan cited flaws in a Canadian investigation on imports of silicon metal from seven countries.  Lao PDR said that a decision to impose preliminary duties on Lao silicon metal imports violated various provisions of the ADA and that the decision to launch the investigation was based on insufficient evidence.  Kazakhstan said Canada's final dumping determination did not take account of factors which could have seriously affected the decision, and in particular certain information provided by the Government of Kazakhstan during the investigation.
  
  Canada replied that the complaint regarding dumped silicon metal was thoroughly examined and contained sufficient evidence of dumping and injury, or threat thereof.  Canada took note of the comments and said it was willing to discuss the issue bilaterally.

• Japan voiced concerns with two AD investigations initiated by India in October 2016, saying India failed to respect key ADA provisions on injury analysis and causation as well as treatment of confidential information.  Japan also questioned India's use of reference prices in its investigations.   Russia said India's dumping investigation into imports of ammonium nitrate was inconsistent with WTO norms; Russian producers participated in the investigation in good faith but were denied individual company duty margins, while the duties applied were above the margin of dumping, in violation of WTO rules.  Qatar questioned India's investigations on two products:  linear alkyl benzene and caustic soda.  Duties on the former were imposed last April despite a number of inconsistencies in the investigation, while for the latter, the petitioners failed to show that they were being injured by the imports.
  
  India replied that it appreciates the concerns expressed on the various actions.  It went on to explain in detail the reasoning behind the actions of its investigating authorities and assured Russia it was not imposing duties above the dumping margin.  India said it was open to bilateral discussion on the concerns raised.

• Japan voiced concerns with Korea's decision in June to extend AD duties on imports of steel beam following a sunset review, arguing that the measure, which has now been in place more than a decade, should have been terminated after 5 years, in accordance with WTO rules.  Ukraine questioned Korea's decision to extend provisional AD duties on imports of ferro-silico-manganese from Ukraine beyond a 4-month period mandated by the Agreement, absent a request from exporters.
  
  Korea responded that the sunset review on steel beam was carried out in a fair and transparent manner.  It also said it would discuss with Ukraine its concerns.

• Brazil questioned Turkey over its decision to launch an AD investigation on unbleached kraftliner paper from Brazil, arguing that the period for data used to make the injury determination was shorter than the minimum three years recommended by the AD committee (G/ADP/6); Turkey should terminate the investigation without imposing duties, Brazil argued.  Ukraine said Turkey was unfairly maintaining duties on imported copper wire rod more than 10 years after being imposed; the situation in Ukraine's domestic industry has changed drastically since then, and that in the absence of injury to Turkish producers the measure should be terminated.
  
  Turkey replied that the investigation on unbleached paper was launched in line with WTO rules but that it would take Brazil's concerns into account.  The review investigation on copper wire rod has been extended another six months but would still be completed in line with the deadline fixed in the ADA, Turkey said.

• Japan once again reiterated its complaint about longstanding AD duty orders imposed by the United States on imported Japanese goods.  Nineteen measures are still in place, including 6 that have been around more than 20 years.  Russia said it was concerned about a provisional US dumping determination on wire rod and said the provisional duties recommended lacked objectivity.  Korea once again hit out at what it said were excessive AD and countervailing duties resulting from the US use of "adverse facts available" in cases involving colour-coated, hot-rolled, cold-rolled steel sheets and steel plates from Korea.  It is impossible for Korean companies to avoid punitive duties when this methodology is applied, Korea said, adding that the US measures were inconsistent with WTO rules. Korea also condemned, again, the US Department of Commerce's  application of a "particular market situation" standard in a review of an AD order on imports of Korean oil country tubular goods (OCTG). China said that it has two concerns:  that the US honour its WTO obligation by terminating the use of the surrogate methodology in AD investigations by virtue of the expiry of certain provisions of the 2001 China Accession Protocol; and that the US still treats state-owned Chinese enterprises as single entities while denying them separate duty treatment in AD investigations.

The United States said it did not agree with Japan that, just because a measure was old, it was no longer justified; in any case, of the 64 measures applied to Japanese products that have been review, 51 were terminated.  For the rest, Japanese firms failed to meaningfully participate in the reviews. In regards to the Russian and Korean concerns, the US said the investigations were ongoing or subject to litigation and that it would therefore be inappropriate to comment at this stage.  Nevertheless, the US uses "adverse facts available" when an investigated firm refuses to cooperate, and the Commerce Department does look for available information rather than automatically accepting the duty rates demanded by the petitioners.  On China's concerns on the surrogate methodology, the US said it is inappropriate to respond at this stage as the matter is currently under litigation.

Notifications and use of AD measures

The chair of the committee, Mr. Faisal Saud Sulaiman Al-Nabhani  of Oman, noted that that a "significant number" of WTO members have failed to submit semi-annual reports on their anti-dumping actions for the first half of 2017.  47 members (the EU for its 28 member states) have submitted notifications so far, while eight members told the WTO that they took no AD actions during the first half of the year.

Japan noted that 163 AD duties were imposed in 2016 compared to 181 in 2015.  A wide number of members, including traditional users as well as emerging economies, have been resorting to these instruments in recent years.  The trend is due to overcapacity in sectors such as steel and aluminium which is caused by certain emerging markets expanding their production capacity in ways which did not reflect economic rationality, Japan declared.

Next meeting

The next meeting of the Committee on Anti-Dumping Practices will take place the week of 23 April 2018.