Proposal for a COUNCIL REGULATION (EEC) modifying the anti-dumping duties following the review of the anti-dumping measures applicable to imports of synthetic polyester fibres originating in Taiwan, Romania, Turkey and the Yugoslav Republics of Serbia, Montenegro and Macedonia and closing the said review in respect of imports of synthetic polyester fibres originating in Mexico and the United States of America
Date: 1992-07-17
Institutions: European Commission
Subjects: EU production, anti-dumping duty, export price, man-made fibre, trading margin

C0MV1ISSION  OF  THE  EUROPEAN  CGMKUNITIES 

C0M(92) 304 final 

Brussels,  17 July  1992 

Proposal  for a 

COUNCIL  REGULATION  (EEC) 

modifying  the anti-dumping  duties  following  the review of  the anti-

dumping measures applicable  to  imports of  synthetic  polyester  fibres 

originating  in Taiwan, Romania, Turkey  and  the Yugoslav  Republics of 

Serbia, Montenegro and Macedonia and  closing  the said  review  in 

respect  of  imports of  synthetic  polyester  fibres originating  in 

Mexico and  the United  States of  America 

(presented  by  the Commission) 

-  2 -

EXPLANATORY  MEMORANDUM 

1. 

In  a 

notice 

published 

in  Official  Journal  No C 230  of 

15 September  1990 the Commission  announced  a review of  the anti-dumping 

measures  imposed  on  imports  into  the  Community  of  synthetic  polyester 

fibres  originating  in  Taiwan,  Turkey,  the  United  States  of  America, 

Mexico,  Romania  and  Yugoslavia  in  accordance  with  Artlcle  14  of 

Regulation  (EEC) No 2423/88. 

2. 

The  Commission  carried  out  its  investigation  in  the  period 

between  1 January  and  31 August  1990. 

3. 

The normal  value  in respect  of  the dumping  was established: 

for  the  three  Taiwanese  producers,  on  the  basis  of  constructed 

value,  namely  by  adding  together  the  production  cost  and  a 

reasonable  profit  margin:  this  gave  dumping  margîns  of  between 

5.9% and 13%; 

for  the  Turkish  producer  and  the  producer  from  the  Yugoslav 

Republics  of  Serbia,  Montenegro  and  Macedonia  on  the  basis  of 

domestic  prices,  the  dumping  margin  ranging  between  11.4%  and 

15.6%; 

- 

for  Romania,  a  state-trading  country,  on  the  basis  of  a 

Taiwanese  constructed  value,  which  gave  a  dumping  margin  of 

14.1%. 

4. 

There  was  no  need  to  examine  whether  dumping  was  practised  by 

the US and Mexico since  these  two countries' exports did  not  contribute 

to the  injury. 

5. 

On  the  question  of  injury,  invest igat ions  were  also  made  to 

determine whether  any changes had occurred,  for  better  or  for worse, in 

the circumstances  as a  result  of  the behaviour  of  the exporters  on  the 

Community  market  or  the  situation  of  the  Community 

industry, 

independently of  the anti-dumping measures which  are  the subject  of  the 

review procedure. 

-  3 -

6. 

It  emerged  from  the  investigation  that  a  situation  involving 

injury  to the Community  industry - faliing sales and  financial  iosses -

meant  that  protection  was  stiII  required  against  dumped  imports 

originating  in  Taiwan,  Romania,  Turkey  and  the  Yugoslav  Republics  of 

Serbia,  Montenegro  and  Macedonia.  The  measures  under  review  had  not 

prevented  continued  undercutting  of  Community  producers  by  these 

exporters,  and  exports  remained  at  an  appreciable  level.  In  these 

clrcumstances,  the  lifting  of  the  anti-dumping  measures  in  force 

against  these  countries,  as  advocated  by  the  Association  of  Community 

Importers,  would  not  be  Justified.  On  the  contrary,  the measures  need 

adjustment  in  the  light  of  the  information  on  dumping  and  injury 

emerging  from  the  investigation.  Imports  originating  in  the  United 

States  and  Mexico,  however,  can  no  longer  be  considered  as  a  cause of 

injury, now or  in the future. 

7. 

As  is  usual  practice,  the  Commission  has  carefully  considered 

the  implications of  anti-dumping  measures  for  consumers'  interests  and 

there  is  no  evidence  that  they  would  be  signif icant ly  affected  by  a 

continuation of  such measures. 

8. 

This  being  the  case,  the  anti-dumping  measures  should  be 

maintained  and  adjusted  in  the  light  of  the  results  of  the  review 

referred  to  in paragraphs  3 and 4, namely: 

Taiwan: anti-dumping  duties ranging between  5.9% and  13% 

Turkey: an anti-dumping  duty of 11.4% 

The  Yugoslav  Republics  of  Serbia,  Montenegro  and  Macedonia:  an 

anti-dumping  duty of  15.6% 

Romania: an anti-dumping  duty of 14.1% 

US and Mexico: no measures. 

