TABLE OF CONTENTS

Executive summary. 5

1........... Overview of the legislation. 7

1.1........ Anti-dumping and anti-subsidy. 7

1.1.1..... The international framework. 7

1.1.2..... The EU legislation. 7

1.2........ Safeguards. 8

1.2.1..... The international framework. 8

1.2.2..... The EU legislation. 8

1.3........ Anti-subsidy and unfair pricing instrument for airline services. 9

2........... Basic concepts. 9

2.1........ Anti-dumping and anti-subsidy. 9

2.1.1..... What is dumping and what are countervailable subsidies - the material conditions for the imposition of duties? 9

2.1.2..... Procedure. 10

2.1.3..... Review of measures. 12

2.1.4..... Judicial reviews. 12

2.2........ Safeguards. 12

2.2.1..... What are safeguard measures?. 12

2.2.2..... Procedure. 13

3........... TDI Modernisation. 14

4........... Country-wide market economy status (MES) 15

4.1........ China. 16

4.2........ Vietnam.. 16

4.3........ Armenia. 16

4.4........ Kazakhstan. 16

4.5........ Mongolia. 17

4.6........ Belarus. 17

5........... Information and Communication activities / Bilateral contacts. 17

5.1........ Small and medium sized enterprises (SMEs) 17

5.2........ Bilateral contacts/information activities – industry and third countries. 17

6........... The Hearing Officer 18

7........... General overview of anti-dumping and anti-subsidy investigations and measures. 20

7.1........ New investigations. 20

7.2........ Review investigations. 21

8........... Overview of activities in 2011. 22

8.1........ New investigations. 22

8.1.1..... Initiations. 22

8.1.2..... Provisional measures. 23

8.1.3..... Definitive measures. 24

8.1.4..... Details on individual cases. 25

8.1.5..... Investigations terminated without measures. 32

8.1.6..... Details on some individual cases. 33

8.2........ Review investigations. 34

8.2.1..... Expiry reviews. 34

8.2.2..... Interim reviews. 41

8.2.3..... “Other” reviews. 44

8.2.4..... New exporter reviews. 45

8.2.5..... Absorption investigations. 45

8.2.6..... Circumvention investigations. 45

8.3........ Safeguard investigations. 47

9........... Enforcement of anti-dumping/countervailing measures. 47

9.1........ Follow-up of measures. 47

9.2........ Monitoring of undertakings. 48

10......... Refunds. 48

11......... Judicial review: decisions given by the Court of Justice / Court of First Instance. 48

11.1...... Overview of the judicial reviews in 2011. 48

11.2...... Cases pending. 48

11.3...... New cases. 48

11.4...... Judgments rendered by the General Court 48

11.4.1... Certain polyethylene terephthalate originating in India, Indonesia, Malaysia, the Republic of Korea, Thailand and Taiwan – T-167/07 – Far Eastern New Century Corp. v Council of the European Union – Judgment of 13 April 2011 (OJ 160, 28.5.2011, p. 15) 48

11.4.2... Cotton-type bed linen originating in Pakistan – T-199/04 – Gul Ahmed Textile Mills v Council of the European Union – Judgment of 27 September 2011 (OJ C 331, 12.11.2011, p. 15) 50

11.4.3... Ironing boards originating in the People’s Republic of China and Ukraine – T-274/07 – Zhejiang Harmonic Hardware Products v Council of the European Union – Judgment of 8 November 2011 (OJ C 370, 17.12.2011, p. 22) 50

11.4.4... Certain magnesia bricks originating from the People's Republic of China – T-423/09 – Dashiqiao v Council of the Europen Union – Judgment of 16 December 2011 (OJ C 32, 4.2.2012, p. 21) 51

11.5...... Judgments rendered by the Court of Justice. 52

12......... Activities in the framework of the World Trade Organization (WTO) 52

12.1...... Dispute settlement in the field of anti-dumping, anti-subsidy and safeguards. 52

12.1.1... Overview of the WTO dispute settlement procedure. 52

12.1.2... Dispute settlement procedures against the Union. 53

12.2...... Other WTO activities. 54

13......... Conclusion. 54

LIST OF ANNEXES. 56

Executive summary

This report is submitted to the European Parliament following its resolution of 16 December 1981 on the EU's anti-dumping activities[1], and the report of the European Parliament’s Committee on industry, external trade, research and energy[2].

This report, as in previous years, gives an overview of the EU legislation in force with regard to trade defence instruments, including safeguards.

The report also summarises the developments in general policy. As in previous years, the report no longer contains a commentary on each individual case. It gives an overview of all investigations together with the most essential information such as, for instance, the rate of individual duties imposed. In turn, cases which merit some special attention are treated in more detail. Consequently, the report is more factual and condensed and covers the essential facts of the year.

The detailed annexes which cover all cases ensure that the factual content of the report remains meaningful and sufficient to provide a full overview of the activity in 2011.

2011 saw a slight increase in the number of new cases initiated when compared to the previous year, 21 as compared to 18 in 2010. Regarding other activities, 2011 saw a decrease in the number of provisional measures imposed, 10 compared to 13 the previous year while the number of investigations terminated without measures increased slightly from 10 in 2010 to 11 in 2011. There was an increase in the number of definitive measures imposed up from 9 in 2010 to 13 in 2011.

As regards review investigations initiated, there was a drop from 31 in 2010 to 24 in 2011. These included 8 expiry reviews, 9 interim reviews, 2 new exporter reviews, 3 anti-circumvention investigations as well as 2 other reviews. In the period, 8 expiry reviews were concluded with confirmation of the measures and4 interim reviews were concluded with the measures being confirmed and/or amended.

There was no new safeguard investigation opened nor safeguard measures imposed during 2011.

As in previous years, this report continues to provide an overview on the Court cases relating to the trade policy instruments. In 2011, the Court of Justice (COJ) and the General Court (GC) rendered 9 judgments in total relating to the areas of anti-dumping or anti-subsidy.

2011 was the fourth full year of activity for the Hearing Officer in DG Trade, who became operational in April 2007. The main task of the Hearing Officer is to guarantee the full exercise of rights of defence in trade proceedings before the European Commission. In doing so the Hearing Officer also contributed to improved transparency in TDI activities.

With the aim of improving the efficiency and effectiveness of the EU's trade defence instruments, in 2011 DG Trade and launched a debate for the Modernisation of the trade defence instruments in October 2011. 2011 also saw the continued focus on the role of SMEs in trade defence investigations and how the particular problems they incur might be addressed. A paper was published in 2011 setting out concrete actions which could be taken to help overcome certain difficulties facing SMEs in the TDI process.

The European Parliament's INTA Committee continued to be informed about developments in the EU's trade defence activities.

The relevant activities in the framework of the World Trade Organisation (WTO) are also reported including dispute settlement procedures initiated against the EU. As regards WTO activity the report also updates the situation regarding the trade negotiations on the Anti-dumping and Subsidies Agreements.

The annexes to this report provide easy access to the activities in table form.

This report is also available to the general public with the following link.

Internet Website : http://ec.europa.eu/trade/tackling-unfair-trade/trade-defence/anti-dumping/

1. Overview of the legislation

1.1. Anti-dumping and anti-subsidy

1.1.1. The international framework

On an international level, unfair trading practices such as dumping and the granting of subsidies were identified as a threat to open markets as early as 1947, when the first GATT agreement was signed. The agreement contained specific provisions allowing GATT members to take action against these practices if they caused material injury to the domestic industry of a GATT member. Even though, the beginning of the disciplines dates back quite some time, world trade is currently still distorted by unfair practices, making the instruments still relevant.

Since the beginning, considerable efforts have been made to harmonise the rules relating to trade instruments. During the last GATT round (the « Uruguay Round ») which led to the creation of the WTO and the detailed Anti-Dumping and Anti-Subsidy Agreements, much of the attention was focused on the procedural and material conditions to be fulfilled before measures can be adopted. The EU played an active role in the negotiation of these relevant criteria which are reflected in its own legislation. The EU's role is the more so important today as a number of new users take action without the necessary rigor and restraint, affecting negatively also EU operators. The role the EU plays as a prudent user has therefore also an exemplary function at WTO level.

1.1.2. The EU legislation

The EU’s anti-dumping and anti-subsidy legislation was first enacted in 1968 and has since been modified several times. The current basic texts, which form the legal basis of anti-dumping and anti-subsidy investigations in the EU, entered into force in March 1996 and October 1997 respectively. These are in line with the Anti-Dumping and Anti-Subsidy Agreements adopted during the GATT/WTO negotiations. The basic texts are:

– Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European EU – Codified Version[3]

– Council Regulation (EC) No 597/2009 of 11 June 2009 on protection against subsidized imports from countries not members of the European EU – Codified Version[4].

These regulations will overall be referred to as the "basic Regulation(s)".

The EU legislation contains a number of provisions aimed at ensuring a balanced application of the EU’s Anti-Dumping and Anti-Subsidy rules on all interested parties. These provisions include the “EU interest test” and the “lesser duty rule”, which go beyond the WTO obligations.

The EU interest test is a public interest clause and provides that measures can only be taken if they are not contrary to the overall interest of the EU. This requires an analysis of all the economic interests involved, including those of the EU industry, users, consumers and traders of the product concerned. The EU interest test does not involve wider aspects such as foreign or development policy considerations.

The lesser duty rule requires the measures imposed by the EU to be lower than the dumping or subsidy margin, if such lower duty rate is sufficient to remove the injury suffered by the EU industry. Such a “no-injury” rate is determined by using the cost of production of the EU industry and a reasonable profit margin; it reduces the anti-dumping measures for individual exporting companies in almost half of the cases and is applied, on a world-wide level, only by the EU on a regular basis.

