04 October 2017

European Parliament and European Council agreement: The EU is changing its anti-dumping and anti-subsidy legislation

The main change to the anti-dumping legislation is the introduction of a new way to calculate dumping in anti-dumping investigations on imports from members of the World Trade Organization (WTO) in case prices and costs are distorted because of state intervention.

What will be the new methodology for calculating dumping margins, and what countries will be affected?

For WTO members, the dumping margin is normally calculated under the standard rules mentioned above.However, domestic prices and costs can be distorted owing to state interference. In this case, they do not provide a proper basis to determine the comparison with the export price. Under the new methodology when it is not appropriate to use domestic prices or costs due to these distortions, other benchmarks reflecting undistorted costs of production and sale will be used. These could include benchmarks, or corresponding costs of production and sale including in an appropriate representative country with a similar level of economic development as the exporting country. This new methodology will allow the Commission to establish the actual magnitude of dumping where distortions exist.

There is no list of countries to which the new methodology applies – it will be used in dumping cases if significant distortions are found in the exporting country concerned which impact on prices and costs.

What type of state interference affects the reliability of prices and costs in an exporting country?

State interference can occur, for instance, when a market contains a large number of firms operating under the ownership, control or guidance of the authorities of the exporting country. It could also occur where there is a state presence in firms allowing for interference in prices or costs or pursuing policy objectives. Other examples are public policies discriminating in favour of domestic suppliers, or exporters' access to financing pursuing public policy objectives.

Under the new methodology can costs in the exporting country be used to calculate dumping?

Domestic costs in the exporting country are used where they are undistorted by state interference. The legislation ensures that there is no ambiguity: distorted costs will not be used in the new methodology. This was a primary concern in the drafting of the legislation.

How would the Commission decide if the economy of a country is distorted?

The Commission intends to prepare and issue reports describing the specific circumstances of the market in any given country or sector. These reports and the evidence on which they are based would become part of any anti-dumping investigation into that country or sector, and would be publicly available. EU industry could also use information from these reports when lodging a complaint or a request for review. [...]

Full press release

 

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