-  4 -

Proposal  for a 

COUNCIL REGULATION  (EEC) 

modifying  the anti-dumping  duties  foliowing  the review of  the anti-

dumping measures applicable to  imports of synthetic  polyester  fibres 

originating  in Taiwan, Romania, Turkey  and  the Yugoslav  Republics of 

Serbia, Montenegro and Macedonia and closing  the said  review  in 

respect  of  imports of synthetic  polyester  fibres originating  in 

Mexico and  the United  States of  America 

THE COUNCIL  OF THE  EUROPEAN  COMMUNITIES, 

Having  regard  to  the  Treaty  establishing  the  European  Economic 

Community, 

Having  regard  to Council  Regulation  (EEC) No 2423/88 of  11  July  1988 on 

protection  against  dumped  or  subsidized  imports  from  countries  not 

members  of  the  European  Community(1),  and  in  particular  Article  14 

thereof, 

Having  informed  the  EEC-Turkey  Association  Council  pursuant  to 

Article 47(2) of  the Additional  Protocol  to  the Agreement  establishing 

an Association between  the European  Economic Community  and  Turkey(2^, 

Having  regard  to  the  proposal  from  the  Commission,  presented  after 

consultations  within  the  Advisory  Committee  as  provided  for  by  the 

Regulat ion, 

Whereas: 

(1)  OJ  No L 209, 2.8.1988, p. 1. 

(2)  OJ  No L 293, 29.12.1972, p. 3. 

-  5 -

A. PROCEDURE 

1. 

Council  Regulation  (EEC)  No 3946/88( 3)  imposed  a  definitive 

anti-dumping  duty  on  imports of  synthetic  polyester  fibres originating 

in  Taiwan,  Turkey,  the  United  States  of  America,  Mexico,  Romania  and 

YugosIav i a. 

2. 

In  March  1990  the  Commission  received  a  request  for  a  review 

from  the  Association  of  Importers  of  Synthetic  Polyester  Fibres; 

requests  for  a  review  had  also  come  from  exporters  of  this  product  in 

Mexico, Romania  and  the United States of  America. 

3. 

Having  decided,  after  consultations,  that  there  was  sufficient 

evidence  to  Justify  a  review,  the  Commission  decided  to  institute  a 

fuli 

review  of  Regulation  (EEC) No 3946/88 

in  accordance  with 

Article  14 

of 

Regulation  (EEC) No 2423/88, 

and 

opened 

an 

invest igat ion<4). 

4. 

The  Commission  officially  notified  the  exporters  and  the 

Community  importers  and  producers  known  to  be  concerned  and  gave  them 

the  opportunity  to make  known  their  views  in writing  and  to  request  a 

hear ing. 

There  were  found  to  be  no  producers/exporters  in  the  Republics  of 

Slovenia,  Croatia 

and  Bosnia-Herzegovina.  Anti-dumping  measures 

should  therefore  be  restricted  to  the  Yugoslav  Republics  of  Serbia, 

Montenegro and Macedonia. 

5. 

Exporters,  importers  and  the  International  Rayon  and  Synthetic 

Fibres  Committee  (IRSFC) made  known  their  views  in  writing.  Some  of 

them  requested  and were granted  hearings. 

6. 

The  Commission  sought  and  verified  all 

information  it 

considered  necessary  for  a  preliminary  determination  of  dumping  and 

Injury.  It  inspected  the premises of  the  following  companies: 

(3)  OJ  No L 348, 17.12.1988, p. 49. 

(4)  OJ  No C 230, 15.9.1990, p. 3. 

- 6 -

Community  producers 

Du Pont  de Nemours GmbH, Germany 

Enka AG, Germany 

Hoechst AG, Germany 

Enichem Fibres SpA,  Italy 

Montefibre SpA,  Italy 

Nurel  SA, Spain 

La Seda de Barcelona  SA, Spain 

Rhône Poulenc SA, Spain 

Br ilen SA, Spain 

Finicisa  Fibras Sinteticas SA, Portugal 

Akzo NV, Netherlands 

Rhône Poulenc Fibres SA, France 

Wellman  International  Ltd.,  Ireland 

Community  importers 

Hugo Bartram KG, Germany 

- 

Jochen von Grundherr, Germany 

Non-Communlty  producers 

(a) 

Taiwan 

Chung Shing Textile Co. Ltd, Taipei 

Far  Eastern Textile Ltd, Taipei 

Nan Ya Plastics Corp., Taipei 

Shinkong  Synthetic  Fibres Corp., Taipei 

Tainan Spinning Co. Ltd, Tainan 

Tuntex  Distinct  Corp., Tainan 

- 7 -

(b) 

Turkey 

SASA,  Artificial  and  Synthetic  Flbres  Inc,  Adana,  exporting 

through an affiliated company, EXSA, Adana 

Sônmetz Filament, Bursa 

(c) 

Yugoslav Republlcs of Serbla, Montenegro and Macedonia 

Hemteks, Skopje 

(d) 

Mexico 

Celanese Mexicana SA, Mexico 

Crisal Textil SA, Mexico 

Fibras Slnteticas SA, Monterrey 

Kimex SA, Mexico 

Nylon de Mexico, Mexico 

(e) 

United States of America 

Eastman Chemical Products  Inc, Kingsport TE 

E.l. Du Pont De Nemours and Co., Wilmington DE 

Hoechst Celanese Fibers  Inc, Charlotte NC 

Wellman  Inc, Johnsonville 

Mart in-Color-Fi  Inc, Edgefieid 

Gates Formed-Fibre Product  Inc, Auburn 

- 

Foss Manufactur ing Company  Inc, Hampton 

Bollag  International Corp., Newell, NC 

Carter, Moore & Co. Inc, New York 

- 8 -

7. 

