The Use of PRODCOM Data in Trade Defence Investigations EU Anti-dumping rules The Use of PRODCOM Data in Trade Defence Investigations Luxembourg – 26 November 2010 Piet Chalmet Head of Sector Unit H1 Directorate-General for Trade European Commission

European Commission External EU Trade DG Trade Internal EU Trade TDI - Directorate H Trade Defence Service Internal EU Trade DG Competition DG Enterprise DG Markt etc.

With globalisation comes an increase in trade With globalisation comes an increase in trade. But is competition between locally produced and imported goods taking place at fair conditions? Trade defence instruments (TDI) ensure fair conditions prevail. Albeit under strict conditions and in line with internationally agreed WTO rules.

What situations do TDI’s address? Imports into the EU from 3rd countries Imports of goods, NOT services Problems of all kinds of industries without exception (sectors, size…)

TDI : some figures EU opens ca. 20-25 new cases per year EU has ca. 140 measures in force Measures are normally imposed for 5 years EU is a very modest user of TDI, less than 1% of imports are affected

Three Trade Defence Instruments: Anti-Dumping Anti-Subsidy Safeguards

Anti-Dumping  Dumping is a practice of unlawful price discrimination The sales price of the product concerned exported to the EU market (say, €80) is lower than the normal value of the like product on the producer’s domestic market (say, €100) This implies price discrimination (in the example, dumping of €20 or 25% of the export price)

Anti-Dumping If dumped imports from a third country cause material injury to the Union industry, EU can take anti-dumping action against these imports. (e.g. duties) ca. 87% of EU TDI cases are AD cases

Anti-Subsidy Certain subsidies given by third countries confer an unfair benefit to their exporters over Union producers who may be materially injured. Such ‘illegal’ subsidies can be countered by anti-subsidy (‘countervailing’) measures. ca. 12% of EU TDI cases are AS cases

Safeguard measures are erga omnes Safeguards Under exceptional circumstances (sudden and significant increase in imports which cause serious injury to Union producers) EU may impose safeguard measures Safeguard measures are erga omnes ca. 1% of EU TDI cases are SFG cases

EU sectors most involved in TDI cases (1996 to 2009)

Third countries concerned by EU TDI cases(1996 to 2009)

Stages of TDI proceedings: Complaint Initiation Investigation Imposition of measures

EU Anti-dumping rules AD/AS investigations Industry-driven : Starting point = complaint EU producers Who can lodge a complaint ? EU Producers representing at least 25% of total EU production of the product concerned

Examination of “standing” EU Anti-dumping rules Examination of “standing” A specific test must be performed before initiation : the “standing test” It examines whether there is sufficient support for the initiation of an AD/AS investigation. Required by WTO and EU law : No standing = no case ! It contains two tests: the 25% test and the 50% test

Example: Total production in the EU of 100 units EU Anti-dumping rules Example: Total production in the EU of 100 units Producers expressing support produce 30 units Producers expressing opposition produce 20 units Silent or neutral producers produce 50 units 25% test: 30/100 = 30%  OK! 50% test: 30/50 = 60%  OK!

The standing test in practice DG TRADE contacts all known EU producers prior to initiation If all of them reply, numerator and denominator are known If partial replies, other data needed to establish total EU production. PRODCOM often only available source.

Example : fasteners from PRC « Since many producers in the Community, mostly small enterprises, did not cooperate(…) it was not possible to define precisely the total volume of Community production on the basis of individual company data. Consequently, the volume of Community production has been estimated by using Eurostat industrial production data. » (Council Regulation (EC) No 91/2009 imposing a definitive anti-dumping duty on imports of certain iron or steel fasteners originating in the People’s Republic of China, OJ L29, 31.1.2009, p. 13.)

Difficulties with PRODCOM data Matching CN codes with PRODCOM codes Confidentiality of MS data Reliability of figures difficult to check (especially if estimates are used) « Quantities sold »

General information on TDI TDI Information Contact Point (general questions) trade-defence-icp@ec.europa.eu A trip through our website: http://ec.europa.eu/trade/tackling- unfair-trade/trade-defence//