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.