Proposal for a COUNCIL REGULATION (EC) terminating the review of anti-dumping measures concerning imports of certain acrylic fibres originating in Mexico and repealing the measures applying to such imports
Date: 1994-05-05
Institutions: European Commission
Subjects: Mexico, import, man-made fibre, originating product, trade regulations

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

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C0MC94) 178 final 

Brussels, 05.05.1994 

Proposal  for a 

Çff}\m\l  REGULATION  (EC) 

terminating the review of anti-dumping measures  concerning 

imports of certain acrylic fibres originating  in Mexico 

and repealing the measures applying to such  imports 

(presented  by the Commission) 

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-  A  -

EXPLANATORY MEMORANDUM 

1.  In  October  19 89,  definitive  anti-dumping  measures  in  the  form  of 
duties and undertakings were imposed on imports of certain acrylic 
fibres originating in Mexico^1). 

2.  A  request  for  a review  of  the measures  was  subsequently  received 
from  the  majority  of  the  Mexican  producers  concerned.  These 
companies  requested  to  be  released  from  their  price  undertakings 
and  have  the measures  in  force repealed.  Following  consultations 
within  the Advisory  Committee, it was considered  that the  request 
contained  sufficient evidence to justify initiating a review under 
Article  14  of  Regulation  (EEC) No.  2423/88(2)  on  the  grounds  of 
changed circumstances. 

3.  Accordingly,  the  Commission  published  a  notice  in  the  Official 
Journal  of  the  European  Communities(3)  and  commenced  an 
investigation. 

4.  With  regard  to  injury,  it  was  established  that  the  Community 

industry had not suffered material injury. 

5.  The  question  of whether  recurrence  of  injury  or  threat  of  injury 
is likely to occur in the event of the measures being repealed has 
also  been  addressed.  It  has  been  concluded,  for  the  reasons 
contained  in the draft Regulation, that it is not foreseeable that 
the  repeal  of  the  anti-dumping  measures  would  result  in  dumped 
imports  of  acrylic  fibres  from  Mexico  regaining  a  share  of  the 
Community  market  sufficient  to  cause 
injury  and  that, 
consequently,  such  repeal  would  not  lead  to  a  recurrence  of 
material injury to the Community  industry  concerned. 

6. 

It is therefore proposed that the present review be terminated and 
the anti-dumping measures currently  in force be repealed. 

(1)  OJ No. L 301, 19.10.1989, p. 1 

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

(3)  OJ No. C 154, 5.6.1993, p. 7 

—  4 SL  _ 

Council Regulation  (EC) 

of 

terminating the review of anti-dumping measures concerning 

imports of certain acrylic  fibres originating  in Mexico 

and repealing the measures applying to such imports 

The Council of the European Union, 

Having regard to the Treaty establishing the European Community, 

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

protection  against  dumped  or  subsidised  imports  from  countries  not 

members  of  the  European  Community(1)  as  last  amended  by  Regulation 

(EC) No  522/94 of  7 March  1994(2), and in particular Articles  9 and  14 

thereof, 

Having  regard  to  the  proposal  submitted  by  the  Commission  after 

consultation  within  the  Advisory  Committee  as  provided  for  under  the 

above-mentioned Regulation, 

Whereas : 

(1)  OJ No L 209, 02.08.1988, p. 1 

(2)  OJ No L 66, 10.03.1994, p. 10 

- 2 -

A. PREVIOUS PROCEDURE 

(1)  By 

Decision 

86/46 8/EEc(^), 

the 

Council 

accepted 

price 

undertakings  for imports of certain acrylic  fibres originating in, 

inter alia, Mexico. 

(2)  Early  in  1988,  the  International  Rayon  and  Synthetic  Fibres 

Committee  ("IRSFC") acting  on  behalf  of  producers  accounting  for 

virtually  the  entire  Community  output  of  the  acrylic  fibres 

concerned,  asked  the  Commission  to  review  the  anti-dumping 

measures  applicable  to  imports  from  Mexico  and  to  re-open  the 

investigation. 

(3)  The  Advisory  Committee  having  been  consulted,  it  was  considered 

that  the  request  contained  sufficient  evidence  of  changed 

circumstances  to warrant  a review, under Article  14 of  Regulation 

(EEC)  No  2423/88  as  last  amended  by  Regulation  (EC)  No  522/94 

(hereafter referred to as "the basic Regulation"). 

