EU Anti-dumping Research Articles

Non-Market Economies, Significant Market Distortions, and the 2017 EU Anti-Dumping Amendment

Anti-dumping is a fair trade mechanism of protecting domestic industries from certain underpriced imports. In December 2017, theEuropean Union made a remarkable amendment to its anti-dumping legislation to shift from a long-standing practice of specific dumping calculations for a pre-defined list of non-market economies to a ‘country-neutral’ approach of targeting significant market distortions. The new methodology requires the European Commission to use only prices and costs not influenced by substantial government interventions and to take account of some social and environmental dimensions in the anti-dumping process. Although the new methodology formally differs from the previous one, it is largely the same in addressing severe price distortions and being capable of inflating anti-dumping duties for affected products. In this article, we discuss major changes introduced by the 2017 amendment. While we agree with the earlier scholarly conclusions that the 2017 amendment is likely to fail to meet the World Trade Organization’s legal standards, we nevertheless justify the embedded anti-distortion policy as a reasonable way of making trade fairer and suggest taking proactive actions at the global level to render the new dumping methodology internationally acceptable.

A Study On the Less Duty Rule of EU Anti-Dumping Law

최소부과원칙(Lesser Duty Rule)이란 공동체 산업의 피해를 제거하기에 충분하다면 반덤핑관세액은 덤핑마진보다 적게 부과되어야 한다는 것이다. 즉 최소부과원칙은 비례의 원칙 중 두 번째의 하부명령인 필요성의 원칙을 잘 구현하려는 것이다. WTO 반덤핑협정에는 회원국 당국의 재량으로 인정되어 있지만 유럽연합의 경우에는 집행위원회(the Commission)가 반덤핑관세 부과시 의무적으로 최소부과원칙을 적용해야 하는 점이 다른 점이다. 그러나 문제는 최소부과원칙의 적용시 피해액 산정에 있어서 가장 중요한 구체적 기준을 현행 기본규칙에서는 명시하고 있지 않다는 점이다. 그리하여 유럽연합이 피해마진을 산정할 때 사용하고 있는 목표가격의 설정, 거래 대 거래 방식에서의 네거티브 제로잉의 사용 등이 WTO 반덤핑협정상 공정한 가격비교의 원칙에 위배되는 것은 아닌지가 문제되고 있다. 이것은 EU 당국이 최소부과원칙을 적용하였다고 할 지라도 최소부과원칙의 전제조건인 네거티브 덤핑을 제로잉하여 덤핑의 결과를 왜곡하면 피해액 산정도 따라서 왜곡되기 때문이다. 이러한 유럽연합의 최소부과원칙의 적용방식은 다음과 같은 문제점을 가지고 있다. 첫째로, 염가판매마진 방식으로 덤핑마진을 산정하면서 가상의 목표가격에 근거하여 적정한 이윤을 산출하므로 실제가격보다는 항상 높고 유럽연합 당국의 자의가 개입될 수 밖에 없다는 점이다. 둘째로, 유럽연합법원의 판례에 따른다고 할지라도 피해마진을 산정하는데 전제가 되는 적정한 이윤을 도출해내는 구체적인 기준을 제시하고 있지 않다는 점이다. 셋째로, 유럽연합 당국의 개별사건에서의 반덤핑조치 부과 규칙(regulation)에는 덤핑수입품이 없었다면 달성할 수 있었을 적정한 이윤율에 대해서는 명시하고 있지만, 적정한 이윤율을 산출해내는 구체적 근거에 대해서는 명시하고 있지 않아 그 산출 근거를 잘 알 수 없다는 점이다. 넷째로, 유럽연합은 EC 대 인도산 면화류 침대용품(Cotton-Type Bed Linen) 사건 이후 덤핑마진 산정시에는 더 이상 제로잉을 하지 않지만 피해마진 산정시에는 여전히 모델 제로잉 방식을 사용하여 제로잉하고 있어 문제가 될 소지는 있으나, 피해마진이 덤핑마진보다 작다면 이러한 피해마진을 반덤핑관세액으로 부과하여도 WTO 규정을 위배하는 것은 아니라는 점이다. 왜냐하면 덤핑마진을 초과하여 반덤핑관세액을 부과하지만 않으면 WTO 규범에 합치하기 때문이다. 이상의 문제점을 해결하기 위해서는 종국적으로는 WTO 차원에서 합리적인 피해인정 산정방식에 대한 규범화를 마련하여야 할 것이다.The Lesser Duty Rule is that the amount of the anti-dumping duty shall not exceed the margin of dumping established but it should be less than the margin if such lesser duty would be adequate to remove the injury to the Union industry. So the second sub-principle of the principle of proportionality, the principle of necessity is well given body to the Lesser Duty Rule in the EU Anti Dumping Law. But it is the problem whether the EU’s method in assessing the margin of injury i.e. setting up of target price, transaction to transaction method, negative zeroing in applying the Lesser Duty Rule is violating the principle of fair comparison in the WTO Anti Dumping Agreement or not. That is why the most important criteria in the calculation of amount of injury is not written in the Basic Regulation 2016/1036. The reason why is that firstly, the method of calculating the reasonable profit on the basis of target price while assessing the dumping margin by price underselling margin is always higher than the real price and leads to the EU institution’s arbitrary decision. Secondly, we don’t know the detailed grounds on the reasonable profit rate because the reasonable profit rate achievable without dumping products is stated in anti dumping regulation imposed by the European Commission but the detailed grounds on the reasonable profit rate is not in the regulation. Thirdly, the Court of Justice of European Union does not rule the concrete criteria about the reasonable profit in calculating the injury margin too. Fourthly, since EC-Cotton-Type Bed Linen from India case, EU does not do zeroing in calculating the dumping margin. But EU does zeroing in calculating the injury margin by model zeroing method. But it is not violating the WTO’s rule. The reason why is that if the injury margin is less than the dumping margin, the Commission is allowed to impose anti dumping duty the full margin of dumping or less under the WTO Rule. Ultimately, norms and standards shall be arranged in WTO level to find the reasonable method in calculating injury margin.