1.2. Safeguards

1.2.1. The international framework

The principle of liberalisation of imports was set under the GATT 1947 and strengthened under the 1994 WTO Agreements. As safeguard measures consist of the unilateral withdrawal or suspension of a tariff concession or of other trade liberalisation obligations formerly agreed, they have to be considered as an exception to this principle. Article XIX GATT 1994 and the WTO Agreement on Safeguards do not only impose strict conditions for the application of this "escape clause”, but also put in place a multilateral control mechanism under the WTO Committee on Safeguards.

Under WTO rules, safeguard action has to be viewed as a temporary defence measure that applies to all imports of the product covered by a measure, irrespective of origin. As regards non-WTO members, safeguard measures may be selective and apply to products originating in a specific country. WTO Accession Protocols may also provide for such selective safeguard mechanisms as is the case in the People's Republic of China's Protocol of Accession.

WTO safeguards should only be adopted after a comprehensive investigation which provides evidence of the existence of a) unforeseen developments leading to b) increased imports, c) the existence of a serious injury for EU producers and d) a causal link between the imports and the injury.

1.2.2. The EU legislation

The above-mentioned principles are all reflected in the relevant EU regulations, except for the “unforeseen development requirement” (which is not in the EU law but has been confirmed as a self-standing condition by WTO jurisprudence). Additionally, the adoption of measures in the EU requires an analysis of all interests concerned, i.e. the impact of the measures on producers, users and consumers. In other words, safeguard action can only be taken when it is in the EU’s interest to do so. The current EU safeguard instruments are covered by the following regulations:

– Council Regulation (EC) No 260/2009[5] on the common rules of imports – Codified Version

– Council Regulation (EC) No 519/94[6] on common rules for imports from certain third countries and repealing Regulations (EEC) Nos 1765/82, 1766/82 and 3420/83. This Regulation was amended in 2003 when a Transitional Product-Specific Safeguard Mechanism for imports originating in the People’s Republic of China was adopted[7]. This Regulation ensures that Council Regulation (EC) No 519/94 is no longer applicable to the People’s Republic of China;

– Council Regulation (EC) No 517/94[8] on common rules for imports of textile products from certain third countries not covered by bilateral agreements, protocols or other arrangements, or by other specific EU import rules.

These regulations will overall be referred to as the "basic safeguard Regulation(s)".

1.3. Anti-subsidy and unfair pricing instrument for airline services

Regulation No 868/2004[9] dealing with the effect of subsidisation and unfair pricing for air services from third countries which was adopted by the EP and the Council in 2004 requested the Commission to prepare a methodology to assess unfair pricing practices. This complex work, involving different services of the Commission as well as external experts, is on-going. The resulting methodology should be both derived from the significant EU experience in trade in goods and adapted to the highly specific sector of the air-services.

2. Basic concepts

2.1. Anti-dumping and anti-subsidy

2.1.1. What is dumping and what are countervailable subsidies - the material conditions for the imposition of duties?

2.1.1.1. Dumping and subsidies

Dumping is traditionally defined as price discrimination between national markets, or as selling below cost of production, plus profit. The EU’s anti-dumping legislation defines anti-dumping as selling a product in the EU at a price below its “normal value”. This “normal value” is usually the actual sales price on the domestic market of the exporting country. Therefore, a country is selling at dumped prices if the prices in its home market are higher than its export prices (i.e. price discrimination).

Where sales in the domestic market are not representative, for instance because they have only been made in small quantities, the normal value may then be established on another basis, such as the sales prices of other producers on the domestic market or the cost of production, plus profit. In the latter case, a company is selling at dumped prices if its export prices are below the cost of production, plus profit.

A certain segregation of the market, triggered by a variety of distortions, exists in the majority of the cases where dumping occurs on a more than incidental basis. That segregation may be caused, amongst other reasons, by government intervention. As a result, exporters are shielded, at least to a certain degree, from international competition on their domestic market.

Subsidies can have similar effects to sales at dumped prices in that they allow exporters to operate from a distorted home base. Subsidies involve a direct support from a government or a government-directed private body which has the effect of conferring a benefit to producers or exporters (e.g. grants, tax and duty exemptions, preferential loans at below commercial rates, export promotion schemes, etc.), all aimed at allowing the exporters to sell at low prices in the EU. Only subsidies which are “specific”, i.e. targeted at individual companies or certain sectors of the economy, can be subject to trade defence measures.

Both anti-dumping and anti-subsidy measures are thus only second-best solutions in the absence of internationally agreed and enforced competition rules.

2.1.1.2. Material injury and causation

For measures to be taken against these unfair trading practices, it is not sufficient that companies are exporting their products to the EU at dumped or subsidised prices. Measures can only be taken if these exports cause material injury to EU producers.

Typical indicators of injury are that the dumped and/or subsidised import volumes increase over a certain period and import prices undercut the sales prices of the EU industry. As a consequence, the latter is forced to decrease production volumes and sales prices thus losing market shares, making losses or having to make employees redundant. In extreme cases, exporters may try to eliminate viable EU producers by using a predatory, below cost, pricing strategy. In any event, the injury analysis requires that all relevant factors be taken into account before deciding whether the EU industry is in fact suffering “material injury”.

A further condition for the imposition of measures is the need for “a causal link”: the injury must be caused by the dumping or the subsidy. This condition is often fulfilled when the injury to the EU industry coincides with the increase in dumped and subsidised imports. It is important to note that the dumped or subsidised imports do not have to be the only cause of the injury.

2.1.1.3. EU interest

Finally, it has to be established whether there are compelling reasons according to which measures would be contrary to the overall interest of the EU. In this respect, the interests of all relevant economic operators which might be affected by the outcome of the investigation must be taken into account. These interests typically include those of the EU industry, users, consumers and traders of the product concerned and the analysis assesses the positive impact measures will have on some operators as opposed to the negative impact on others. Measures should not be imposed only if it can be clearly concluded that their negative impact would be disproportionate,.

2.1.2. Procedure

Investigations are carried out in accordance with the procedural rules laid down in the basic Regulations. These rules guarantee a transparent, fair and objective proceeding by granting significant procedural rights to interested parties. In addition, the results of an investigation are published in the Official Journal, and the EU is obliged to justify its decisions in this publication. Finally, it is ensured that each case is decided on its merits and the Commission does not hesitate to terminate a case if the conditions to impose measures are not met.

Whereas each investigation is different depending on the products and countries involved, all cases follow the same procedural rules. However, certain preferential rules apply to any candidate countries. The rules relating to a new case are summarised below.

Initiation

A case normally starts with a sufficiently substantiated complaint from the EU industry manufacturing the same or a similar product to the one referred to in the complaint. Then, the Commission assesses whether the complaint contains sufficient evidence to allow for the initiation of the case. A case is opened by a notice of initiation published in the Official Journal. In this notice, all interested parties, including users, exporting country authorities in anti-subsidy investigations in particular and, where appropriate, consumer organisations are invited to participate and co-operate in the proceedings. Detailed questionnaires are sent to producers in the exporting countries, in anti-subsidy investigations also to the exporting country authorities, and in the EU to the producers, traders (in particular importers) and other interested parties, such as users. These questionnaires cover all different conditions to be fulfilled, i.e. dumping/subsidy, injury, causation and EU interest. The parties are also informed that they can request a hearing and ask for access to the non-confidential files which will help them defend their case.

The investigation up to the provisional measures

Following receipt of the replies to the questionnaire, investigations are carried out by Commission officials at the premises of the co-operating parties.

The main purpose of these visits is to verify whether the information given in the questionnaires is reliable. The verified information is subsequently used to calculate or determine the dumping margin and the injury factors, in particular the price undercutting margin and injury elimination level, as well as for the EU interest analysis. The respective calculations and analysis often involve the processing of thousands of transactions, the complex examination of production costs and the assessment of the economic situation of numerous economic operators.

The results of the calculations and other findings are summarised in a working document, on the basis of which it is decided - after consultation of the Member States in the Advisory Committee - whether to impose provisional measures, whether to continue the investigation without proposing duties or whether to terminate the proceedings. In either eventuality, at this stage the decision is the Commission's responsibility.

The investigation up to the definitive stage

Following the publication in the Official Journal of a Commission regulation imposing provisional duties, interested parties which so request receive a full disclosure which allows them to verify the Commission’s findings and to submit comments. Comments can also be made at a hearing. These provisional submissions and comments are taken into account when a second, definitive, working document is prepared by the Commission.

After final disclosure, assessment of comments of interested parties and consultation of the Member States on the basis of the second working document, the Commission makes a proposal to the Council whether or not to impose definitive measures. Another possibility is that the Commission accepts undertakings offered by exporters, which undertake to respect minimum prices. In the latter case, no duties are generally imposed on the companies from which undertakings are accepted.

As set out above, throughout the process and at various specific steps, the procedure - consisting e.g. of requests for information, hearings, access to the file and disclosure – ensures that the rights of defence of interested parties are fully respected in this quasi-judicial process.

Unless the Council decides by a simple majority not to adopt the Commission proposal for definitive measures, such measures are imposed. The regulation imposing definitive duties, and deciding on the collection of the provisional duties, is published in the Official Journal.

In view of the findings made, it may also be decided to terminate a case without the imposition of measures. The same procedure (disclosure, comments, hearing, working document) as described above applies. The termination of the case would generally be made by a Commission Decision after consultation of the Member States.

Timing

The procedure described above is subject to strict statutory time limits. A decision to impose provisional duties must be taken within nine months of the initiation and the total duration of an investigation is limited to fifteen months in anti-dumping cases and to thirteen months in anti-subsidy cases. This leads to significant time constraints, taking into account, inter alia, internal consultations and the necessity to publish regulations and decisions in all EU languages at the same time.

Anti-dumping or countervailing measures will normally remain in force for five years, and may consist of duties or undertakings concluded with exporters. Measures are taken on a countrywide basis, but individual treatment, i.e. the application of a company-specific duty, can be granted to exporters which have co-operated throughout the investigation. During the five-year period, interested parties may, under certain conditions, request a review of measures or the refund of anti-dumping duties paid. Measures may also be suspended for a certain period, subject to given criteria.