The  Commission  received,  and  made  use  of,  information  from 

importers,  producers  in  the  exporting  countries  and  Community 

producers. 

8. 

Producers/exporters  were  notified  of  the  main  facts  and 

considerations  on  the  basis  of  which  it was  proposed  to  recommend  the 

imposition  of  definitive measures.  They  were  also given  time  in which 

to present  their  comments  following  receipt  of  this  information.  Their 

comments were studied  and, where appropriate, taken  into account  by  the 

Commission  in drawing up  its conclusions. 

9. 

The  investigation  into  dumping  practices  concerned  the  period 

1 January  to 31 August  1990. 

B.  REVIEW UNDER ARTICLE  14 OF REGULATION  (EEC) No  2423/88 

10. 

As  regards  injury,  a  fali  in  imports  and/or  an  improvement  in 

the economic and  financial  situation of  the Community  industry  is taken 

into consideration only  if  it results from  factors other  than  the anti-

dumping measures  in force. 

C. PRODUCT 

1. 

Product  descriptlon 

11. 

The  product  is  the  same  as  that  described  in  Regulation  (EEC) 

No 3946/88. 

12. 

The  product  under  investigation  is  synthetic  fibres  of 

polyesters,  not  carded,  combed  or  otherwise  processed  for  spinning, 

covered  by CN code 5503 20 00, and hereinafter  referred  to as synthetic 

polyester  fibres. 

- 9 -

This  product  is  a  raw  material  used  in  various  stages  of  textile 

production,  depending  on  the  nature  of  the  textiles  to  be  produced. 

Some  60% of  the  synthetic  polyester  fibres  consumed  in  the  Community 

are used  for  spinning  yarn  to make  fabric, mixed, where necessary, with 

other  fibres  such  as wool  or  cotton.  The  rest  is used  as wadding  for 

certaln  textile  products  (cushions,  car  seats,  anoraks, and  the  like), 

including other  non-spun  applications such  as carpet  manufacture. 

13. 

Although  the  potential  use  and  quality  of  synthetic  polyester 

fibres  can  vary,  there  is  no  significant  difference  in  the  basic 

physical  characteristics,  consumer  perception  or  marketing  of  the 

various  types  of  synthetic  polyester  fibres  under  consideration.  They 

may  therefore  be  grouped  as  one  product  for  the  purposes  of  this 

proceeding. 

Importers  asked  whether  a  distinction  should  not  be  drawn  between 

synthetic  polyester  fibres used  for wadding  and other  fibres because of 

the  different  application.  Such  a  distinction  was  not  acceptable, 

however,  because  it was only  possible  following  industrial  processing. 

Before  processing,  all  types  of  synthetic  polyester  fibres  generally 

have  the same physical  characteristics. 

Some  exporters  and  importers  also asked  for  synthetic  polyester  fibres 

with  specific  characteristics,  such  as  fire-resistant  or  bicomponent 

fibres,  to  be  considered  a  different  product  and  excluded  from  the 

scope  of  this  proceeding,  since  such  fibres  were  much  higher  priced 

than  the  others.  The  investigation  showed,  however,  that  although 

there  were  several  types  of  synthetic  polyester  fibres  with  different 

characteristics  corresponding  to  specific  purposes,  the  basic  physical 

characteristics,  application  and  use  were  the  same  as  other  synthetic 

polyester  fibres.  Furthermore,  the  market  for  the  product  is made  up 

of  different  classes  of  synthetic  polyester  fibres  which  overlap 

without  there being  a ciear  distinction  between  them.  These additional 

characteristics  of  so-called  "special  fibres"  do  not,  therefore,  make 

them different, and  they  should  fall within  the scope of  this  review. 

-  10 -

2. 

Like  products 

14. 

The Commission  found  that synthetic polyester  fibres produced  in 

the  Community  and  those  sold  on  the  domestic  markets  of  Taiwan;  the 

Yugoslav  Republics  of  Serbia,  Montenegro  and  Macedonia;  Turkey, 

Romania,  the United  States of America  and Mexico were  like products  as 

regards  physical  and  technical  characteristics  to  those  exported  by 

those countries to the Community. 

D. DUMPING 

1. 

Normal  vaiue 

(a) 

Taiwan 

15. 

The  Commission  was  able  to  establish  that  the  three  Taiwanese 

firms exporting  to  the Community  had  sold  representative  quantities of 

the  product,  equivalent,  that  is,  to  over  5%  of  exports  to  the 

Community,  on  the  domestic  market.  Since,  however,  the  volume  of 

profitable  sales was negligible, the normal  value had  to be  constructed 

on  the  basis of  the cost  of  production  and  a reasonable  profit  margin. 