Do antidumping measures affect Chinese export-related firms?

We examine how the US and EU antidumping (AD) cases against Chinese firms affected their stock prices and long-term financial performance during 1995–2012, and whether the affected Chinese firms received more or less government subsidies in the subsequent years. Our findings indicate that AD news, especially the final decision on imposing antidumping measures, has significantly negative effects on the stock price of relevant Chinese export-related firms. There is also some limited evidence that the AD affected firms perform worse than their matched peers in terms of profitability. However, little empirical evidence reveals an increase in government subsidies given to AD affected firms after the imposition of AD duties, but we find a decrease in subsidies for non-SOEs.

The Vulnerability of EU Anti-Dumping Measures Against China after December 11, 2016

The purpose of this paper, first, is to serve as a reminder that the European Union will violate its WTO obligations under the WTO Anti-Dumping Agreement (ADA) if EU anti-dumping investigators continue to apply ‘non-market economy’ (NME) treatment of Chinese exports in AD investigations under Section 15 of China’s Accession Protocol (CAP) to the WTO and the EU Anti-Dumping Regulation (ADR) after December 11, 2016. Moreover, the ADR, “as such”, will be vulnerable to legal challenge in the WTO dispute settlement mechanism if it is not brought into compliance with the WTO AD Agreement by that date. These observations, however, do not prejudge the legality of EU anti-dumping measures – “as applied” - that the EU has (or will have) adopted against Chinese producers prior to the December deadline. The post-2016 legality of already existing EU anti-dumping measures that are “not based on a strict comparison with domestic prices or costs in China” is particularly relevant in context of the rising amount of new EU AD measures and investigations against Chinese producers of steel and solar panels that the EU has imposed and initiated in the last 2 years. It is this very question that is subject to analysis and discussion in the second part of this paper. The third part provides for a brief normative assessment of the systemic implications and legally viable alternatives to EU non-compliance with the WTO Anti-Dumping Agreement.

Why the EU Anti-dumping Practice to Adjust Inputs Costs in Situations Where Such Costs Are ‘Artificially Low’ Is Legitimate and Justified

Why the EU Anti-dumping Practice to Adjust Inputs Costs in Situations Where Such Costs Are ‘Artificially Low’ Is Legitimate and Justified

The Vulnerability of EU Anti-Dumping Measures Against China after December 11, 2016

The purpose of this paper, first, is to serve as a reminder that the European Union will violate its WTO obligations under the WTO Anti-Dumping Agreement (ADA) if EU anti-dumping investigators continue to apply ‘non-market economy’ (NME) treatment of Chinese exports in AD investigations under Section 15 of China’s Accession Protocol (CAP) to the WTO and the EU Anti-Dumping Regulation (ADR) after December 11, 2016. Moreover, the ADR, “as such”, will be vulnerable to legal challenge in the WTO dispute settlement mechanism if it is not brought into compliance with the WTO AD Agreement by that date. These observations, however, do not prejudge the legality of EU anti-dumping measures – “as applied” - that the EU has (or will have) adopted against Chinese producers prior to the December deadline. The post-2016 legality of already existing EU anti-dumping measures that are “not based on a strict comparison with domestic prices or costs in China” is particularly relevant in context of the rising amount of new EU AD measures and investigations against Chinese producers of steel and solar panels that the EU has imposed and initiated in the last 2 years. It is this very question that is subject to analysis and discussion in the second part of this paper. The third part provides for a brief normative assessment of the systemic implications and legally viable alternatives to EU non-compliance with the WTO Anti-Dumping Agreement.