2.1.3. Review of measures

The basic Regulations provide for administrative reviews and distinguish between interim reviews, newcomer reviews and expiry reviews.

The expiry review is initiated at the end of the five year life-time of the measures. Initiation of such a review requires a request by the EU industry evidencing that the expiry of the measures would lead to continuation or recurrence of dumping and injury. Since the amendment to the basic Regulations, expiry reviews initiated after 20 March 2004 are subject to strict deadlines, i.e. they shall normally be concluded within 12 months of the date of initiation of the review, but in all cases be concluded within 15 months.

During the five year life-time of measures, the Commission may perform an interim review. Under the latter procedure, the Commission will consider whether the circumstances with regard to subsidy/dumping and injury have changed significantly or whether existing measures are achieving the intended results in removing the injury. Since 20 March 2006, the deadline for concluding an interim review is set at 12 months, but no later than 15 months.

Finally, the basic Regulations provide that a review shall be carried out to determine individual margins for new exporters in the exporting country concerned. Since 20 March 2006, the deadline for conclusion of newcomer reviews is nine months.

During these reviews, the main procedural rules outlined in chapter 2.1.2 are also applicable.

2.1.4. Judicial reviews

The procedural rights of the parties, including hearings and access to non-confidential files, are respected in the course of the proceeding, and a system of judicial review is in place to ensure their correct implementation. The competence to review anti-dumping and anti-subsidy cases lies with the General Court and the Court of Justice in Luxembourg. Furthermore, WTO members may recourse to the WTO dispute settlement mechanism.

2.2. Safeguards

2.2.1. What are safeguard measures?

Safeguard measures allow temporary protection against the adverse effects of import surges. Under the EU legislation[10] implementing the WTO Safeguards Agreement, they can be applied under the following conditions: safeguard measures may be imposed if, as a result of unforeseen developments, a product is being imported into the EU in such increased quantities and/or on such terms and conditions as to cause, or threaten to cause, serious injury to EU producers of like or directly competitive products. Safeguard measures may only be imposed to the extent and for such time as may be necessary to prevent or remedy the injury.

2.2.2. Procedure

Investigations are carried out in accordance with the procedural rules laid down in the basic safeguard Regulations. These rules guarantee a transparent, fair and objective proceeding. In addition, the results of safeguard investigations are published in the Official Journal, and the EU is obliged to justify its decisions in this publication.

Initiation

The Commission is informed by one or more Member States should trends in imports of a certain product appear to call for safeguard measures. This information must contain evidence available, of the following criteria: a) the volume of imports, b) the price of imports, c) trends in certain economic factors such as production, capacity utilisation, stocks, sales, market share, prices, profits, employment, etc.. Where there is a threat of serious injury, the Commission must also examine whether it is clearly foreseeable that a particular situation is likely to develop into actual injury.

This information is immediately passed on by the Commission to all other Member States, at which stage consultations are held within the Advisory Safeguard Committee. If there is sufficient evidence to justify an investigation, the Commission publishes a notice of initiation in the Official Journal within one month of receipt of the information and commences the investigation, acting in co-operation with the Member States.

Provisional measures

Provisional measures may be imposed at any stage of the investigation. They shall be applied in critical circumstances where delay would cause damage which would be difficult to repair, making immediate action necessary, and where a preliminary determination provides clear evidence that increased imports have caused, or are threatening to cause, serious injury.

The duration of the provisional measures can, however, not exceed 200 days (i.e. six months).

Definitive measures

If, at the end of the investigation, the Commission considers that definitive safeguard measures are necessary, it will take the necessary decisions no later than nine months from the initiation of the investigation, at which stage the results of the investigation are being published in the Official Journal. In exceptional circumstances, this time limit may be extended by a further maximum period of two months, provided a notice is published in the Official Journal specifying the duration of the extension and a summary of its reasons.

Safeguard measures shall be applied only to the extent to prevent or remedy serious injury, thereby maintaining as far as possible traditional trade flows. As to the form of the measures, the EU will choose the measures most suitable in order to achieve these objectives. These measures could consist of quantitative quotas, tariff quotas, duties, etc.

Duration and review of the measures

The duration of safeguard measures must be limited to the period of time necessary to prevent or remedy serious injury and to facilitate adjustments on the part of the EU producers, but should not exceed four years, including the duration of the provisional measures, if any. Under certain circumstances, extensions may be necessary but the total period of application of safeguard measures should not exceed eight years.

If the duration of the measures exceeds one year, the measures must be progressively liberalised at regular intervals during the period of application. If the duration exceeds three years, the Commission should seek consultations with the Advisory Safeguard Committee in order to examine the effects of the measures, to determine the appropriateness of further liberalisation and to ascertain that the application of the measures is still necessary. Depending on the consultations, the measures may be revoked or amended.

3. TDI Modernisation

The Trade Commissioner's portfolio includes the mission of updating and modernising the current system of the EU's trade defence instruments (TDI).

The last substantial revision of these mechanisms was adopted in 1995, following the Uruguay Round of negotiations, and the Commission's services felt a need for an examination of their efficiency and effectiveness. Therefore DG Trade has started looking into the subject and launched a debate for the Modernisation of the trade defence instruments in October 2011.

In the first phase, when preparing the public consultation, the Commission services were inter alia drawing on the results of an evaluation study on the EU's trade defence (conducted by an external contractor and published in March 2012) but also on a number of interviews with experts in the field. Both those initiatives, jointly with DG Trade's experience in the daily administration of the instruments, allowed a broader comprehension of the practical issues and served as a basis for the preparation of the public consultation document. The public consultation, published in Spring 2012, aims at involving all stakeholders including producers, importers, exporters, business organisations, Member States in the process.

The ideas indentified and put forward in the public consultation have been grouped around 6 broader themes which are:

1. Further increase of transparency and predictability: Transparency and predictability are, for all stakeholders, of the utmost importance, not least because this will facilitate their planning and decision making. Therefore, improved transparency and predictability are top of the list of priorities in the modernisation process.

2. Fight against retaliation: Fear of retaliation is a serious and increasing obstacle to an effective use of trade defence instruments by EU industry. For example, authorities of exporting countries exercise undue pressure on European companies in order to prevent them from lodging anti-dumping or anti-subsidy complaints. Addressing this issue is of primary importance for the operation of the instruments.

3. Effectiveness and enforcement: TDIs are essentially directed against unfair trade while at the same time taking into account the interests of users. A number of investigation practices and rules could be further strengthened to improve the effectiveness of the instruments.

4. Facilitate cooperation: good quality investigations usually depend on the cooperation of interested parties. However, cooperation, in particular in the area of Union interest, is often very weak. DG Trade has already streamlined the information requirements and has screened procedural rules and the investigation schedule, in order to identify changes that could facilitate the cooperation of interested parties without compromising on the overall duration and quality of investigations.

5. Optimizing review practice: the review practice has been screened and a number of aspects have been identified which could be fine-tuned in order to better meet the objectives and purpose of reviews.

6. Codification: in order to make the EU legislation more clear or to make necessary amendments following ECJ or WTO jurisprudence some technical changes are also suggested.

After gathering the questionnaires submitted through the public consultation, the Commission will carry out an impact assessment. In this manner, it will addres all significant impacts on all stakeholders involved. Moreover, this would also explain if and why the EU needs a legislative proposal to modernise its trade defence instruments. Any Commission proposal will not be adopted before November/December 2012.

4. Country-wide market economy status (MES)

A normal anti-dumping investigation can only be conducted if costs and prices are reliable and the result of market forces. There are five criteria to determine whether a country can be considered a full market economy for the purpose of anti-dumping investigations (according to Article 2 (7) of the basis antidumping Regulation). These criteria are:

i. a low degree of government influence over the allocation of resources and decisions of enterprises, whether directly or indirectly (e.g. public bodies), for example through the use of state-fixed prices, or discrimination in the tax, trade or currency regimes;

ii. an absence of state-induced distortions in the operation of enterprises linked to privatisation and the use of non-market trading or compensation system;

iii. the existence and implementation of a transparent and non-discriminatory company law which ensures adequate corporate governance (application of international accounting standards, protection of shareholders, public availability of accurate company information);

iv. the existence and implementation of a coherent, effective and transparent set of laws which ensure the respect of property rights and the operation of a functioning bankruptcy regime;

v. the existence of a genuine financial sector which operates independently from the state and which in law and practice is subject to sufficient guarantee provisions and adequate supervision.

To obtain Market Economy Status for trade defence investigations all five criteria must be met.

2011 saw the continued evaluation of four of the six requests for country-wide MES from China, Vietnam, Armenia, Kazakhstan, Mongolia and Belarus. All countries, except Belarus and Armenia, continued to provide additional information in support of their claims throughout the year and their requests are at various stages of progress. In 2010 the consultations with the authorities of the Republic of Belarus were put on hold due to the political situation in the country and the situation remained unchanged in 2011. In June 2010 additional questions on further developments in their progress towards MES were sent to Armenia. However, by the end of 2011 still no new information had been sent to the Commission by the Armenian authorities.

Companies from these applicant countries have the possibility to request market economy treatment on an individual basis in the context of anti-dumping investigations.

4.1. China

China is undoubtedly the most important MES applicant country and the first of the six countries to have requested this status.

The first preliminary assessment was prepared in 2004 which concluded, at that time, that China fulfilled only one of the five MES criteria i.e. the second criteria outlined above.

At the working group meeting in Brussels in November 2011, both parties discussed China's progress in the area of Intellectual Property Rights and Anti-monopoly law. In 2011 the study on the accounting practices in the People’s Republic of China was finalised. As a result of the lack of cooperation by the Chinese authorities for this jointly agreed study, the results of the study were unfortunately only partial and insufficient to make sound conclusions on China's progress in this field.

