WRITTEN QUESTION E-2782/99

by Alexandros Alavanos (GUE/NGL) to the Commission

(18 January 2000)

Subject: Anti-dumping measures against non-Community steel products

Before his resignation, Commissioner Leon Brittan strangely did not take the decision required of him to impose temporary anti-dumping tariffs on imports of hot rolled coil from Bulgaria, India, Iran, South Africa, Taiwan and Yugoslavia despite the fact that the Commission had found that they were damaging the European steel industry, but referred the final decision to the new Commission to be taken six months

later. The increase in imports from these countries gave rise to surplus stocks which were constantly sold off to the extent that European steel producers' earnings fell from 17-18 % in early 1998 to 3 % by the end of the year and to 10 % during the early months of 1999.

Examining 1998 as a whole, the Commissioner drew the conclusion that the damage sustained by the end of the year was slight. Article 6(1) of Decision ECSC 2277/96(1) states, however, that for the purpose of a representative finding, an investigation period shall be selected which, in the case of dumping shall, normally, cover a period of not less than six months immediately prior to the initiation of the proceeding. If this Decision is observed in spirit and to the letter, the conclusion to be drawn is that the damage to the European steel industry was enormous. (European steel producers' earnings fell from 17-18 % in 1998 to 10 % in the early months of 1999). Anti-dumping measures should, therefore, have been taken immediately as the rules provide that such measures may be imposed no later than nine months after the initiation of the investigation.

Will the Commission, therefore, say:

1. on what grounds this tactic was pursued,

2. whether the provisions of Article 6 of Decision 2277/96 on protection against dumped imports from countries not members of the European Coal and Steel Community were complied with, and

3. whether it will take definitive anti-dumping measures within the prescribed period of six months commencing from 8 October 1999?

(1) OJ L 308, 29.11.1996, p. 11.

Answer given by Mr Lamy on behalf of the Commission

(22 February 2000)

The Commission would like to point out that in addition to the anti-dumping proceeding concerning imports of certain flat rolled products of iron or non-alloy steel originating in Bulgaria, India, Iran, the Federal Republic of Yugoslavia, South Africa and Taiwan to which the Honourable Member refers, a parallel anti-subsidy investigation with regard to India, South Africa and Taiwan was also initiated.

In the framework of these proceedings, the Commission, based on the information available in September 1999, provisionally concluded that the results of the analysis were mixed and there would need to be further evidence of material injury before any action could be taken. In these circumstances, an affirmative determination of injury could not be made at that time, namely within the deadline for the imposition of provisional measures. Consequently it was decided to pursue the investigation and to collect further information.

The mixed picture that emerged in September 1999 was that on the one hand prices and profits (on an annual basis) in the period 1997 to 1998 increased, whereas on the other, imports had surged and other factors related to the Commmunity industry's economic situation had deteriorated.

Article 6(1) and 11(1) of the basic decisions (anti-dumping and anti-subsidy respectively) exclude the possibility to change the length of the investigation period (IP) after the initiation of an investigation. The one-year period (1998) selected by the complaining industry as the IP in its complaint was well known by all interested parties in the above proceedings. This was never the subject of dispute. In these cases, any change in the length of the IP would have suggested a manipulation which would be contrary to proceedings being carried out in an objective manner. Nevertheless, after the deadline for the imposition of provisional measures, the Commission continued and completed its investigation and analysed the additional information received.

This supplementary analysis was carried out in particular on a quarterly basis, per main product categories and per type of sales contract. As a result it was found that the economic situation of the industry

deteriorated seriously during the investigation period. Indeed, it was found that profitability, sales volume, sales prices, production, etc, during the second half of the investigation period developed so negatively that it had to be qualified as material injury. In addition, it was found that this bad situation persisted in 1999.

The additional information also provided concrete explanations as to why there has been a time-lag between the surge in dumped and subsidised imports and the beginning of the deterioration of the economic situation of the Community industry during the IP. The Commission concluded that no other factors other than dumped and subsidised imports were the cause of the injury.

The evaluation of all the interests involved on the Community market, the so called Community interest test, showed that no compelling reasons existed against the imposition of measures.

On this basis the Commission decided to impose definitive anti-dumping and countervailing measures in the framework of the above proceedings(1).

(1) Commission Decision No 283/2000/ECSC of 4 February 2000 (Anti-Dumping) Commission Decision No 284/2000/ECSC of 4 February 2000 (Anti-subsidies) (OJ L 31, 5.2.2000).