Trade Diversion as Firm Adjustment to Trade Policy: Evidence from EU Antidumping Duties on Vietnamese Footwear

This paper evaluates the impact of the 2006 European Union antidumping action on Vietnamese footwear in three markets: imports to the EU, footwear producers in Vietnam, and the trade diversionary adjustment of Vietnamese firms in the U.S. market. We find that the AD action reduced Vietnamese footwear imports to the EU by as much as 65%. Given that the EU makes up almost two-thirds of Vietnam's footwear exports and footwear is among the top four export industries for Vietnam, this reduction is economically significant. Consistent with predictions of our model, we also find evidence of trade diversion by Vietnamese producers from the EU to the U.S. market. Our difference-in-difference estimates of the AD actions on the value of Vietnamese footwear imports to the U.S. ranged from 69-71% over the period 2004-2007 and 69-72% in terms of quantity. These results highlight the (perhaps unintended) indirect effects of trade policy in third markets that can result from firms adjusting to trade barriers. Our results are robust to triple difference specifications where we adjust for trend-differences and a series of placebo specifications.

The EU's Antidumping Actions Against Chinese Products

Abstract As the importance of tariffs in international trade has declined with the reduction of tariff rates under the GATT/WTO programs of multilateral trade liberalization, most governments prefer to protect domestic industries from foreign competitors through a variety of non-tariff barriers. Antidumping actions have recently become the world's biggest trade impediment due to their specific features and the antidumping activity of new users. Since China has become the major engine of world trade growth in recent years, it also has become the largest anti-dumping target in the world. However, the present world competition situation implies that world trade liberalization might arouse regional trade friction. The objective of this research is to identify whether China's WTO accession changed China's situation with regard to EU antidumping actions. The research analysis empirically proved that trade liberalization could partly affect the EU's antidumping actions against Chinese exports and the higher degree of industrial concentricity becomes a motive to increase the EU's antidumping activities against China.

Price Undertakings in EU Anti-dumping Proceedings – an Instrument of the Past?

Price undertakings are alternatives to imposing anti-dumping duties. In the past, almost half of EU anti-dumping measures were price undertakings. This has drastically changed in recent years. We identify four reasons for the decreasing relevance of price undertakings. First, prior to the accession of Eastern European Countries (EEC) to the EU, price undertakings were heavily used vis-a-vis EEC. At the same time, China became frequent subject of anti-dumping proceedings, where undertakings were rarely used due to monitoring issues. Second, unlike anti-dumping duties, price undertakings are often difficult to monitor and can be circumvented more easily. Third, there are reasons related to the suitability of price undertakings to remove dumping practice and injurious effects, particularly in the context of high price volatility. Fourth, price undertakings may have potentially anti-competitive effects, as minimum prices tend to exacerbate competition policies.

Determinants of the EU's Antidumping Measure against Korean products

Determinants of the EU's Antidumping Measure against Korean products

A Comparative Analysis of Reverse Majority Voting: The WTO's Dispute Settlement Mechanism, the EU Anti-Dumping Policy and the Reinforced SGP and Fiscal Compact

The reinforced Stability and Growth Pact entered into force in December 2011 with a new set of rules for economic and fiscal surveillance of the EU Member States. To strengthen the effective enforcement the SGP introduced the policy innovation of reverse qualified majority voting in the EU Council. Under reverse qualified majority voting the European Commission can impose a sanction on a Member State unless the Council votes against with a qualified majority within a specified period. This paper discusses the motivation and the impact of the new voting rule on EU Council decision-making and the Member States. It presents a comparative analysis of three cases where different types of reverse majority voting have been introduced, i.e. the dispute settlement mechanism of the World Trade Organisation, the EU trade defence policy and the reinforced SGP and Fiscal Compact. The comparison demonstrates that reverse majority voting considerably lowers the majority threshold to pass proposals rendering their adoption almost automatic in the EU Council of Ministers. As a result, the reverse majority rule increases the discretion of the executive relative to the legislative power. Moreover, evidence from the WTO’s dispute settlement and the EU’s antidumping policy suggests that the automaticity is also likely to change the balance between the rule- and political-based decision-making in the area of fiscal and budgetary EU policy. These findings chime with the growing role of majority-based decision-making in an enlarged EU of 27 Member States. However, the findings also highlight the potential trade-off between decision-making capacity and legitimacy particularly in an area considered to be traditionally part of the EU Member States’ national sovereignty.