The Commission will continue their evaluation in close cooperation with relevant Chinese's authorities.

4.2. Vietnam

The EU-Vietnam MES working group meeting took place in Brussels in December 2011. The Vietnamese authorities provided additional information to the Commission on the outstanding four criteria (Vietnam were considered to have fulfilled the first criteria above in 2010). Vietnam agreed to send additional information on issues raised during the meeting. However, by the end of 2011 no further information had been sent to the Commission by Vietnam. A third assessment report is expected in 2012.

4.3. Armenia

There was no progress on Armenia's MES request during 2011. The first assessment report on Armenia's MES request was transmitted to the Armenian authorities early in 2010. The report had concluded that Armenia made good progress in certain areas fulfilling two of the five criteria for MES, nos. i and v above. The Commission services followed this with a series of questions to the Armenian authorities in June 2010 in order to have information on further developments in their progress towards becoming a fully fledged market economy. However, by the end of 2011 no new information had been sent to the Commission from Armenia.

4.4. Kazakhstan

As a follow-up of DG Trade's assesment of Kazakhstan's progress towards fulfilling the market economy status criteria in 2010, a Note Verbale was sent to the Kazakhstan authorities setting out the main problems regarding the 5 MES criteria. Since then no reaction was received from the Kazakstani authorities. While it was agreed already in 2010 to jointly develop a road map setting out the next steps to be taken on MES, no progress on such a map was made in 2011. The Commission remains committed to developing such a road map once the Kazakhstan authorities consider it timely to do so.

4.5. Mongolia

At the end of 2010 the Commission sent questions to the Mongolian authorities, in order to make further progress on the MES assessment report. Information was submitted by the Mongolian authorities in Spring 2011 and a working group meeting took place in Ulan-Bator in September 2011 to verify the replies received and clarify outstanding issues. Work continued on this file during 2011 including the ongoing collection and analysis of data.

4.6. Belarus

In 2011 no progress was made on the MES file. The Commission had decided already in 2010 to put the consultations with the authorities of the Republic of Belarus on hold due to the political situation in the country. As soon as the situation in Belarus changes the Commission is ready to continue the MES analysis.

5. Information and Communication activities / Bilateral contacts

5.1. Small and medium sized enterprises (SMEs)

In 2011, the Commission published the "Paper on Actions to Address the Difficulties Encountered by SMEs Involved in Trade Defence Instruments". It contains a number of concrete actions which could be easily implemented to better assist SMEs in all areas of trade defence and on which a certain degree of convergence could be achieved with Member States. This paper, which was based on the results of the study carried out by an independent contractor in 2010, was discussed with, and approved by, the Member States in 2011. The objective of the study was to identify the needs of SMEs in the 27 EU Member States when submitting a complaint or participating in trade defence investigations as an importer or user or as an exporter in investigations initiated by third countries. The study had been launched by the Commission given the important role that SMEs have in the EU's economy and the difficulties they face in participating in trade defence investigations.

The Trade Defence Helpdesk for SMEs was set up in December 2004 in view of the complexity of TDI proceedings, especially for SME's, because of their small size and their fragmentation. Its role is to address specific SME questions and problems regarding TDIs, both of a general nature or case-specific. A part of the TDI website is dedicated to SMEs, and refers to the Trade Defence Helpdesk contact points.

In 2011 these contact points received many requests for information, from importers, exporters and potential complainants/applicants. The number of queries remained overall stable in comparison to the previous year. These requests, which were all dealt with promptly, concerned both the procedures and substance of TDI proceedings.

5.2. Bilateral contacts/information activities – industry and third countries

Explaining the legislation and practice of the EU's trade defence activity is an important part of the work of the TDI services.

There were several meetings with key stakeholder associations and companies in 2011, including with Business Europe and Eurocommerce.

A seminar on trade defence for officials from third countries took place in 2011. In addition, there were a number of bilateral contacts dedicated to discussing various trade defence related topics with a number of third countries including China, Korea, Turkey and Australia held in 2011.

6. The Hearing Officer

The principal task of the Hearing Officer is to safeguard the effective exercise of rights in trade proceedings before the European Commission. The rights of defence include not only the right to be heard and to have access to the file but comprises a wider set of rights described in the EU Charter of Fundamental Rights as follows: the right of every person (i) "to be heard, before any individual measure which would affect him or her adversely is taken", (ii) "to have his or her affairs handled impartially, fairly and within a reasonable time" and (iii) "to have access to his or her file, while respecting the legitimate interests of confidentiality and of professional and business secrecy". The Hearing Officer shall advise the member of the Commission responsible for trade policy and where appropriate the Director General concerning the follow-up of his recommendations and, when necessary, on possible remedies.

The Hearing Officer acts independently and is now attached, for administrative purposes, to the Commissioner for Trade. In 2011, the Hearing Officer was attached to the Director General of DG Trade.

The formal mandate of the Hearing Officer was published early in 2012[11].

In 2011 the Hearing Officer had 81 interventions in 35 trade defence cases and held 26 hearings out of which 4 were joint hearings of parties with similar interests. The interventions were requested by exporting producers in third countries, by the Union industry, by users and importers as well as by Governments of third countries. He intervened on issues covering all stages of the investigation and made a number of recommendations to the Commission services with the aim of strengthening the rights of defence. The recommendations of the Hearing Officer were largely followed in 2011.

The main issues that the Hearing Officer faced in 2011 can be grouped in three categories (i) content and quality of disclosure (ii) access to files and quality of non-confidential files and (iii) disagreement with determinations, findings and conclusions.

Content and quality of disclosures

The content and quality of disclosure remains one of the major subjects of intervention requests. The Hearing Officer continued to recommend that the Services provide, as detailed and as early as possible, disclosure documents in order to enable the parties to exercise effectively their rights of defence. Where parties complained about insufficient analysis of arguments and submissions, the Hearing Officer ensured that the matter was addressed in detail in an additional disclosure or in the relevant Regulation. Interventions relating to requests for additional disclosure of specific data and figures are usually complex and aim at finding an adequate balance between the obligation of the Commission not to divulge business secrets and the right to information of interested parties. In cases where the risk of breaching confidentiality rules by disclosing more was considered too high, the Hearing Officer ensured that the methodology used to arrive at the findings was explained in detail. In some cases, the Hearing Officer reviewed the confidential information and calculations in order to give the party additional assurance regarding the findings.

Access to files – Quality of non-confidential files

In principle, all interested parties involved in an investigation are allowed access to the non-confidential file. In some cases, parties questioned the meaningfulness and completeness of the non-confidential file and requested the Hearing Officer's intervention. The requests mainly related to the quality of non-confidential summaries of complaints or questionnaire replies and to the need to apply consistent rules to all parties. The Hearing Officer observed improvements in the overall quality of the files after his interventions.

Another matter of concern was the requests for confidential treatment regarding the identities of interested parties. These requests were based on to fears of commercial retaliation and subsequent complaints by other parties alleging infringement of their rights of defence due to insufficient evidence of retaliation. Such requests decrease transparency and may prevent other interested parties from submitting arguments in their defence, which they would have otherwise submitted. However, the Hearing Officer recognizes that alleged retaliation is of such nature that compelling evidence of its existence may not be obtainable. A recent WTO Appellate Body Report concluded that this issue has to be assessed on a case by case basis regarding the kind of supporting evidence which can be considered sufficient for treating the complainants' identity confidential. The Report also confirmed the consistency of the EU practice with WTO rules in that particular case. The Hearing Officer therefore recommended the Commission Services in a particular case to encourage parties to explain and substantiate their claim for confidential treatment of their identity in detail and to address the issue comprehensively in the disclosure document and in the Regulation.

Disagreement with determinations, findings and conclusions

In a number of cases parties disagreed either with certain determinations, e.g. the initiation of a case; objected the Commission's findings and conclusions, such as the selection of a sample, MET-decisions declaring parties as non-cooperating or the definition of the Union industry. The Hearing Officer organised hearings, ensured that parties were fully informed about procedural rules and that comments and arguments of the parties were heard and replied to in the disclosure document and the Regulation. Some cases were terminated or findings were modified as a result of the arguments put forward.

SME Policy

As a result of a study carried out in 2010 on how to assist SMEs in – inter alia - trade defence investigations a set of concrete measures was identified. One of these measures was to include in the Hearing Officer's report a section describing the problems related to SMEs for which his intervention was requested and the solutions that were eventually found.

In 2011, SME related problems appeared in one case in which numerous SMEs were affected as users and downstream users of the product under investigation. Many of these companies did not register in time as interested parties since they became aware of the proceeding only when provisional measures were imposed. It was argued that this is a particular problem of SMEs since these companies often do not have the adequate resources and capabilities to actively follow TDI issues and therefore fail to make themselves known in time and cooperate in the proceeding. The Hearing Officer agreed to hear all the companies that came forward and conducted two joint hearings. All parties were satisfied with the open approach but the fundamental problem described by the companies remained unsolved. The nature of the problem requires identifying SMEs as early as possible in the proceeding. The Hearing Officer therefore considers two of the other measures which have been identified as crucial, (i) the readiness of the Commission Services to endeavour identifying SMEs involved in TDI investigations and (ii) the intention to foster the role of Member States as 'interface' by an increased focus on SMEs within the ministerial departments dealing with TDI.

In addition, the Hearing Officer encourages all parties to identify themselves as SMEs when contacting the Hearing Office or the investigation services.

7. General overview of anti-dumping and anti-subsidy investigations and measures

The number of new investigations initiated in 2011 increased in comparison to the previous year, 21 compared to 18. The number of definitive measures imposed increased by more than one third while the number of provisional measures imposed in 2011 decreased by almost a quarter compared to 2010. Below are details on new investigations and review investigations.

