Report from the Commission to the European Parliament - 26th annual report on the community's anti-dumping, anti-subsidy and safeguard activities (2007) [SEC(2008) 3073]
Date: 2008-12-19
Institutions: European Commission
Subjects: European Community, activity report, anti-dumping legislation, anti-subsidy proceeding, protective clause

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 19.12.2008 
COM(2008) 877 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT 

26th annual report on the community's anti-dumping, anti-subsidy and safeguard 
activities 

(2007) 

[SEC(2008) 3073] 

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INTRODUCTION 

This  2007  report  is  submitted  to  the  European  Parliament  following  its  resolution  of  16 
December 1981 on the Community’s anti-dumping activities, and the report of its Committee 
on industry, external trade, research and energy.  

This short report provides an overview of the highlights during 2007 and is supplemented, as 
in  previous  years,  by  a  more  detailed  Commission  Staff  Working  Document,  together  with 
detailed  annexes.  This  report  follows  the  same  general  structure  of  the  Working  Document, 
including all its headings, for easy reference to more comprehensive information. 

The present report and the full Working Document are also available to the public at 
http://europa.eu.int/comm/trade/issues/respectrules/anti_dumping/legis/index_en.htm 

2007 saw the continuation of the Trade Defence Instruments (TDI) review, which had been 
launched in 2006, with strong participation from stakeholders in the process during the year. 
Also in 2007 the Trade Defence Services were re-organised as part of an overall re-structuring 
of DG Trade. This also involved the creation of an independent Hearing Officer in DG Trade.  

1. 

OVERVIEW OF THE LEGISLATION 

Anti-dumping  (AD),  anti-subsidy  (AS)  and  safeguard  (SFG)  investigations  are 
conducted  on  the  basis  of  basic  Council  Regulations.  An  overview  of  the  existing 
legislation  is  given  in  the  Working  Document.  The  basic  AD  and  AS  texts  will 
hereafter be referred to as the "basic Regulation(s)".  

2. 

BASIC CONCEPTS 

Heading  2  in  the  working  document  gives  an  overview  of  the  terminology  and 
procedures used in TDI investigations. 

3. 

TDI REVIEW– CONTINUATION OF PROCESS LAUNHED IN 2006  

In  2007  the  Commission  continued  with  the  TDI  review  process  which  had  been 
launched  in  2006.  In  aiming  to  ensure  that  the  EU's  trade  defence  instruments 
continue to work as effectively as possible, taking into account the rapid changes in 
the global economy, the process involved the participation of many stakeholders.  

The Commission organised a public hearing on the subject in March 2007 which was 
attended  by  a  large  number  of  stakeholders  and  was  well  received  by  participants. 
The process generated a huge number of submissions, all of which have been posted 
online on the Commission's website.  

The public consultation identified a need to improve the accessibility, transparency, 
speed and clarity for business. 

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Drawing  on  the  outcome  of  the  public  consultation  the  Commission  worked  on  a 
number  of  proposals  to  amend  the  EU's  trade  defence  rules.  The  results  of  the 
Commission's assessment of the public consultation were published in autumn 2007. 

The Commission's approach generated a lively discussion among Member States and 
stakeholders on this politically sensitive issue and generated vigorous debate during 
2007.  The  analysis  of  the  discussion  revealed  that  there  was  not  yet  sufficient 
consensus among Member Sates and stakeholders for the adoption of a package on 
TDI review.  

The European Parliament has also shown a close interest in the TDI review process 
and was up-dated regularly by the Commission. 

4. 

COUNTRY-WIDE MARKET ECONOMY STATUS (MES) 

For  the  purposes  of  anti-dumping  investigations  a  country  can  be  considered  a  full 
market economy  if it fulfils  five criteria which are set  out  in detail  in  the Working 
document attached to this report.  

During  2007  the  Commission  services  continued  to  evaluate  requests  for  country-
wide  MES  from  China,  Vietnam,  Armenia,  Kazakhstan  and  Mongolia.  All  five 
countries  continued  to  provide  additional  information  in  support  of  their  claims 
throughout the year.  

