WRITTEN QUESTION E-0240/03

by Paul Rübig (PPE-DE) to the Commission

(4 February 2003)

Subject: Protective measures against fertiliser imports in Hungary

The Hungarian Ministry of Economic Affairs and Transport is currently carrying out an investigation as a basis for a decision on protective measures against the general importation of nitrogenous fertilisers. It was a Hungarian fertiliser manufacturer that requested the investigation.

According to statement no 13/2002 by the Hungarian Ministry of Economic Affairs and Transport, imports of ammonium nitrate have grown continuously in recent years. The substantial increase in imports is causing serious damage to the only domestic producer of nitrogenous fertilisers, or is liable to cause it damage.

The aforementioned solitary domestic producer cannot supply the whole Hungarian market, and Hungary has accordingly imported nitrogenous fertilisers in the past decade (imports grew by 18,3 % between 1998 and 2001).

All nitrogenous fertiliser producers in the EU Member States have to produce under the same conditions (purchase prices for gas) as the Hungarian producer; they have no advantage over their Hungarian competitor in terms of raw materials prices or wage costs.

What view does the Commission take of the planned introduction of protective measures against imports of nitrogenous fertilisers in the context of Hungary's impending accession to the EU?

Are protective measures against imports of fertiliser from the EU justified on the grounds stated here?

Answer given by Mr Verheugen on behalf of the Commission

(25 March 2003)

The Commission cannot prejudge the outcome of the investigation that has been initiated by the Hungarian authorities in respect of importation of nitrogenous fertiliser. If the Hungarian authorities conclude that safeguard measures should be imposed, they will have to supply all the necessary information to justify this decision. The Commission will then assess the case and hold consultations with Hungary in case the evidence provided is not satisfactory.

With regard to the argument that the Hungarian industry cannot meet the needs for the domestic consumption, it should be noted that, from a strictly legal point of view, insufficient domestic production does not exclude the imposition of safeguard measures on imports. The decisive criterion in this context is rather the extent of injury that the imports have caused by taking up market shares previously held by the domestic industry. The principle of proportionality has however to be respected.

As to the statement that Community products have no competitive advantage over Hungarian ones, this is not relevant under international safeguard rules. The fact that imports have been made under fair competitive conditions and that their prices have been fair does not preclude the application of safeguard measures.

Regarding Hungary's impending accession to the Union, it should be noted that the case in question is a safeguard investigation. Unlike anti-dumping and countervailing measures, safeguard measures apply on an erga omnes basis, i.e. irrespective of the origin of the imported goods. Hungary can thus not be prevented from applying protective measures on the grounds of its forthcoming accession to the Union, because this would prevent it from applying protective measures as a whole (i.e. even on imports of non-Union origin).

However, notwithstanding the above, it goes without saying that the Commission is closely monitoring and will continue to monitor the developments in this case, and will take action wherever appropriate to defend the interests of Community exporters and to ensure the respect of relevant international rules.