7.1. New investigations

At the end of 2011, the EU had 117 anti-dumping measures and 10 countervailing measures in force[12]. The anti-dumping measures covered 62 products and 27 countries (see Annex O); the countervailing measures covered 6 products and 7 countries (see Annex P). Of the measures, the large majority was in the form of duties; however, in a number of cases, undertakings were accepted.

Of the 117 anti-dumping measures in force at the end of 2011 the main countries affected were China (53), India and Thailand (7 each), Ukraine Russia and Taiwan (5 each), Indonesia, Korea and Malaysia, (4 each) and Belarus, and USA (3 each). Of the 10 anti-subsidy measures in place the majority concern imports from India – 5 in total, with imports from China, Iran, Pakistan, United Arab Emirates, USA and Canada (1 each).

Regarding the anti-dumping measures one has to look at the trade volume of the products concerned, which varies considerably depending on the sector concerned. The largest trade volumes are often generated by high technology, such as electronics, which are high-value products. It should be noted that in 2011, only 0.25%[13] of total imports into the EU was affected by anti-dumping or anti-subsidy measures. Table 1 below provides statistical information on the new investigations for the years 2007 – 2011.

TABLE 1

Anti-dumping and anti-subsidy new investigations

during the period 1 January 2007 - 31 December 2011[14]

|| 2007 || 2008 || 2009 || 2010 || 2011

Investigations in progress at the beginning of the period || 33 || 20 || 26 || 25 || 24

Investigations initiated during the period || 9 || 20 || 21 || 18 || 21

Investigations in progress during the period || 42 || 42 || 47 || 43 || 45

Investigations concluded : - imposition of definitive duty or acceptance of undertakings - terminations[15] || 12 10 || 16 3 || 11 11 || 9 10 || 13 11

Total investigations concluded during the period || 22 || 19 || 22 || 19 || 24

Investigations in progress at the end of period || 20 || 26 || 25 || 24 || 21

Provisional measures imposed during the period || 12 || 5 || 10 || 13 || 10

7.2. Review investigations

Anti-dumping measures, including price undertakings, may be subject, under the basic Regulation, to five different types of reviews: expiry reviews (Article 11(2)), interim reviews (Article 11(3)), newcomer investigations (Article 11(4)), absorption investigations (Article 12) and circumvention investigations (Article 13).

Also anti-subsidy measures may be subject, under the basic Regulation, to five different types of reviews: expiry reviews (Article 18), interim reviews (Article 19), absorption investigations (Article 19(3)), accelerated reviews (Article 20) and circumvention investigations (Article 23).

These reviews continue to represent a major part of the work of the Commission's TDI services. In the period from 2007 to 2011, a total of 153 review investigations were initiated. These review investigations represented 63% of all investigations initiated in that period.

In 2011, 24 reviews were initiated. Of these, 8 were expiry reviews, 9 interim reviews, 2 newcomer reviews, 2 other reviews and 3 circumvention investigations.

An overview of the review investigations in 2011 can be found in Annexes F to K. Table 2 provides statistical information for the years 2007 – 2011.

TABLE 2

Reviews of anti-dumping and anti-subsidy investigations

during the period 1 January 2007 - 31 December 2011[16]

|| 2007 || 2008 || 2009 || 2010 || 2011

Reviews in progress at the beginning of the period || 52 || 46 || 32 || 33 || 34

Reviews initiated during the period || 41 || 23 || 34 || 31 || 24

Reviews in progress during the period || 93 || 69 || 66 || 64 || 58

Total reviews concluded during the period[17] || 47 || 37 || 33 || 30 || 37

Reviews in progress at the end of the period || 46 || 32 || 33 || 34 || 21

8. Overview of activities in 2011

8.1. New investigations

8.1.1. Initiations

In 2011, 17 new anti-dumping investigations, 4 new anti-subsidy investigations and no safeguard investigations were initiated in the period. The anti-dumping investigations involved 14 different products from 9 different countries. The anti-subsidy investigations involve 3 products from 4 different countries. Details of these investigations are given in Annex A. The country most affected by the anti-dumping investigations is China with 8 investigations, India 2 investigations and 1 investigation each opened concerning Belarus, Kazakhstan, Oman, Russia, Saudi Arabia, Turkey and U.S.A.. The main sector concerned by these new cases is chemicals.

In the five-year period from 2007 to 2011, 89 investigations were initiated on imports from 22 countries. The main sectors concerned by the investigations included iron and steel – 30 investigations, chemical and allied - 29 investigations, , other metals – 6 investigations and electronics - 3 investigations, wood and paper – 2 investigations, other mechanical engineering – 2 investigations. A breakdown of the product sectors is given in Annex B(A).

The main countries concerned during the period from 2007 to 2011 include the People's Republic of China with 37 investigations, India 8, USA 7, Thailand 4, Belarus,Turkey and Malaysia with 3 each, Bosnia & Herzegovina, Iran, Korea, Oman, Pakistan, Russia, Saudi Arabia, Taiwan and U.A.E. with 2 each Armenia, Brazil, Indonesia, Kazakhstan, Moldova and Ukraine with 1 each. A table showing all the investigations initiated over the last five years broken down by country of export is at Annex B(B).

The list of cases initiated in 2011 can be found below, together with the name of the complainant. More information can be obtained from the Official Journal to which reference is given in Annex A.

Product || Country of origin || Complainant

Oxalic acid || India P.R. China || European Chemical Industry Council (CEFIC)

Polyethylene terephthalate (PET) || Oman Saudi Arabia || Committee of Polyethylene Terephthalate (PET) Manufacturers in Europe (CPME)

Sodium cyclamate || P.R. China || Productos Aditivos SA

Soy protein products (certain concentrated) || P.R. China || Solae Europe S.A.

Stainless steel fasteners || India || European Industrial Fasteners Institute (EIFI)

Seamless pipes and tubes of iron or steel (certain) || Belarus || Defence Committee of the seamless steel tubes industry of the EU

Woven and/or stitched glass fibre fabrics || P.R. China || Glass Fibre Fabrics Defence Coalition (GFFDC)

Tartaric acid || P.R. China || Distillerie Bonollo SpA, Industria Chimica Valenzana SpA, Distillerie Mazzari SpA, Caviro Distillerie S.r.l. and Comercial Quimica Sarasa s.l.

Aluminium radiators || P.R. China || International Association of Aluminium Radiator Manufacturers Limited Liability Consortium (AIRAL S.c.r.l)

Tube and pipe fittings of iron or steel || Russia Turkey || Defence Committee of the Steel Butt-Welding Fittings Industry of the European Union

Bioethanol || U.S.A. || ePure

White phosphorous || Kazakhstan || Thermphos International BV

Aluminium foil || P.R. China || Eurometaux

Organic coated steel products || P.R. China || Eurofer

Polyethylene terephthalate (PET) (AS) || Oman Saudi Arabia || Committee of Polyethylene Terephthalate (PET) Manufacturers in Europe (CPME)

Stainless steel fasteners (AS) || India || European Industrial Fasteners Institute (EIFI)

Bioethanol (AS) || U.S.A. || ePure

8.1.2. Provisional measures

In 2011, provisional duties were imposed in 10 anti-dumping proceedings. There were no provisional anti-subsidy measures imposed. The AD measures involved imports of 7 products and covering 6 countries. As shown in Table 1 (see point 7.1), this figure compares to 13 provisional measures imposed in 2010 and 10 in 2009.

The list of cases where provisional measures were imposed during 2011 can be found below, together with the measure(s) imposed. More information can be obtained from the Official Journal to which reference is given in Annex C.

Product || Originating from || Type[18] and level of measure

Ring binder mechanisms || Thailand || Ad Duty of 17.2%

Glass fibres (certain open mesh fabrics) || P.R. China || AD duties ranging from 48.4% – 62.9% All others rate 62.9%

Ceramic tiles || P.R. China || AD Duties ranging from 26.2% - 36.6% Co-operating companies not in sample 32.3% All others rate 73%

Fatty alcohols and their blends || India Indonesia Malaysia || AD Duties ranging from 4.8% - 9.3% AD Duties ranging from 4.3% - 6.3% Other rate 7.6% AD Duties ranging from 5 – 5.3% Other rate 13.8%

Seamless pipes and tubes of stainless steel || P.R. China || Ad Duties ranging 48% - 71.5% Co-operating companies not in sample 56.6% All others 71.5%

Vinyl acetate || U.S.A. || AD Duties ranging from 12.1% - 13.8% All others 13.8%

Oxalic acid || India P.R. China || AD Duties 22.8% others rate 43.6% AD Duties ranging from 14.6% - 37.7%; All others rate 52.2%

8.1.3. Definitive measures

During 2011, definitive duties were imposed in 11 anti-dumping investigations and 2 anti-subsidy cases. They involved imports from 6 different countries and covered 10 products. The People’s Republic of China featured with 6 anti-dumping measures and 1 anti-subsidy measure, with Bosnia and Hertzegovina, Thailand, Indonesia, and Malaysia with 1 anti-dumping measure each and India with 1 anti-dumping and 1 anti-subsidy measure.

The list of cases where definitive measures were imposed during 2011 can be found below, together with the measure(s) imposed. More information can be obtained from the Official Journal to which reference is given in Annex D.