The  cost  of  product ion  was  computed  on  the  basis  of  all  costs,  both 

fixed  and  variable,  of  materials  and  manufacture,  plus  a  reasonable 

amount  for  selling  and  general  and  administrative  expenses.  Given  a 

representative  volume  of  domestic  sales,  the  amount  was  calculated  by 

reference  to  the  expenses  incurred  by  Taiwanese  producers  on  sales  of 

like  products  on  the  domestic  market.  As  to  the  profit  margin,  the 

information  available  to  the  Commission  indicated  that  there  had  been 

no representative profitable  sales on  the domestic market  in the period 

under  investigation.  The  Commission  therefore  established  the  profit 

margin  on  another  reasonable  basis,  namely  the  profits  made  by  the 

firms concerned over  previous  three years on all  sales  in the sector of 

each  firm; this margin varied  between 6% and 11%. 

3) 

- 11 -

(b) 

The Yuaoslav  Republlcs of Serbia. Montenegro  and  Macedonla 

16. 

Since  there  had  been  sales  of  a  representative  quantity  on  the 

domestic market  (over  5% of exports  to the Community),  the normal  value 

was  calculated  on  the  basis  of  prices  actually  paid  or  to  be  paid  in 

the  ordinary  course  of  trade  for  the  like  product  intended  for 

consumption  on  the domestic market, net of all  discounts and  rebates. 

(c) 

Turkey 

17. 

Since  there  had  been  sales  of  a  representative  quantity  on  the 

domestic market  (over  5% of exports  to the Community),  the normal  value 

was  calculated  on  the  basis  of  prices  actually  paid  or  to  be  paid  in 

the  ordinary  course  of  trade  for  the  like  product  intended  for 

consumption  on  the domestic market, net of  all  discounts  and  rebates. 

(d) 

Roman i a 

18. 

In view  of  the  fact  that  Romania  cannot  be  classed  as  a market 

economy,  the  Commission  had  to  base  its  calcuiations  on  the  normal 

value  of  the  product  in  question  in  a  market  economy  country.  The 

importers  and  the  producer  objected  to  Turkey,  chosen  in  the  previous 

investigation, but  accepted  Taiwan  as a similar  country. The  Commission 

found  that  there  were  no  significant  differences  between  the  two 

countries  in  the  production  process,  scale  of  production  or  type  of 

product,  nor  in  the  conditions  of  access  to  the  main  cost.  It 

accordingly  decided  that  it  was  appropriate  and  not  unreasonable  to 

determine  the Romanian normal  value. 

19. 

As  indicated  in point  14 of  the  recitals,  the  normal  value  for 

Taiwan  had  to  be  constructed.  In  this  respect  an  importer  of  the 

Romanian  product  requested  that  the  normal  value  thus  established  be 

adjusted  on  the  grounds  that  Romania  had  a  comparative  advantage  in 

terms of  oil  supplies,  a raw material  for  the manufacture  of  polyester 

fibres.  This  request  was not  found  to be  Justified.  The  investigation 

established  that  Taiwanese  firms  were  able  to  obtain  low-cost  raw 

materials  on  the  domestic  market.  Any  advantage  enjoyed  by  the 

Romanian producer  was  therefore not  significant. 

-  12 -

ln constructing  the  normal  value  for  Romania,  the Commission  based  its 

calculations  on  the  situation  of  the most  efficient  Taiwanese  producer 

manufacturing  the same  type of  product  for  the domestic market  and  for 

export.  The  Council  believes  that  any  comparative  advantage  has  been 

taken  fully  into account, especially  since  the  importer  in question  did 

not  provide any  precise  figures  in support  of  his  request. 

(e) 

United  States of America  and Mexico 

20. 

Given  that  the  two countries' exports had  not  contributed  to the 

injury  (see  recitals  30 and  31), the Commission  thought  it  unnecessary 

to find out  whether  dumping  had  taken place. 

2. 

Exoort  orices 

21. 

Export  prices  were  established  on  the  basis  of  the  prices 

actually  paid or  payable  for products sold  for export  to the  Community. 

Where  products  were  exported  through  subsidiaries  or  associates  in the 

Community,  as  in  the  case  of  the  Turkish  producer,  export  prices  were 

calculated  by  the  Commission  on  the  basis  of  the  price  at  which  they 

were  resold  to  the  first  independent  buyer,  duly  adjusted  to  take 

account  of  all  costs  incurred  between  import  and  resale, plus  a margin 

deemed  reasonable  to  cover  general  expenses  and  profit,  given  the 

profit  margins of  independent  importers of  the product  in question. 

3. 

Cpmparispn 

22. 

In  comparing  the  normal  value  with  the  export  prices, 

transaction  by  transaction,  the  Commission,  in  accordance  with 

Article  2(9)  and  (10)  of  Regulation  (EEC)  No 2423/88,  took  account, 

where  warranted,  of  the  differences  directly  affecting  price 

comparabiIIty, such  as selling  costs -  i.e. terms of  credit,  transport, 

insurance  and  handling  costs,  technical  assistance,  salaries  of  sales 

staff, and ancillary  costs - where  the claim was  Justified  and  the  Iink 

direct.  All  comparisons  were  made  at  the  ex-works  stage  and  at  the 

same  level of  trade. 