(4)  The  Commission  therefore  published  a  notice  in  the  official 

Journal of  the European Communities(4) announcing  a review of the 

measures and reopening of the investigation. 

(5)  As  a  result  of  this  review,  the  Council, by  Regulation  (EEC) No 

3121/89<5),  modified  the  measures  applicable  to  imports  of 

certain  acrylic  fibres originating  in Mexico by  imposing  residual 

duties  and  accepting  new  or  revised  undertakings  from  five 

companies. 

(3)  OJ No L 272, 24.09.1986, p. 29 

(4)  OJ No C 117, 04.05.1988, p. 3 

(5)  OJ No L 301, 19.10.1989, p. 1 

-  3 -

(6)  Subsequently,  the  Commission  received  a  request  for  a  review  of 

the  measures  from  three  of  the  Mexican  companies  who  had  given 

undertakings  in  1989.  These  companies  requested  to  be  released 

from their price undertakings and have Regulation  (EEC) No 3121/89 

repealed  on the grounds that the prices  of imports originating  in 

Mexico  were  higher  than  those  of  the  Community  producers,  that 

Mexican  export  prices  were  significantly  higher  than  those  of 

other  third  countries  selling  to  the  Community  and  that  the 

Mexican  products  concerned  held  a  "de-minimis"  share  of  the 

overall  Community  Market.  Following  consultations  with  the 

Advisory  Committee,  it was  considered  that  the  request  contained 

sufficient  evidence  to  justify  initiating  a  review  under  Article 

14  of  the  basic  Regulation  on  the  grounds  of  changed 

circumstances. 

(7)  Accordingly,  the  Commission  published  a  notice  in  the  Official 

Journal  of  the  European  Communities(^)  and  commenced  an 

investigation. 

(8)  The  Commission  officially  notified  the  Community  producers, 

exporters  and  importers  known  to  be  concerned  and  the 

representatives  of the exporting country  of the  initiation  of the 

proceeding  and  gave the parties  concerned the opportunity  to make 

their views known in writing and to request a hearing. 

(9)  The  Commission  sought  and  verified  all  the  information  it  deemed 

to be  necessary  for  the  purpose  of  its  investigation  and  visited 

the premises of the following companies: 

(6)  OJ No C 154, 05.06.1993, p. 7 

-  4 -

(a) community producers: 

-  Courtaulds Fibres Ltd, Bradford 

Courtaulds Espana S.A.,  Barcelona 

-  Enichem Fibre S.p.A., Milan 

-  Fibras Sinteticas de Portugal S.A.,  Barreiro 

-  Montefibre S.p.A., Milan 

(b) Mexican exporters: 

Acrilia S.A. de C.V., Mexico City 

Celulosa y Derivados S.A. de C.V.,  Guadalajara 

Crisol International S.A. de C.V., Mexico City 

-  Crisol Textil S.A.  de C.V., Mexico City 

Fibras Sinteticas S.A. de C.V., Mexico City 

(c) Unrelated importer: 

Kaben S.A.,  Terrassa  (Barcelona) 

It  should  be  noted  that  one  Community  producer,  Bayer  AG  of 

Dormagen,  submitted  a  reply  to  the  Commission's  questionnaire 

outside  the  time  limit  laid  down  for  the  purposes  of  receipt  of 

replies  to  the  questionnaire.  Since  taking  the  information  into 

account  would  have  delayed  investigation,  in  this  proceeding,  in 

accordance  with  Article  7(7)(b)  of  the  basic  Regulation,  the 

findings  on  injury  have  been  based  on  the  facts  available,  i.e. 

data  submitted  by  the  cooperating  Community  producers  which 

accounted  for a major proportion  (56%) of the Community  output of 

the product concerned and verified by the Commission. 

-  5 -

(10) The Community  producers, the exporters  and the  unrelated  importer 

which  cooperated  requested  and  were  informed  of  the  essential 

facts  and considerations  on the basis of which  it was  intended  to 

recommend  the  termination  of  the  review  and  repeal  the  anti 

dumping  measures.  The  Commission  took  into  account,  where 

appropriate, the submissions of the parties concerned. 

(11) The  investigation  of dumping covered  the period  from  1 April  1992 

to 31 March 1993. 

B. PRODUCT 

(12) The products  concerned  by this review proceeding  are  identical  to 

the  products  subject  to  the  definitive  measures  referred  to  in 

recital 5, namely: 

acrylic  filament tow  (commonly known as "acrylic  tow"); 

acrylic  staple  fibres,  not  carded,  combed  or  otherwise 

processed  for spinning  (commonly known as "acrylic  staple"); 

acrylic  staple  fibres, carded,  combed  or  otherwise  processed 

for spinning  (commonly known as "acrylic  tops"). 

