The newAnti-dumping Metho-dology

Prof. Dr. Frank HoffmeisterVUB / HoU H 3

I. Origin

• Commisison proposal [COM 2016 (271)]of November 2016

• EP support June 2017 and Council agreementOctober 2017

• Entry into force of Regulation 2017/2321 on 20 December 2017

II. Structure

• If there are significant distortions in the countryof origin of the costs of production… (1)

• Then the Commission shall construct normal value ….

• By using alternative benchmarks for each cost ofthe relevant factors of production of theexporting producers (2).

III. Significant Distortions (1)

• All WTO countries (for non-WTO countries –analagoue country method, Art. 2 (7) BR)

• Specific Report on China adopted December 2017 (likely next report on Russia); industry can relyon that report (Art. 2 (6a) (d) BR)

• Complaints can also contain evidence on othercountries

III. Significant Distortions (2)

• Reported Prices or Costs, including for RawMaterials and Energy, are not the result of freemarket forces (Art. 2 (6a) (b) BR).

• 6 criteria (significant presence of SOEs on themarket; State presence in firms interfering withcosts and prices; public measures favouringdomestic suppliers or influencing free marketforces; lack or discriminatory application ofbankruptcy, corporate or property laws; distortedwage costs; access to preferential financing)

Significant Distortions (3)

• Criteria are not exhaustive

• Broad Discretion of the Commission

• First cases relate to China, based on theDecember 2017 report.

IV. Alternative benchmark (1)

• 3 sources (Art. 2 (6a) (a) BR) to identifyundistorted production costs, SG&A and profit.

• Appropriate representative country with a similarlevel of economic development

• Undistorted international benchmark• Domestic costs, if positively shown that they are

not distorted

IV. Alternative benchmark (2)

1. Appropriate representative country- Information must be "readily available"- World Trade Atlas; Orbis; ILO, World Bank: no

verification.- When several countries are eligible, COM should

chose the one with an adequate level of socialand environmental protection; Annex VIII of GSP Regulation as guiding aid.

- First examples: Turkey, Mexico, Thailand

IV. Alternative benchmark (3)

2. International benchmark

• Where there is a (undistorted) world price(commodities)

• E.g. London Metal Exchange; specialised data.• Undistorted international cost?

IV. Alternative benchmark (4)

3. Domestic costs

- Exporting producer (or government) must showevidence that there is no significant distortion; either country wide, or sector wide.

- COM may hear such a "defence" in theinvestigation if raised

V. Procedure (Art. 2 (6a) (e)

• China report on file as factual evidence upon initiation (37 days for GOC to comment)

• COM note to the file on factors of prodution andrepresentative country

• Comments by interested parties (10 days)• 2nd COM note to the file• Determination at provisional/definitive stage.

VI. First Practice

• 1. Expiry Reviews

- Aluminium Foil, Organic Coated Steel, Tube orPipe Cast Fittings, Ceramic Tableware, Tungsten Electrodes.

• 2. New (Article 5) Cases- Hot-rolled Sheet Steel Piles.

VII. Conclusion

• New Methodology is a compromise• It keeps alternative benchmarks in cases of

significant distortions• Innovation: country-report.• Rights of Defence of interested parties

safeguarded during the process.