- 13 -

23. 

Regarding the export prices charged by producers from Turkey and 

the  Yugoslav  Republics  of  Serbia,  Montenegro  and  Macedonia,  the 

Commission  took  account,  in  accordance  with  Article 2(10)(b)  of 

Regulation  (EEC)  No 2423/88, of  the  differences  resulting  from  the 

import charges on raw materials, which varied according to whether the 

raw materials were used  for production sold on the domestic market or 

for export to the Community.  Adjustments were thus made  in cases where 

refunds of  duty were  found  to have been accorded, where  such  refunds 

concerned  materials  incorporated  in  the  product  exported  to  the 

Community. 

4. 

Dumping marains 

24. 

The comparisons referred to above showed that dumping was taking 

place.  The  dumping  margin  calculated  for  each  country  or 

producer/exporter  is equal  to the difference between  the normal value 

and the price on export to the Community, duly adjusted. 

The  weighted  average  dumping  margins  for  each  of  the  countries  or 

producers/exporters  concerned,  adjusted  to  free-at-Community-frontier 

prices, are as follows: 

Taiwan: 

Nan Ya Plastics Corp., Taipei 

Far Eastern Textile Ltd, Taipei 

Shinkong Synthetic Fibres Corp., Taipei 

RomanIa: 

5.9% 

6.8% 

13.0% 

14.1% 

The Yugoslav Republics of Serbia, Montenegro and Macedonia: 

Hemteks, Skopje 

15.6% 

Turkey: 

SASA Art if icial Synthetic Fibres  Inc, Adana 

11.4% 

- 14 -

25. 

In  the  case  of  firms  which  failed  to  cooperate  in  the 

investigation  or  did  not  reply  satisfactorily  to  the  Commission's 

questionnaire,  the  dumping  margin  was  determined  on  the  basis  of 

avallable  information,  in accordance with Article 7(7)(b) of Regulation 

(EEC)  No 2423/88.  The  Commission  considered  the  results  of  its 

InvestIgation  to  be  the  most  appropriate  basis  for  determining  the 

dumping  margin  and  that  the  fixing of  a margin  lower  than  the  highest 

margin  determined  for  an  exporter  which  cooperated  with  the 

investigation would  reward  failure to cooperate  and make  it possible to 

evade  duty.  It  accordingly  applied  the  highest  appropriate  margin  to 

such  firms.  The Council  supports  this approach. 

E.  INJURY 

26. 

In accordance with Article  14(1) of Regulation  (EEC) No 2423/88, 

the  Investigation sought  to determine whether  any changes  had  occurred, 

for  better  or  for  worse,  in  the  circumstances  as  a  result  of  the 

behavlour  of  the exporters  on  the Community  market  or  the  situation of 

the  Community  industry,  independently  of  the  anti-dumping  measures 

which  are the subject of  this revlew procedure. 

27. 

The Commission's  findings are as follows: 

1. 

Exporters' behaviour on  the Community  market 

(a) 

Cumulation 

28. 

To  measure  the  impact  of  dumped  imports  on  the  Community 

industry,  it must  first  be  ascertained  whether  the approach  adopted  in 

determining  the measures under  review, namely cumulation of  all  imports 

originating  in  the  countries  covered  by  the  investigation,  should  be 

continued. 

-  15 -

29. 

Imports  from  Mexico  stood  at  nearly  0.1%  in  1990. Although  the 

mere  fact  that  Mexican  imports  are  insignificant  after  the  imposition 

of  anti-dumping  measures  does  not  of  itself  mean  that  the  measures 

should  be  dropped  or  these  imports  not  cumulated  wlth  other  imports, 

the  investigation  found  that  the  structure  of  the  Mexican  market,  as 

analysed  over  a  number  of  years, made  it  highly  unlikely  that  exports 

to  the  Community  would  ever  reach  significant  levels  in  future. 

Mexican  production  is mainly  destined  for  the US market.  Confirmation 

of  this  comes  from  the  fact  that  although  Mexico  had  sizeable 

production  capacity  between  1984  and  1990,  its share  of  the  Community 

market  remained  negligible,  hovering  around  the  0.2%  to  0.5%  level, 

apart  from a temporary  spurt  of  1%  in 1987. 

The  Commission  thus  believes  that  imports  from  Mexico  would  not  rise 

significantly  if  anti-dumping  duties  were  abolished  and  that  there  is 

llttle  likelihood  of  further  injury.  This  being  so,  the  Commission 

finds  that  Imports  from  Mexico  should  not  be  cumulated  with  those  of 

the other  countries  concerned. 

30. 

Imports  from  the  United  States  of  America  have  fallen  and 

accounted  for  no  more  than  0.8%  of  the  market  in  1990.  The 

investigation  estabiished  that  this  trend 

is  the  result  of 

circumstances other  than  the  imposition of  anti-dumping  duties.  First, 

the  leading  US  producers  responsible  for  most  exports  to  the  Community 

are  not  subject  to  such  duties,  and  the  duties  imposed  on  others  are 

relatively  low.  Furthermore,  US  production  is  focused  on  high-cost 

products  for  the  domestic  market.  In  these  circumstances  the  export 

volume of  the products  in question  is unlikely  to have been  affected  by 

the  anti-dumping  duties.  These  exports  are  unlikely  to  contribute  to 

injury  in  future.  There  are  thus  no  grounds  for  cumulating  imports 

from  the  United  States  of  America  with  those  of  the  other  countries 

concerned. 