It  should  be  noted  that  acrylic  staple  and  acrylic  tops  are 

derived  directly  from  acrylic  tow  and  thus  form  a  family  of 

closely-related  products.  As  it  is  also  normally  the  case  that 

acrylic  fibre  producers  manufacture  and  sell  all  three products, 

for the purposes  of this  investigation  they  have been regarded  as 

one  product  and,  unless  otherwise  specified,  are  referred  to  in 

this Regulation as "acrylic fibres". 

- 6 -

C. DUMPING 

(13) The question  of dumping by  the Mexican exporters was  investigated 

fully  by  the  Commission.  However,  in  view  of  the  conclusions 

drawn  later  in  this  Regulation  with  regard  to  injury  and 

likelihood  of  further  injury  in  the  event  of  repeal  of  the 

existing measures, it is not considered  necessary  to examine  this 

question in the present Regulation. 

D. INJURY 

1. Volume, market share and prices 

(a) Volume of dumped imports 

(14) It was established that between 19 89 and the investigation period, 

the  volume  of  acrylic  fibres  imported  into  the  Community  of 

Mexican  origin  rose  slightly  from  2,331  tonnes  to  2,576  tonnes. 

In  terms  of  the  market  share  of  these  Mexican  imports  over  the 

same period, this remained  stable  at around  0.6% of the Community 

market. 

(b) Prices of the dumped  imports 

(15) A  price  comparison  was  made  between  the  ex-works  prices  of  the 

Community  producers  and  the  duty  paid  prices  of  acrylic  tops 

exported by the Mexican producers during the investigation period. 

The  comparison  shows  that  the  Mexican  imports  were  undercutting 

the Community producers by 2.3%. 

-  7 -

(c) Consumption in the Community 

(16) With regard to consumption of acrylic  fibres in the Community, it 

was  found  that  this  had  fallen  from  430,461  tonnes  in  19 89  to 

404,653 tonnes during the investigation period, a drop of 5.9%. 

2. Situation of the Community  industry 

(a) Production, capacity and utilisation of capacity 

(17) Total production  volumes  of those companies which  cooperated  with 

the Commission's investigation rose from 374,000 tonnes in 1989 to 

410,000  tonnes  in  the  investigation  period,  an  increase  of  9.6%. 

It  should  also  be  noted  that  information  available  to  the 

Commission indicates that there was a rise in production volume of 

7.6%  among  those  companies  which  failed  to  cooperate  with  the 

investigation. 

(18) Capacity  utilisation  for  the  cooperating  Community  producers 

during the investigation period was found to be at least 90%. 

(b) Sales volumes and market share 

(19) The quantities  of acrylic  fibres  sold  in the Community  by  all the 

Community producers dropped from 402,000 tonnes in 1989 to 378,000 

tonnes  during  the  investigation  period,  a  fall  of  6%.  On  the 

other hand, the overall market  share of these community  producers 

remained stable at around 93% over the same period. 

-  8 -

(c) Price evolution 

(20) The  investigation  showed  that  weighted  average  ex-works  sales 

price  in the Community  of the Community  producers  dropped  by  8.1% 

in  the  case  of  acrylic  tow  between  1989  and  the  investigation 

period, by  6.3%  in the  case  of  acrylic  staple  and  by  2.3%  in the 

case of acrylic tops. 

(d) Profits 

(21) During  the  investigation  period,  the  cooperating  Community 

producers  achieved  a  weighted  average  net  profit  on  turnover  of 

9.6%  for sales of acrylic  fibres.  The profit margin was  10.5% in 

1992 and 9.8% in 1991. 

(e) Conclusions 

(22) In  drawing  conclusions  from  the  above  data,  it  should  be 

remembered  that  between  1986  and  the  investigation  period,  anti 

dumping measures  in the  form  of  price  undertakings  were  in  force 

against  imports  of  Mexican  acrylic  fibres  and  acrylic  fibres  of 

other  third  country  origin.  Overall  demand  in  the  Community  for 

acrylic  fibres  has  shrunk  since  19 89  and  this  decline  in  demand 

has caused  a corresponding  downturn  in both the  sales volumes  and 

sales prices achieved by the Community producers. 