The countries concerned are at various stages in their progress as are the evaluations 
for MES. 

In  addition  to  a  number  of  bilateral  meetings  with  the  countries  concerned,  March 
2007 saw the first meeting of the EU-Vietnam MES Working Group, while for China 
the seventh meeting of the dedicated MES Working Group took place in July 2007. 
At  that  EU-China  meeting,  the  group  discussed  a  short  updated  assessment  report 
which  had  been  prepared  by  the  Commission.  In  the  report  the  progress  made  by 
China  was  acknowledged  but  it  was  concluded  that  further  specific  steps  were 
needed  to  ensure  China  complies  with  the  four  outstanding  criteria.  It  was  also 
foreseen that a more comprehensive report would be prepared in 2008.  

Specific MES missions took place to Kazakhstan (February 2007) and Armenia (July 
2007), while plans for a further mission to Mongolia were considered at the end of 
the year.  

5. 

INFORMATION AND COMMUNICATION ACTIVITIES / BILATERAL CONTACTS 

In 2007 the Trade Defence Helpdesk for SMEs, which had been set up in December 
2004, continued to address specific SME questions/problems regarding TDIs, both of 
a general nature or case-specific. Information and training seminars for third country 
government representatives and for economic operators, both within and outside the 
EU,  continued  to  be  an  important  part  of  the  activities  of  the  TDI  Services  during 
2007. 

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6. 

OVERVIEW OF AD, AS AND SFG INVESTIGATIONS AND MEASURES 

6.1. 

General 

At the end of 2007, the Community had 127 AD measures (see Annex O) and 9 AS 
measures (see Annex P) in force. 

In  2007,  0,73%  of  total  imports  into  the  Community  was  affected  by  AD  or  AS 
measures. 

Please note that details on the issues hereafter are given in the Working  Document 
attached to this report. The references to the Annexes of the Working Document can 
be found beside the titles.  

6.2. 

New investigations (see Annexes A through E and Annex N) 

In  2007,  9  investigations  were  initiated1.  Provisional  duties  were  imposed  in  12 
proceedings.  12  cases  were  concluded  with  the  imposition  of  definitive  duties.  10 
proceedings  were  concluded  without  measures.  Another  18  anti-dumping  measures 
were allowed to expire automatically following their 5-year duration. 

6.3. 

Review investigations 

Review  investigations  continue  to  represent  a  major  part  of  the  work  of  the  TDI 
services.  In  the  period  2003-2007  they  accounted  for  65%  of  all  investigations 
initiated.  Table  2  in  the  Working  Document  provides  statistical  information  for  the 
years 2003-2007. 

6.3.1.  Expiry reviews (see Annex F) 

Articles  11(2)  and  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.  

During 2007, 11 expiry review investigations were initiated. 13 expiry reviews were 
concluded  with  a  confirmation  of  the  duty  for  a  further  period  of  5  years.  3  expiry 
reviews were concluded by the termination of measures.  

6.3.2. 

Interim reviews (see Annex G) 

Articles  11(3)  and  19  of  the  basic  Regulations  provide  for  the  review  of  measures 
during their period of validity. Reviews can be limited to dumping/subsidization or 
injury aspects. 

During  2007,  a  total  of  24  interim  reviews  were  initiated.  11  interim  reviews  were 
concluded with confirmation or amendment of duty. 8 investigations were concluded 
with the termination of measures.  

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Table  1  in  the  Working  Document  provides  statistical  information  on  the  new  investigations  for  the 
years 2003 – 2007 carried out under the provisions of Articles 5 and 10 of the basic Regulations. 

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6.3.3.  “Other” interim reviews (see Annex H) 

A  series  of  other  reviews,  not  falling  under  Articles  11(3)  or  19  of  the  basic 
Regulations or for which no notice of initiation was published in the Official Journal, 
were concluded during 2007.  

8  such  reviews  were  concluded  in  2007.  They  specifically  concern,  inter  alia,  the 
acceptance,  voluntary  withdrawal  or  breach  of  undertakings,  new  exporter  requests 
in sampling cases, suspension of measures, etc.  