31. 

Imports  from  the  other 

four  countries  concerned 

were 

substantial, Taiwan  and  Turkey  in particular  (respectively  4.2% and  2% 

market  shares  in  1990). 

- 16 -

32. 

Although  the  volume  of  imports  from  Romania  and  the  Yugoslav 

Republics of Serbia, Montenegro and Macedonia was significantly  reduced 

after  the  imposition  of  anti-dumping  measures -  to  a  low  level  in the 

case  of  the  latter  and  to a negligible  level  in the  case of  Romania  -

the only explanation  for  this drop was  the anti-dumping measures. 

Romanian  and  Yugoslav  exports  have  always  been  oriented  towards  the 

Community  and  they  have  held  significant  and  constant  market  shares 

over  the  last  six  years.  For  those  reasons,  they  stI11  represent  a 

threat.  The  effects  of  these  imports  should  thus  be  cumulated  with 

those  of  Taiwan  and  Turkey  as  they  were  at  the  time when  the  measures 

under  review were  imposed. 

33. 

The Council  supports  this approach. 

(b) 

Community  consump11on 

34. 

The Community  market  remains relatively stable  in size.  It rose 

from  431  535 tonnes  in  1988  to  441  033 tonnes  in  1989,  falling  to 

424 194 tonnes  in 1990 (277 507 tonnes during  the reference  period). 

(c) 

Volume of  imports 

35. 

Following  the  introduction  of  anti-dumping  measures  in December 

1988,  the volume of  imports of synthetic  polyester  fibres  from  the four 

countries  in question  fell  from  44 000 tonnes  in 1988  to  31 400  tonnes 

in 1990;  in the case of Taiwan,  imports  rose from  12 000 tonnes  in 1988 

to 18 000 tonnes  in 1990.  The share of Community  imports  held by  these 

countries  shrank  from  10.2% In 1988 to 7.4%  in 1990. 

(d) 

Import  prices 

36. 

During  the  reference  period  the  prices  of  these  imports  were 

lower  than  the  prices  of  the  relevant  Community  product,  the  scale of 

undercutting  ranging  from  19%  to  25% on  average.  It  should  be  noted 

that  this  undercutting  has  been  taking  place  even  with  anti-dumping 

measures  in force. 

-  17 -

2. 

Situation of  the Communlty  industry 

(a) 

Production caoaclty. utlllzation  rate. stocks 

37. 

Community  production  of  synthetic  polyester  fibres  fluctuated 

from  379 286 tonnes 

in  1988  to  428 147 tonnes 

in  1989  and 

407 251  tonnes 

in  1990.  Since  production 

capacity 

rose  from 

432 903  tonnes  in 1988  to 466 339 tonnes  in 1989 and  471  723 tonnes  in 

1990,  the  utilization  rate  has  remained  fairly  stable  around  86%-88%. 

Stocks  over  the  same  period  rose  by  94%  from  29 146 tonnes  to 

56 533 tonnes. 

(b) 

The Community  industry's sales volume and market  share 

38. 

The quantity of synthetic polyester  fibres sold  in the Community 

by  the  Community  industry  rose  from  337 424 tonnes  in  1988  to 

356 465  tonnes  in  1989  but  fell  back  to  330 310 tonnes  in  1990  and 

stood  at  220 207 tonnes  during  the  reference  period.  The  Community 

industry's  market  share  developed  as  follows:  78.2%  in  1988, 80.8%  in 

1989 and 79.4% in 1990. 

(c) 

Price  trends 

39. 

A  detailed  analysis  was  made  of  the  selling  prices  in  the 

Community  of  polyester  synthetic  fibres  produced  by  the  Community 

industry  and  those of  imports from  the countries under  investigation. 

The  investIgation showed  that, following  the  imposition of  anti-dumping 

measures, prices  in the Community  rose  from  1988 to 1989, and  then fell 

to 1988  levels  in 1990. 

- 18 -

(d) 

ProfIts 

40. 

The  Commission  found  that,  overall,  the  Community  industry  had 

recorded  poor  financial  resuits  since  1988.  Despite  a  slight 

Improvement  In  1989,  the  situation  in  the  reference  period  had 

deter iorated.  In  1990  only  a  few  Community  producers  made  a  modest 

profit, while many  others  suffered  heavy  losses.  A weighted  average of 

the  Community  industry's  resuits  shows  a  loss  of  some  2.3%  over  the 

reference  period. 

(e) 

Employment  and  investment 

41. 

Between  1988  and  1990  the  Community  industry  shed  237  Jobs,  5% 

of  Its  labour  force,  and  investments  were  cut  back  and  two  factories 

closed. 

3. 

Conclusions concerning  a change  In circumstances 

42. 