On  the  other  hand,  the  Community  producers  have  increased  their 

production volume  over this period, maintained  very  high  capacity 

utilisation levels and also achieved  levels of profitability which 

are not unreasonable. 

-  9 -

(23) In view of  the  above  factors, it  is concluded  that the CoHMftity 

industry  did  not  suffer  material  injury  within  the  meaning  of 

Article 4(1) of the basic Regulation. 

E. LIKELIHOOD OF FURTHER INJURY IN THE EVENT OF REPEAL 

OF THE EXISTING ANTI-DUMPING MEASURES 

1.  Preliminary  considerations 

(24) The  fact that the dumped  imports are not currently  causing  injury 

is not, by itself, a reason for removing the existing  anti-dumping 

measures.  In  such  circumstances  and  within  the  framework  of  a 

review  initiated  at  the  request  of  the  majority  of  Mexican 

producers, the question has to be considered  of whether repealing 

the anti-dumping measures would  lead  again to injury  or threat of 

injury.  In  this  regard,  it  must  be  determined  whether  a 

recurrence  of  injury  to  the  Community  industry  caused  by  dumping 

of  Mexican  products  would  be  foreseeable  in  the  absence  of 

measures. 

(25) To this  end,  the  production  volume  and  capacities  in Mexico, the 

profits  and  sales  levels  of  Mexican  producers  on  the  Mexican 

market,  the  profits  and  sales  levels  of  Mexican  producers  on 

markets  other  than  Mexico  or  the  Community  and  general 

developments  in trade have all been taken into account. 

-  10 -

2. Production volume and capacity in Mexico 

(26) The  investigation  established  that  the  production  volume  of 

acrylic  fibres of the Mexican producers had risen by  approximately 

20%  between  1989  and  the  investigation  period.  Capacity 

utilisation had remained fairly static at around 88%. 

In  this  regard,  the  Community  industry  stated  that  the  Mexican 

producers have plans to further enlarge their capacity and step-up 

exports  to the Community  to  fill this extra capacity, however, no 

evidence  to  support  these  allegations  was  provided  and  no 

indications  leading  to  this  conclusion  were  found  during  the 

investigation. 

3. Sales and profits in Mexico 

(27) Contrary  to  the  allegations  made  during  the  course  of  the 

investigation  by  the  Community  producers,  it  was  found  that  the 

Mexican  producers  had  made  reasonable  profits  on  their  sales  of 

acrylic  fibres  in  Mexico.  In  recent  years,  weighted  average 

domestic  profits  ranged  from  13.8% to  19%.  Such  domestic  sales 

represent, on average, approximately  75% of the Mexican producers' 

total  sales  and,  in  terms  of  volume,  had  increased  by 

approximately  12% between  1989 and the investigation period. 

-  11 -

4. Sales and profits in the  Community 

(28) The  investigation  showed  that  the Mexican  producers' export  sales 

to  the  Community  account  for  less  than  1% of  their  total  sales. 

With  regard  to the profits  and  sales in the Community  achieved by 

such  sales,  it  was  found  that  the  Mexican  peso  had  appreciated 

against  the ECU when comparing  the exchange  rate at the beginning 

of  the  investigation  period  with  the  exchange  rate  at  the  end  of 

that  period.  In  conjunction  with  the  Community  producers' 

declining  sales  prices  in  the  community,  this  led  to  a  situation 

where  exports  at  the  new  exchange  rate  levels  left  the  Mexican 

producers with relatively uncompetitive  duty paid import prices. 

5. Volume and profits in other markets 

(excluding the  Community) 

(29) During  the  investigation  period,  it  was  found  that  the  sales  of 

acrylic  fibres  to markets  other  than Mexico  and the Community  and 

which  accounted  for approximately  24% of the  investigated  Mexican 

producers' total  sales, were mainly  in Latin America.  Such  sales 

achieved weighted average profits of approximately  2% on turnover. 

-  12 -

6. General developments  in trade 

(a) Decline of the Chinese market 

(30) Information  supplied  during  the  investigation  showed  that  until 

the end of  1992, the People's Republic of China was a major buyer 

of  acrylic  fibres  manufactured  by  Community  producers.  Data 

concerning  sales  to  China  showed  that  such  sales  represented 

approximately  16%  of  the  total  output  of  the  Community  acrylic 

fibre  industry.  In  1993, however,  China  drastically  reduced  its 

import  requirements  and  the  latest  information  available  shows 

that Community producers only exported amounts there equivalent to 

1.7% of total Community production during the first half of 1993. 

