1. 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

2. 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.

3. 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.

4. 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…)

5. 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

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

7. 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)

8. 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

9. 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

10. 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

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

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

13. Stages of TDI proceedings:
Complaint
Initiation
Investigation
Imposition of measures

14. 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

15. 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

16. 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!

17. 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.

18. 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, , p. 13.)

19. 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 »

20. General information on TDI
TDI Information Contact Point (general questions)
A trip through our website: unfair-trade/trade-defence//