Product || Originating from || Type[19] and level of measure

Continuous filament glass fibre products || P.R. China || AD – Duty of 7.3% - All others rate 13.8%

Melamine || P.R. China || AD duty: Minimum import price. All others rate: EUR 415/tonne

Zeolite A powder || Bosnia and Herzegovina || AD duty of 28,1%

Coated fine paper || P.R. China || AD/CVD duties of 20%-39,1% All other companies 39,1%

Glass fibres (certain open mesh fabrics) || P.R. China || AD duty of 48,4%-62,9% All other companies 62,9%

Ring binder mechanisms || Thailand || AD duty of 16,3%

Ceramic tiles || P.R. China || AD duty of 26,3%-36,% All other companies 69,7%

Fatty alcohols and their blends || India Indonesia Malaysia || AD duty of 35,19%-61,01% All other companies 61,01%-86,99%

Stainless steel bars || India || CVD duty of 3,3%-4,3% All other companies 4,3%

Seamless pipes and tubes of stainless steel || P.R. China || AD duty of 48,3%-71,9% All other companies 71,9%

8.1.4. Details on individual cases

Zeolite A powder originating in Bosnia and Herzegovina

The investigation was initiated in February 2010 following a complaint lodged by Industrias Quimicas del Ebro SA, MAL Magyar Aluminium, PQ Silicas BV, Silkem d.o.o. and Zeolite Mira srl Unipersonale representing the EU industry. The investigation period ('IP') ran from 1 January 2009 to 31 December 2009 and injury was considered over the period 1 January 2005 to the end of the IP. The product concerned was zeolite A powder, also referred to as zeolite NaA powder or zeolite 4A powder. Provisional anti-dumping duties were imposed in November 2010.

Dumping

In the absence of representative domestic sales the normal value was constructed. To construct the normal value, the selling, general and administrative (SG&A) expenses incurred and the weighted average profit realised by each of the cooperating exporting producers on domestic sales of the like product, in the ordinary course of trade, during the investigation period, was added to their own average cost of production during the investigation period. Since all exports to the Union were made via a related importer, the export price was also constructed. This was done on the basis of the resale price to independent customers. In the absence of cooperation by unrelated importers in the investigation, a reasonable profit margin of 5 % was used, based on information obtained from users who also imported the product concerned in the IP. The comparison between normal value and export prices was made on an ex-works level with allowances being made for certain costs including transport, freight and insurance costs, bank charges, packing costs and credit costs. This resulted in a dumping margin of 28,1%.

Injury

Sampling was applied to the EU producers with the five largest companies being selected for the sample. Imports of Zeolite A increased by 359 % between 2005 and the IP, resulting in an increase in market share from below 5% to between 10-15% in the same period. The prices of the dumped imports were found to undercut the European producers by between 20-25%.

During the period used to assess injury, all indicators on the situation of the EU industry decreased, such as production (-14%), capacity utilisation (-14%), sales volume (-18%), market share (-11%) and productivity (-14%). Profitability, cash flow, and return on investment all deteriorated over the period 2005-2008. 2008 was a particularly serious year for the industry mainly because the companies lost more than 20 % of their sales volume. In 2009 the market situation eased and prices increased enabling an improved profitability situation but it was temporary and unlikely to be repeated. In 2009 the profitability rate did not reach the 5,9% deemed as a normal profit for this industry. It was therefore concluded that there was evidence of injury to the EU industry.

Causation

The coincidence in time between the surge of dumped imports and the deterioration in the situation of the EU industry was found to be a clear indication that the injury was caused by dumped imports. A number of factors other than the dumped imports were examined but none of these could explain the serious losses in market share, production and sales volume which occurred in 2008 and 2009.

EU Interest

The Commission carefully examined the interests of EU producers, importers and consumers in order to determine whether it was in the interest of the EU to impose measures. It was expected that the Union industry would clearly be in a position to benefit from measures since they could benefit from increased economies of scale because of a higher capacity utilization due to an increase in production and sales. In addition, it would not affect the Union users significantly so overall it was considered to be in the Union interest.

Measures

Definitive measures were imposed on 11 May 2011, based on the level of the dumping found. In the course of the investigation, the exporting producers offered a price undertaking which the Commission accepted.

Coated fine paper originating in the People's Republic of China (AD)

The proceeding was initiated in February 2010 following a complaint lodged by CEPIFINE, the European association of fine paper manufacturers representing the EU industry. The investigation period ('IP') ran from 1 January 2009 to 31 December 2009 and injury was considered over the period 1 January 2006 to the end of the IP. The product concerned was coated fine paper ('CFP') which is paper or paperboard coated on one or both sides (excluding kraft paper or kraft paperboard), in either sheets or rolls, and with a weight of 70 g/m2 or more but not exceeding 400 g/m2 and brightness of more than 84 (measured according to ISO 2470-1), originating in the People's Republic of China ('PRC'). Provisional anti-dumping duties were imposed in November 2010.

Dumping

Since the two exporting groups that came forward represented the total exports of the product concerned from the PRC to the Union, sampling was not necessary. Only one exporting producer group requested market economy treatment (MET) and both exporting producer groups claimed individual treatment (IT). MET was not granted but both groups were granted IT.

Given that none of the groups had been granted MET, the normal value was established on the basis of an analogue country, the USA. Where export sales to the Union were made through related trading companies outside the Union, the export price was established on the basis of the prices of the product when sold by the related trading companies to the Union, i.e. to an independent buyer. Where export sales to the Union were made through the one related trading company inside the Union, export prices were constructed on the basis of the prices at which the imported product was first resold to independent customers in the Union. The comparison between normal value and export price was made on an ex-works basis with adjustments made to take account of costs such as transport and insurance costs, credit costs, year-end rebates, commissions, quality claims and bank handling charges. This resulted in margins ranging from 43,5% to 63% for the companies granted individual treatment.

Injury

Given that only four Union producers came forward, representing 61% of total production, sampling was not necessary. The volume of total imports from the PRC increased dramatically, almost tripling over the period considered. As a result, their market share increased significantly from approx. 1 % in 2006 to over 4 % in the IP. This, against the background of decreasing consumption which dropped by 14 % during the same period. During the IP, the dumped product undercut the Union producers’ sales prices on average by 7,6 %.

The investigation has shown that most of the injury indicators such as production volume (– 20 %), capacity utilisation (– 10 %), sales volume to unrelated customers on the Union market (– 19 %), market share (– 5 percentage points) deteriorated during the period considered. In addition, the injury indicators related to the financial performance of the cooperating Union producers such as return on investment and profitability were seriously affected until 2008. While there was a sudden increase of the profitability in the IP, this was due purely to the temporary and exceptional drop of world pulp prices in the IP. It is noted that even during the IP the profitability rate was very low and was not considered to be altering the conclusion that the cooperating Union producers were in a very weak financial position. It was therefore concluded that there was evidence of injury to the EU industry.

Causation

The increase in volume and market share of the low-priced dumped imports from the PRC coincided with an overall decrease of the demand on the Union market and also with the negative development in the market share of the Union producers during the period between 2006 and the IP. At the same time a negative development in the main indicators of the economic and financial situation of the Union industry was observed. The effect of other factors was not found to be a cause of the injury suffered by the EU industry.

EU Interest

The Commission carefully examined the interests of EU producers, importers and traders, and users in order to determine whether it was in the interest of the EU to impose measures. It was expected that the imposition of provisional anti-dumping duties would restore effective and fair trade conditions on the Union market which would enable the Union industry to regain at least part of the market share lost. Imports, including imports from the PRC represented only a limited share of the importers' total business and any negative impact of the proposed measures was thus likely to be negligible. Even if some of the users were likely to be negatively impacted by the measures on imports from the PRC, the impact on the users in the two distinctive sectors (printers and publishers) appeared to be limited overall. It was therefore concluded that there were no compelling reasons against the imposition of measures on imports of CFP originating in the PRC.

Definitive Measures

Definitive anti-dumping measures ranging from 8% to 39,1% were imposed on 15 May 2011. They were based on the injury elimination levels as these were lower than the dumping margins found.

Ceramic tiles originating in the People's Republic of China

The proceeding was initiated in June 2010 following a complaint lodged by the European ceramic tiles manufacturer's Association (CET) representing more than 30% of the total Union production of ceramic tiles. The investigation period ('IP') ran from 1 April 2009 to 31 March 2010 and injury was considered over the period 1 January 2007 to the end of the IP. The product concerned was glazed and unglazed ceramic flags and paving, hearth or wall tiles; glazed and unglazed ceramic mosaic cubes and the like, whether or not on a backing. Provisional anti-dumping duties were imposed in March 2011.

Dumping

Due to the large number of Chinese exporters that came forward (105), sampling was applied. Three groups representing ten individual producers were selected accounting for 14,4% of exports from cooperating producers. Two groups of exporting producers in China requested market economy treatment ('MET') which was denied. The two groups that requested MET also requested Individual Treatment (IT) together with two other groups. Three of the four groups were granted IT. Eight producers also requested Individual Examination (IE) which was carried out for one exporting producer who also received IT.

Given that none of the groups had been granted MET, the normal value was established on the basis of an analogue country, the USA. The export prices of the sampled Chinese exporters were based on the export prices actually paid or payable, to the first independent customer. Where sales were made via a related importer in the Union, prices were constructed. The normal value and export prices were compared on an ex-works basis. Adjustments had been made to take into account differences in characteristics, for the lower cost of non-porcelain tiles, ocean freight, insurance, handling and ancillary costs, packing, credit, bank charges and commissions. This resulted in margins ranging between 26,3% and 67,7% for individual companies and 69,7% for all others.

Injury

Sampling was also applied to EU producers with ten companies being selected for the sample. Imports of ceramic tiles decreased by 3% over the period considered but the market share of Chinese imports increased by 35%. The level of undercutting ranged from 44 % to 57 %. During the period used to assess injury, all injury indicators such as production volume, capacity utilization, sales to unrelated customers and employment deteriorated. In addition, the injury indicators related to the financial performance of the Union producers – such as profitability, return on investments and cash-flow were seriously negatively affected during the period considered. Overall, the profitability deteriorated over the period considered. In fact, the segment of small companies which constituted half of the Union industry was loss making. Hence, it was concluded that there was evidence of injury to the EU industry.

Causation

The increasing market share of Chinese exporting producers over the period considered coincided in time with a decrease of the Union industry’s profits and a substantial increase of its stocks. The economic crisis and imports from third countries other than China had an impact on the situation of the Union industry but it was not such as to break the causal link established between the dumped imports from China and the material injury suffered by the Union industry.