(31) Clearly,  in  order  to  maintain  high  production  and  capacity 

utilisation  levels, the Community producers have had to react very 

quickly  and  find  alternative  markets  for  their  products.  The 

problem  for  them  has  been  exacerbated  by  the  declining  demand 

within  the  Community  for  acrylic  fibres  (see  recital  16)  and, 

unless  new export markets  can  be  found, the  EC  producers will  be 

faced  with  excess  capacities  combined  with  falling  prices  and 

profits  as  competition  amongst  themselves  increases  both  inside 

and outside the Community. 

-  13 -

(b) General decline in demand 

(32) As  has  been  shown  in this  Regulation, consumption  and  demand  for 

acrylic  fibres  has  fallen  and  this  decline  looks  set  to  continue 

into  the  future.  In  addition  to the  loss of  the  Chinese  market, 

the Community  producers  have attributed  the fall  in demand partly 

to a trend  among Community  clothing manufacturers  to make  lighter 

weight  garments  which  means  that  less  acrylic  fibre  is  required. 

Also,  consumer  taste  in  the major  developed  markets  of  the  world 

has  moved  away  from  articles  made  from  artificial  and  synthetic 

fibres to articles made  from natural fibres  such as cotton, wool, 

linen, etc. 

Given this  situation and  in view of the problems  already  faced by 

Mexican  exporters  in  remaining  competitive  at  current  price 

levels,  it  is  considered  unlikely  that  they  will  be  able  to 

increase  their  sales  levels  of  acrylic  fibres  to  the  Community 

particularly  if prices fall even further. 

(c) The North American Free Trade Agreement 

(NAFTA) 

(33) It has been  argued  that  another  factor which will  have  an  impact 

on  the way  that Mexican  producers  trade  in acrylic  fibres  is  the 

NAFTA  Agreement.  Notwithstanding  the  overall  decline  in  demand 

for acrylic  fibres  as mentioned  in recital  32, North America will 

still  remain  a huge market  and  it  is  likely  that  improved  access 

to  this  market  for  finished  and  part-finished  Mexican  textile 

products  will  significantly  increase  the  demand  for  Mexican 

acrylic  fibres.  In  the  present  circumstances,  it  is  considered 

that  the North American market  is  likely  to be  a more  attractive 

market for the Mexican exporters than the Community. 

-  14 -

(d) Conclusion 

(34) All  the  above  factors  lead  to the  conclusion  that  it  is  unlikely 

that  the  Mexican  producers  will  significantly  increase  their 

exports  to  the  Community, even  if  the  anti-dumping  measures  were 

no longer in force. 

F. GENERAL CONCLUSION ON THE IMPACT OF 

REPEALING THE EXISTING MEASURES 

(35) Taking  into  account  all  factual  data  available,  it  has  been 

concluded  that it is not foreseeable that the repeal of the  anti 

dumping measures would  result in dumped  imports  of  acrylic  fibres 

from  Mexico  regaining  a  share  of  the  market  sufficient  to  cause 

injury.  Accordingly,  it  is considered  that such repeal would  not 

lead to a recurrence  of material  injury  to the Community  industry 

concerned.  The present  review  should  therefore  be terminated  and 

the anti-dumping measures currently  in force be repealed. 

(36) It  is  noted,  however,  that  should  there  be  any  significant 

increase of imports of acrylic tow, acrylic  staple or acrylic tops 

originating  in Mexico at dumped prices, the Community  Institutions 

would, on the basis of a duly supported complaint by the Community 

industry,  consider  re-opening  expeditiously  a  new  anti-dumping 

proceeding concerning such imports, 

Has adopted this Regulation: 

- 15 -

Article 1 

council Regulation (EEC) No 3121/89 modifying the anti-dumping measures 

applicable to imports of certain acrylic fibres originating  in Mexico 

by introducing an anti dumping duty on such imports, other than those 

from  exporters  to  the  Community  whose  undertakings  are  accepted  is 

hereby repealed and Council Decision (EEC) No 86/468 is hereby repealed 

insofar as it has not lapsed or it has not been repealed  by Council 

Regulation (EEC) No 3121/89. 

Article 2 

This  Regulation  shall  enter  into  force  on  the  day  following  its 

publication in the Official Journal of the European Community. 

This  Regulation  shall  be  binding  in  its  entirety  and  directly 

applicable in all Member States. 

Done at Brussels 

For the Council 

4(o 

ISSN 0254-1475 

COM (94) 178 final 

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