The Effects of the U.S. And the Eu's Antidumping and Countervailing Duties on Korean Exports

The Effects of the U.S. And the Eu's Antidumping and Countervailing Duties on Korean Exports

Market Economy Treatment in EU Anti-dumping Investigations Following the Judgment of the Court of Justice of the EU in Xinanchem

If we are victorious in one more battle with the Romans, we shall be utterly ruined.

Book Review: EU Anti-Dumping and Other Trade Defence Instruments,5th edn by Van Bael & Bellis (Wolters Kluwer, 2011)

Book Review: <i>EU Anti-Dumping and Other Trade Defence Instruments</i>,5th edn by Van Bael &amp; Bellis (Wolters Kluwer, 2011)

Book Review: EU Anti-Dumping and Other Trade Defence Instruments, by Van Bael &amp; Bellis. 5th edn (Wolters Kluwer Law and Business, May 2011)

View Book Review: <i> EU Anti-Dumping and Other Trade Defence Instruments</i>, by Van Bael &#38; Bellis. 5th edn (Wolters Kluwer Law and Business, May 2011) by Yves Melin - Global Trade and Customs Journal

EU Lobbying and Anti-Dumping Policy

Lobbying in the EU is difficult to measure. It varies in intensity and modes of expression across different policy areas and EU countries. By looking at a specific EU policy area, this paper suggests to measure differences in the lobbying activity across EU countries by the combination of petitioning firms and Council voting in the case of anti-dumping (AD) policy. If the political position of countries in anti-dumping cases is influenced by domestic lobbying efforts, we expect that the empirical pattern of country distribution of petitioning firms in EU anti-dumping cases corresponds closely to the empirical pattern of EU country distribution in Council voting. Our results show a low petitioning intensity for anti-dumping investigations and a high voting intensity against anti-dumping measures in Northern Europe. Thus, it seems likely that domestic lobbying efforts have influenced the political position of countries in the special case of EU anti-dumping policy.

Lack of Transparency in the EU Anti-Dumping System: There is Only One True Solution

Quis custodiet ipsos custodes? It is a question that has been asked since the time of Plato and is still resonant today: Who will guard the guards themselves? Unfortunately, Plato's answer, They will guard themselves against themselves, is, at least with respect to the guardians of the European anti-dumping system (the EU Commission), rather a wishful thinking. This article calls for the Commission to stop making exaggerated claims about improved transparency (through such initiatives as an improved website) and instead implement a system that provides true transparency. It looks, briefly, at the examination process itself, shows how the over-zealous use of confidentiality restricts access to relevant data and to independent verification of conclusions reached by the Commission, and offers a solution to this problem.

No Protectionist Surprises: EU Antidumping Policy Before and During the Great Recession

This paper evaluates the European Union’s antidumping (AD) policy from 1995-2009 with a special focus on the 2008-9 crisis. Combining product-level data on AD cases with detailed import data, we fail to find clear signs of a major trade policy change since the outbreak of the crisis. Our findings suggest that the EU largely remained on its pre-crisis path of AD policy with an increasing share of products and more industries covered by AD measures. Moreover, EU AD policy has increasingly focused on China and other lower middle income countries as targets. Further findings suggest that the EU is more likely to impose protection against countries and country-industries that are similar in their product mix. Country-product combinations subject to a preferential tariff are also more likely to be targeted. In terms of product characteristics, we observe that especially the shares of consumer goods and differentiated goods covered by EU AD measures have increased rapidly, remaining at a relatively high level also during the crisis. The patterns we reveal do not appear to be driven by a few outlying countries but are also similar when considering imports of individual EU member states.

Where the EU Anti-dumping System Continues to Fail on Issues Relating to Transparency and Predictability

Since the beginning of 2008, when the Green Paper exercise launched at the end of 2006 by EU Trade Commissioner Peter Mandelson to review the EU’s trade defence instruments was withdrawn, the Commission has been very reluctant to discuss the idea of reform. However, recently the Commission has indicated that it might be willing to take a second look at selected areas that have faced criticism. In this article I examine some of the main areas where reform, from a perspective of importers and retailers, should be (and could be) achieved.

EU Anti‐dumping Measures against ASEAN Countries: Impact on Trade Flows*

In the present paper, anti‐dumping (AD) duties levied by the European Commission against products from ASEAN countries in the period 1991–2001 have been considered. The ASEAN countries were among the countries most targeted by AD measures imposed by the EU in the 1990s. A panel regression has been applied to estimate the impact of AD duties on trade in some 12 products that have been subject to AD duties targeting ASEAN countries in the period considered. A significant negative impact of AD duties is found, on both the value and the quantity of imports from ASEAN countries. Our estimation provides some (although not overwhelming) indications of trade diversion in favor of EU countries, but no evidence of trade diversion in favor of non‐targeted non‐EU countries.