EU Interest

The Commission carefully examined the interests of EU producers, importers and users in order to determine whether it was in the interest of the EU to impose measures. It was expected that measures would likely prevent a further surge of dumped, low-priced imports. Without measures the effect of depression of sales prices exerted by the dumped imports from China would continue to compress Union producers’ sales prices and profits. The financial situation and profitability of the Union industry was not strong enough to withstand further price pressure which would lead to the progressive demise of a large number of Union producers. It was expected that measures would, in all likelihood, have an impact on the importers' business but the investigation revealed that it was possible for importers and users to switch to products sourced from third countries or from within the Union. No consumer groups participated. It was concluded that there were no compelling reasons against the imposition of definitive measures on imports of the product concerned originating in the PRC.

Measures

Definitive measures, imposed on 15 September 2011 ranged from 26,3% to 36,5% for participating company groups, 10,6% for separate companies listed in Annex I of the Regulation and 69,7% for all other companies.

Certain seamless pipes and tubes of stainless steel originating in the People's Republic of China

The proceeding was initiated in September 2010 following a complaint lodged by the Defence Committee of the Seamless Stainless Steel Tubes Industry of the European Union representing more than 50% of the total Union production. The investigation period ('IP') ran from 1 July 2009 to 30 June 2010 and injury was considered over the period 1 January 2006 to the end of the IP. The product concerned was certain seamless pipes and tubes of stainless steel, other than with attached fittings suitable for conducting gases or liquids for use in civil aircraft. Provisional anti-dumping duties were imposed in June 2010.

Dumping

Due to the large amount of Chinese exporting producers who came forward (31) sampling was applied. Three groups were selected representing 25% of the total imports. All three sampled groups of exporting producers requested market economy treatment (‘MET’) or Individual treatment ('IT'). None of the groups were granted MET but they were all granted IT.

Given that none of the groups had been granted MET, normal value for the case was established based on prices actually paid or payable in the Union for the like product duly adjusted if necessary. In all cases the product concerned was exported to independent customers in the Union, and therefore, the export price was established on the basis of export prices actually paid or payable. The normal value and export prices were compared on an ex-works basis. Adjustments had been made to take into account indirect taxes, ocean freight and insurance, freight in the exporting country, warranty expenses, commissions, credit costs, bank charges, level of trade and quality perception. This resulted in margins ranging between 62,6% and 83,7% for individual companies and 71,1 % for all others.

Injury

Sampling was also applied to the EU producers with two groups representing five EU producers being selected for the sample. Imports of seamless pipes and tubes increased by 76% between 2006 and the IP resulting in an increase in market share from 10.5% to 18.4%. During the period used to assess injury, all injury indicators developed negatively. This was particularly noticeable for the indicators concerning profitability, production volumes, capacity utilisation, sales volumes and market share that have all showed a clearly deteriorating trend. At the same time, the imports from the PRC were undercutting Union industry prices by up to 32 % during the IP. It was therefore concluded that there was evidence of injury to the EU industry.

Causation

Imports from the PRC have increased in terms of quantities and gained substantial market share over the period considered.However, while the Union industry had been able to offset the negative effects of this pressure for a certain period thanks to the exceptionally positive market conditions in the years of 2007 and 2008, this was no longer possible when the economic crisis substantially reduced the level of demand. A number of factors other than the dumped imports were examined but none of these could explain the serious losses in market share, production and sales volume which occurred in 2008 and 2009 which coincided with the increases in volumes of dumped imports.

EU Interest

The Commission carefully examined the interests of EU producers, importers and users in order to determine whether it was in the interest of the EU to impose measures. It was expected that the Union industry would have the opportunity to improve its situation through increased sales volumes, sales prices and market share. Although some negative effects could occur in the form of cost increases for certain users, they were likely to be outweighed by the expected benefits for the producers and their suppliers. On balance, there were no compelling reasons against the imposition of definitive measures on imports of the product concerned originating in the PRC.

Measures

Definitive measures ranging from 48,3% to 71,9% were imposed on 20 December 2011. They were based on the injury elimination levels as these were lower than the dumping margins found. In order to minimise the risks of circumvention due to the high difference in the duty rates, it was considered that special measures were needed in this case to ensure the proper application of anti-dumping duties.

Coated fine paper originating in the People's Republic of China (AS)

An anti-subsidy investigation was initiated on imports of coated fine paper originating in the People's Republic of China (the 'PRC') in April 2010 on the basis of a complaint lodged by CEPIFINE, the European association of fine paper manufacturers on behalf of the producers representing over 25% of the total EU production of coated fine paper. This was the first anti-subsidy investigation initiated against imports of a product from the PRC. The product concerned was defined as coated fine paper which is paper or paperboard coated on one or both sides (excluding kraft paper or kraft paperboard), in either sheets or rolls, and with a weight of 70 g/m 2 or more but not exceeding 400 g/m 2 and brightness of more than 84. An anti-dumping proceeding on the same product originating in the PRC was opened in February 2010.

Prior to the initiation of the case, consultations were held between the Commission Services and the Chinese authorities in accordance with the Basic Regulation. However, no mutually agreed solution was reached. The investigation period (IP) was from 1 January 2009 to 31 December 2009 with injury analysis covering the period from 1 January 2006 to the end of the IP.

Subsidisation

Only two exporting producers groups in the PRC consisting of 6 related exporting producers came forward. 23 Government subsidy schemes were investigated.

The Preferential lending scheme to the coated paper industry was found to be countervailable. All three Income tax programmes: Preferential tax policies for companies that are recognised as high or new technology enterprises; policies for Research & Development and dividend exemption between qualified resident enterprises were also found to be countervailable. All three Indirect tax and Import tariff programmes were also found to be countervailable. These were: VAT and Tariff exemption on imported equipment; VAT rebates on domestically produced equipment and City maintenance ad Construction Taxes and education surcharges for Foreign Invested Enterprises. Of the 13 Grant programmes, seven were considered to be countervailable: Famous Brands; Special Funds for Encouraging Foreign Investment Projects; Anti-dumping Respondent Assistance; Shouguang Technology Renovation Grant; Suzhou Industrial Parc Intellectual Property Right Fund; Subsidy of High Tech Industrial Development Fund and the Award received from Suzhou Industrial Park for maintaining growth. The other four involved such small amounts of benefits that it was not considered necessary to pursue the investigation. These were: the Special fund for water pollution treatment of Taihu lake of Jiangsu province; Special funds for energy saving of Suzhou Industrial park; Special fund for reduction of total emissions of major pollutants at municipal level of Suzhou municipality; Subsidy for water-saving and emission reduction; Environmental Protection award received from Suzhou Environmental Protection Bureau and Energy saving award in Ahouguang. Lastly, of the three schemes on Government provision of goods and services for less than adequate remuneration, only one was found to be countervailable: the provisions of land-use rights. The other two were not assessed mainly because the cooperating exporting producers did not benefit from these schemes during the IP. These were the Provision of electricity and of paper-making chemicals.

The amount of the countervailable subsidies expressed ad valorem for the investigated companies ranges between 4,06% and 12,04%. Given the fact that the level of cooperation was considered high, it was considered appropriate to set the subsidy level for the non-cooperating exporting producers at 12,04%

Injury

The volume of total imports of the product concerned from the PRC increased dramatically, almost tripling over the period considered. As a result, their market share increased significantly from approx. 1% in 2006 to over 4% in the IP. This has to be seen against the background of a decreasing consumption which dropped by 14% during the same period. The price of these imports were found to undercut the EU prices on average by 7,6%

Only four Union producers came forward so it was decided that sampling was not necessary. Most of the injury indicators such as production volume (-20%), capacity utilisation (-10%), sales volume to unrelated customers on the Union market (-19%), market share (-5 percentage points) deteriorated during the period considered. In addition, the injury indicators related to the financial performance of the four representative Union producers such as return on investment and profitability were seriously affected until 2008. It was therefore concluded that the EU industry had suffered material injury.

Causality

Subsidised imports from the PRC increased dramatically (+183%) over the period considered while Union consumption decreased by about 14%. Other factors were examined in the context of the causation analysis including the economic crisis, prices of raw material, export performance of the representative union producers, imports from other third countries and structural overcapacity. It was concluded that these factors did not break the causal link between the subsidised imports and the injury suffered.

EU interest

It was considered that the imposition of countervailing duties on imports of coated fine paper from the PRC would allow the Union industry to regain at least part of the market share lost during the period considered, with a further positive impact on its economic situation and profitability. Regarding the importers and traders it was concluded that the imposition of measures should overall not have a significant impact. It was also concluded that, since price increases would impact on all economic players, it would have a neutral effect on the publishers. The direct impact on the printers was considered to be negligible since most printers had no or very limited direct purchases of Chinese paper in the IP and the amount of Chinese paper used by printers was low in general.

Anti-subsidy measures

Definitive anti-subsidy measures were imposed on imports of coated fine paper from the PRC ranging from a duty of 4% to 12% for individual exporting producers and 12% for all other producers.

8.1.5. Investigations terminated without measures

In accordance with the provisions of the respective basic Regulations, investigations may be terminated without the imposition of measures if a complaint is withdrawn or if measures are unnecessary (i.e. no dumping/no subsidies, no injury resulting there from, measures not in the interest of the EU).

In 2011, 11 new proceedings (7 anti-dumping and 4 anti-subsidy) were terminated without measures, compared to 10 in 2010 and 11 in 2009.

The alphabetical list of cases which were terminated without the imposition of measures during 2011 can be found below. More information can be obtained from the Official Journal to which reference is given in Annex E.