In  Iight of  the above,  the Community  industry's  vulnerabiIity  in 

the  face  of  declining  sales  and  financial  losses  still  requires 

protection  against  dumped  Imports  originating  in  Taiwan,  Romania, 

Turkey  and  the  Yugoslav  Republics of  Serbia,  Montenegro  and  Macedonia. 

The  imposition  of  the measures  under  review  has not  prevented  continued 

undercutting  of  Community  producers'  prices  by  these  exports,  which 

have  remained  at  an  appreciable  ievel.  In  these  circumstances,  there 

are  no  grounds  for  lifting  the  anti-dumping  measures  against  these 

countries  as  requested  by  the  importers'  association.  Indeed,  the 

measures  should  be adjusted  in the  Iight of  the evidence of  dumping  and 

injury  emerging  from  this  investigation.  Imports  originating  in  the 

United  States  of  America  and  Mexico,  in contrast,  cannot  be  seen  as  a 

source  of  injury,  now  or  in  the  future,  for  the  reasons  set  out  in 

recitals  29 and  30. 

- 19 -

43. 

Importers  clalmed  that  a  review  which  examined  the  possibility 

of  lifting  existing  measures  could  lead only  to a downwards  adjustment 

of  the existing  dutles. 

The  Council  cannot  accept  this  argument.  First,  no  such  provision 

exists  in the  relevant  Community  legislation or  in GATT's  anti-dumping 

code.  Such  a  rule  would  be  contrary  to  the  whole  idea  of  a  review 

Instrument, as provided  for  in Regulation  (EEC) No 2423/88.  The aim of 

Article  14  is to  adjust  measures  to changing  circumstances, whether  in 

connection with  dumping  or  the resulting  injury.  It  is thus  irrelevant 

whether  the  request  for  a  review  comes  from  the  importers,  the 

exporters or  the Community  producers. 

This  applies with  even  greater  force  in that  the Commission  may  at  any 

moment  review  the  measures  and  adjust  them  to  changing  circumstances 

without  any  request  from an  interested  party. 

F. LEVEL OF DUTY 

1. 

Rale. 

44. 

In  order  to  determine  the  amount  of  duty  to  be  levied,  the 

Commission  took  account  of  the  dumping  margins  observed  and  the  levei 

of duty  required  to eliminate  the  injury. 

45. 

In calculating  the  injury  threshold,  the  Commission  had  to  take 

account  of  the  fact  that  the  Community  industry  as  a  whole  is making 

losses.  The  proposed  measures  therefore  have  to  ensure  that  the 

industry  can  increase  its  prices  to  cover  production  costs  and  make a 

reasonable  profit. Based  on  the  profits  realized  in previous  years  and 

the  industry's  ongoing  long-term  investment  requirements,  8%  was 

estimated  to be a reasonable  figure. 

-  20 -

The  Commission  then  calculated  the  price  increases  that  would  enable 

the Community  industry  to cover  all  its costs  and  make  a profit  of  8%. 

The prices of  the dumped  imports were  then  increased  by  the  figure  thus 

calculated,  expressed  as  a  percentage  of  the weighted  average  price  of 

these  imports CIF  at  the Community  frontier. 

The  individual  Injury  threshold  for  each  exporter  was  obtained  by 

adding  the  average  increase  thus  calculated  to  the  existing  anti-

dumping  duty. 

46. 

These  calculations  produced  an  injury  margin  for  each  exporter, 

and  wl I I  enable  Community  producers  to  raise  prices  to  restore  the 

Industry  to health. 

47. 

The  dumping  margin  for  Romanian,  Yugoslavian,  Turkish  and 

Taiwanese  producer/exporters  was  lower  than  the  average  injury 

calculated  as  above.  In  Iine  with Article  13(3) of  Regulation  (EEC) 

No  2423/88,  this  margin  is  the  figure  used  to  determine  the  rate  of 

duty  imposed on  these exporters. 

48. 

Since  there  may  be  other  producer/exporters  who  failed  to  reply 

to the Commission  questionnaire,  failed  to make  themselves known  in any 

other  way  or  failed  to  supply  the  information  considered  necessary  by 

the Commission,  it  is necessary,  for  the  reasons set  out  in recital  25, 

to  impose  a  duty  calculated  on  the  basis  of  the  most  appropriate 

available  information. Consequently,  the highest  appropriate margin  was 

applied  to  these  firms. 

49. 

No  duty  wi I I  be  levied  on  Mexican  and  US  producers,  for  the 

reasons  set  out  in recitals  29 and 30. 

50. 

The Council  confirms  the above. 

-  21 -

3. 

Form 

51. 

No  argument  was  put  forward  to  Justify  a  change  in  the  form  of 

the  anti-dumplng  duties  under  review.  Consequently,  it  would  seem 

appropriate  for  the ad valorem  format  to be  retained. 

G. COMMUNITY  INTEREST 

1. 

Situation of  the Community  industry 

52. 

To  leave  the Community  industry  without  protection  against  this 

unfair  competitlon  would  lead  to  a  further  deterioration  in  the 

situation. The  injury already  suffered  by  the Community  industry  in the 

past  led  to  the  imposition  of  the  measures  under  review.  As  these 

measures have not  eliminated  the  injury, the situation of  the  Community 

producers  remains  precarious. Any  further  deterioration  would  endanger 

Jobs  and  investment  in  a  sector  on  which  many  downstream  industries 

depend. 