Product (type of investigation[20]) || Originating from || Main reason for termination

Purified terephthalic acid and its salts AD || Thailand || De minimis dumping

Wireless wide area networking (WWAN) modems AD || P.R. China || Complaint withdrawn

Stainless steel bars || India || Complaint withdrawn

Tris (2-chloro-1-methyl-ethyl) phosphate AD || P.R. China || Complaint withdrawn

Graphite electrode system (certain)AD || P.R. China || Complaint withdrawn

Polyethylene terephthalate (PET) AD || Oman Saudi Arabia || Complaint withdrawn

Purified terephthalic acid and its salts (AS) || Thailand || AS duties – De minimis

Wireless wide area networking (WWAN) modems (AS) || P.R. China || Complaint withdrawn

Polyethylene terephthalate (PET) AS || Oman Saudi Arabia || Complaint withdrawn

8.1.6. Details on some individual cases

Wireless wide area networking (WWAN) modems originating in the People's Republic of China

On 30 June 2010 the Commission initiated an anti-dumping proceeding concerning imports of wireless wide area networking (WWAN) modems originating in the People's Republic of China ('the PRC') after receiving a complaint. On 16 September 2010 the Commission initiated an anti-subsidy proceeding concerning WWAN modems originating in the PRC after receiving a complaint. Both complaints were lodged by Option NV.

On 26 October 2010 Option NV withdrew its anti-dumping and anti-subsidy complaints because it had entered into a cooperation agreement with an exporting producer in the PRC. Consequently, the Commission informed interested parties that it considered terminating the proceedings since the investigations had not brought to light any considerations showing that a termination would not be in the Union interest.

Subsequent to the withdrawal one company contacted the Commission claiming that it was a Union producer of WWAN and that the proceedings should be continued. However, the company only came forward after the procedural deadlines in both proceedings had passed. In addition, the allegations and information put forward by the company were not such as to lead the Commission to conclude that it would be in the Union interest to pursue the proceedings.

The Commission concluded that it would be disproportionate to continue with the investigation and impose measures following the withdrawal of the complaints. The proceedings were terminated in March 2011.

Polyethylene terephthalate (PET) originating in Oman and Saudi Arabia

On 16 February 2011 the Commission initiated an anti-dumping proceeding concerning imports of certain polyethylene terephthalate (PET) originating in Oman and Saudi Arabia, following a complaint lodged by the Committee of Polyethylene Terephthalate Manufacturers in Europe (CPME). On the same day the Commission initiated an anti-subsidy proceeding concerning imports of PET originating in the countries concerned.

By a letter of 12 October 2011, the CPME formally withdrew its complaint. Since the Commission did not identify any reason to indicate that termination would not be in the Union interest, it was decided to terminate the proceedings. Interested parties requested a disclosure of the findings of the investigation, but the Commission noted that it was not in the position to disclose data gathered prior to the withdrawal of the complaint because it did not reach a conclusion on its findings.

8.2. Review investigations

8.2.1. Expiry reviews

Article 11(2) and Article 18 of the basic Regulations provide for the expiry of measures after five years, unless an expiry review demonstrates that they should be maintained in their original form.

In 2011, 18 anti-dumping measures and 3 anti-subsidy measure expired automatically. The references for these measures are set out in Annex N.

Since the expiry provision of the basic Regulations came into force in 1985, a total of 473 measures have been allowed to expire automatically.

8.2.1.1. Initiations

The alphabetical list of the reviews initiated can be found below, together with the name of the complainant. It should be noted that some expiry reviews may be carried out in parallel with interim reviews, which allow the amendment of the duty rates. In such case, these reviews are marked with an asterisk. More information can be obtained from the Official Journal to which reference is given in Annex F.

Product (type of investigation[21]) || Originating from || Complainant

Tartaric acid * || P.R. China || Distillerie Bonollo SpA, Industria Chimica Valenzana SpA, Distillerie Mazzari SpA, Caviro Distillerie S.r.l. and Comercial Quimica Sarasa s.l.

Seamless pipes and tubes of iron or steel* || Croatia Russia Ukraine || Defence Committee of the seamless steel tubes industry of the EU

Lever arch mechanisms || P.R. China || Interkov spol.s.r.o, IML Industria Meccanica Lombardia S.r.l and Niko metalurgical company d.d. Zelezniki

Chamois leather || P.R. China || British Leather Confederation

Plastic sacks and bags || P.R. China Thailand || 33 Union Producers

8.2.1.2. Reviews concluded with confirmation of duties

During 2011, 8 expiry reviews were concluded with confirmation of the duties for a further five years.

The alphabetical list of the cases which were concluded with confirmation of duty during 2011, together with the result of the investigation, can be found below. More information can be obtained from the Official Journal to which reference is given in Annex F.

Product || Originating from || Result of the investigation/ Type[22] and level of measure

Okoumé plywood || P.R. China || Confirmation of duty AD duty of 6,5%-23,5% All other companies 66,7%

Tungsten carbide and fused tungsten carbide || P.R. China || Confirmation of duty AD duty of 33%

Furfuraldehyde || P.R. China || Confirmation of duty AD duty of EUR 352 per tonne

Barium carbonate || P.R. China || Confirmation of duty AD duty of 6,3%-8,1% All other companies 56,4%

Bicycles || P.R. China || Confirmation of duty AD duty of 48,5%

Hand pallet trucks and their essential parts || P.R. China Thailand (ext.) || Confirmation of duty AD duty of 7,6%-39,9% All other companies 46,7%

Trichloroisocyanuric acid (TCCA) || P.R. China || Confirmation of duty AD duty of 3,2%-40,5% All other companies 42,6%

8.2.1.3. Details on some individual cases concluded by confirmation of duty

Bicycles

In September 1993 the Council imposed a definitive anti-dumping duty of 30,6% on imports of bicycles originating in the People's Republic of China (the 'PRC'). Following an anti-circumvention investigation, this duty was extended to imports of certain bicycle parts originating in the PRC. In addition, it was decided to create an 'exemption scheme' for imports of parts not constituting circumvention. Following an expiry review, it was decided in July 2000 that the measures should be maintained. Following an interim review, it was decided in July 2005 to increase the anti-dumping duty in force to 48,5%.

In July 2010 following a request from the European Bicycles Manufacturers Associations (EBMA), the EU initiated an expiry review.

The investigation of dumping and injury covered the period from 1 April 2009 to 31 March 2010 ('review investigation period' or 'RIP'). The examination of trends in the context of the analysis of injury covered the period from January 2007 to the end of the RIP.

Owing to the large number of EU producers willing to cooperate, sampling was used for EU producers. Eight Union producers were selected for the sample. Only seven Chinese producers and four importers cooperated in the investigation, therefore it was decided not to apply further sampling.

Recurrence of dumping

It was proposed to use Mexico as an analogue country to establish the normal value for the PRC. One party objected and proposed India as an alternative, yet the objection was not substantiated and therefore rejected. The average normal value was established based on domestic sales. The export price was established on the basis of Eurostat data. Even though the prices found in Eurostat were inconclusive, the Commission considered them to be a reasonable source for the purpose of the investigation due to the low cooperation from the Chinese exporters. Because of the limitations, the data only served as an indicator of price trends. The weighted average normal value from Mexico was compared to the weighted average Chinese export price on an ex-works basis. For the purpose of ensuring a fair comparison, the price derived from Eurostat was adjusted for the average cost of sea freight per transaction. A conservative comparison using Eurostat figures indicated a dumping margin of more than 20% although it was noted that it was more likely to reach levels of more than 100%. In view of the fact that even considering the measures in force, a dumping margin of more than 20% existed during the RIP, it was considered very likely that dumping would continue in the absence of measures.

Injury and likelihood of continuation of injury

The investigation found that the existing anti-dumping measures had clearly had an effect on the situation of the Union industry. It had managed, to some extent, to benefit from the existence of the measures maintaining a stable market share. However, the Union production decreased and profit margin remained insufficient. Any possibility for further growth and profits had been undermined by the price and volume pressure of dumped imports.

The industry was clearly in a fragile situation, as it made a loss. Almost all injury indicators relating to the financial performance of the Union producers – such as profitability, return on investments and cash flow – deteriorated during the period considered. Consequently, it could not be concluded that the situation of the Union industry was secure. On this basis, it was concluded that the Union industry, as a whole, remained in a vulnerable economic situation and continued to suffer material injury.

In the context of the likelihood of recurrence of injury, it was found that the Union industry had been suffering from the effects of the Chinese dumped imports for several years. It only managed to recover thanks to the anti-dumping measures in force. Exposing the Union industry to increased volumes of dumped low-priced imports from the PRC, would likely result in a further deterioration of its sales, market share and sales prices, as well as a further deterioration of its financial situation. It was also found that the undercutting of sales prices of Chinese producers by 53 % appeared to indicate that in the absence of measures, Chinese exporting producers would export the product concerned to the Union market at prices considerably lower than those of the Union industry.

In view of the findings made during the investigation, namely the spare capacity in the PRC, the export oriented characteristic of the Chinese industry and the past behaviour of the Chinese exporters on foreign markets, any repeal of the measures would point to a likelihood of continuation of injury. The circumvention of the measures strongly underpinned this conclusion. It constituted clear evidence of the attractiveness of the Union market for the Chinese producers.

Union interest

As regards the Union industry it was considered that maintaining the measures would allow it to grow and improve its situation in a restored fair competitive environment. It would also be in the interest of consumers for whom Europe is the most important market for modern cycling products with high standards in quality and safety. An inflow of products from the PRC would lessen those standards. Furthermore, the importers would not be substantially affected since fairly priced bicycles would still be available in the market. By contrast, if measures were not imposed, Union producers of bicycles would likely go out of business, thus also threatening the existence of Union suppliers of bicycle parts.

There were no compelling reasons not to impose anti-dumping duties against imports of bicycles originating in the PRC therefore the anti-dumping measures on bicycles were maintained.

Trichloroisocyanuric acid (TCCA)

In O