2. 

Situation of  the  importers 

53. 

The  importers  argued  that  they  are  in  a  difficult  position, 

since  they  are  caught  between  large  Community  fibre  producers  on  the 

one  hand  and,  on  the  other,  a  powerful  fibre-processing  industry  to 

which  not  all  the  effects  of  anti-dumping  measures  can  be  passed  on. 

Consequently, any anti-dumping  duty would  cut  importers' profit  margins 

and  threaten  their  very  existence.  The  Council  does  not  accept  this 

argument.  The  allegations  concerning  the  effect  that  the  retention  of 

anti-dumping  measures  would  have  on  importers'  competitive  and 

financial  situation  were  not  substantiated.  Given  that  the  outcome  of 

this  review  will  be  to  discontinue  some  of  the  duties  imposed  in  1988 

and  to cut  others,  imports should,  in some  cases  at  least, become  iess 

expensive.  Furthermore,  the  importers'  arguments  miss  the  point  of 

anti-dumping  measures, which  is to  restore  healthy  competition  that  is 

not  distorted  by  unfair  practices. This objective would  be  compromised 

if  it  were  possible  for  importers  to  take  advantage  of  such  unfair 

compet it ion. 

-  22 -

3. 

Balanclna  the  interests 

54. 

Having  considered  the  arguments  set  out  above,  and  the 

significant  part  played  by  the  imports  in question  in  the  difficulties 

confronting  the  Community  polyester  fibre  industry,  the  Council 

concludes  that  Community  interest  requires  the  retention  of  the  anti-

dumping  measures  previously  imposed,  readjusted  in  I ine  with  the 

conclusions of  this enquiry. 

H.  NEWCOMERS 

55. 

For  producers  who  are  newcomers  to  the  market,  and  who  did  not 

export  during  the  reference  period,  the  Commission  is prepared  to  re-

examine  the  situation  if  the  exporters  concerned  can  demonstrate  that 

they  did  not  export  to  the  Community  during  the  period  of  the  enquiry 

(recital  9 ), that  they  began  to export  after  this period, and  that  they 

are  not  related  or  I inked  to  any  of  the  companies  covered  by  this 

enquiry. Such claims must  be supported  by appropMate  evidence. 

I. PERIOD OF VALIDITY OF THE  REGULATION 

56. 

This  Regulation  should  be  considered  an  amendment  to Regulation 

(EEC) No 3946/88 

within 

the 

meaning 

of 

Article 

15(1) 

of 

Regulation  (EEC) No 2423/88. The  measures  will  therefore  lapse  after  a 

period  of  five  years  starting  from  the  date  on  which  this  Regulation 

enters  into force, 

HAS ADOPTED THIS REGULATION: 

-  23 -

Article 1 

Article  1  of  Regulation  (EEC)  No  3945/88  is  hereby  replaced  by  the 

following: 

"Article 1 

1. 

A  definitive  anti-dumping  duty  is hereby  imposed  on  imports of 

synthetic  polyester  fibres 

falling 

within  CN  code  5503 20 00  and 

originating  in  Talwan,  Romania,  Turkey  and  the  Yugoslav  Republics  of 

Serbia, Montenegro and Macedonia. 

2. 

The  duty,  calculated  on  the  basis  of  the  free-at-Community-

frontier  prlce of  the product, not  cleared  through  customs, shall  be: 

13%  for  polyester  fibres originating  in Taiwan  (additional  taric 

code  8195),  with  the  exception  of  those  produced  by  the 

companies  listed  below,  to  which  the  following  rates  shall 

apply: 

Far  Eastern Textile Ltd., Taipei 

6.8% 

(Additional  taric code 8192) 

Nan Ya Plastics Corp., Taipei 

5.9% 

(Additional  taric code 8193) 

Shingkong Synthetic Fibres Corp., Taipei 

13.0% 

(Additional  taric code 8194) 

15.6%  for polyester  fibres originating  in the Yugoslav  Republics 

of Serbia, Montenegro  and Macedonia 

(Additional  taric code  8263) 

11.4%  for polyester  fibres originating  in Turkey 

(Additional  taric code 8198) 

14.1%  for polyester  fibres originating  in Romania 

(Additional  taric code  8262). 

-  24 -

3. 

The  definitive  anti-dumping  duties  applicable  to  synthetic 

polyester  fibres  falling  within  CN  code  5503 20 00  and  originating  in 

the  United  States  of  America  and  Mexico  are  hereby  repealed  and  the 

proceeding  with  regard  to these  two countries  is hereby  terminated. 

4. 

The provisions  in force concerning  customs duties shall  apply." 

Artlcle  2 

This Regulation shail  enter  into force on  the day  following  that of  its 

publication  in the Official  Journal  of  the European  Communities. 

This  Regulation  shall  be  binding  in  its  entirety  and  directly 

applicable  in all Member  States. 

Done at Brussels, 

For  the Council 

The President 

ISSN 0254-1475 

COM(92) 304 final 

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