6.3.4.  New exporter reviews (see Annex I) 

Articles 11(4) and 20 of the basic Regulations respectively provide for a “newcomer” 
and  “accelerated”  review  in  order  to  establish  an  individual  dumping  margin  or  an 
individual countervailing duty for new exporters located in the exporting country in 
question  which  did  not  export  the  product  during  the  investigation  period.  Such 
exporters  have  to  show  that  they  are  genuine  new  exporters  and  that  they  have 
actually started to export to the Community after the investigation period. As such, 
an  individual  duty,  which  is  usually  lower  than  the  country-wide  duty,  can  be 
calculated for them.  

In 2007, 2 new exporter reviews were initiated.  

6.3.5.  Absorption investigations (see Annex J) 

Where  there  is  sufficient  information  showing  that,  after  the  original  investigation 
period  and  prior  to  or  following  the  imposition  of  measures,  export  prices  have 
decreased or that there has been no or insufficient movement in the resale prices or 
subsequent selling prices of the imported product in the Community, an "absorption" 
review may be opened to examine whether the measure has had effects on the above-
mentioned  prices.  Dumping  margins  may  as  such  be  recalculated  and  the  duty 
increased to take account of such lower export prices. The possibility of "absorption" 
reviews is included in Articles 12 and 19(3) of basic Regulations. 

In 2007, 1 anti-absorption review was concluded with an increase of the duty. 

6.3.6.  Circumvention investigations (see Annex K) 

The possibility of investigations being re-opened in circumstances where evidence is 
brought to show that measures are being circumvented is foreseen in Articles 13 and 
23 of the basic Regulations. 

In 2007, 4 such investigations were initiated. 1 anti-circumvention investigation was 
concluded with extension of the duty and 2 were concluded without the extension of 
the duty.  

6.4. 

Safeguard investigations (see Annex L) 

During  2007,  the  only  safeguard  measure  which  had  been  in  place  expired, 
concerning imports of certain citrus fruits. 

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7. 

ENFORCEMENT OF AD/AS MEASURES 

7.1. 

Follow-up of measures 

The  follow-up  activities  concerning  measures  in  force  were  centred  on  four  main 
areas: (1) to pre-empt fraud; (2) to monitor trade flows and market developments; (3) 
to  improve  the  effectiveness  with  the  appropriate  instruments  and  (4)  to  react  to 
irregular  practices.  These  activities  enabled  the  TDI  services  to  be  more  pro-active 
rather than simply reactive in the enforcement field. 

7.2.  Monitoring of undertakings (see Annexes M and Q) 

Monitoring  of  undertakings  forms  part  of  the  enforcement  activities,  given  that 
undertakings  are  a  form  of  AD  or  AS  measures.  They  are  accepted  by  the 
Commission if it is satisfied that they can effectively eliminate the injurious effects 
of dumping or subsidisation. 

At  the  beginning  of  2007,  there  were  43  undertakings  in  force.  During  2007,  the 
following  changes  to  the  portfolio  of  undertakings  took  place:  undertakings  of  8 
companies  came  to  an  end  and  3  offers  for  undertakings  have  been  accepted.  This 
brings the total number of undertakings in force at the end of 2007 to 38. 

8. 

REFUNDS (SEE ANNEX U) 

Articles  11(8)  and  21(1)  of  the  basic  Regulations  allow  importers  to  request  the 
reimbursement  of  the  relevant  collected  duties  where  it  is  shown  that  the 
dumping/subsidy margin, on the basis of which duties were paid, has been eliminated 
or reduced to a level below that of the duty in force. 

During  2007,  8  new  refund  requests  were  lodged.  5  cases  were  closed,  no  full  or 
partial  refunds  were  granted,  3  refund  requests  were  rejected  and  2  requests  were 
withdrawn. 

9. 

JUDICIAL REVIEW: DECISIONS GIVEN BY THE COURT OF JUSTICE (COJ) / COURT OF 
FIRST INSTANCE (CFI)  

In 2007, the Court of Justice (COJ) and the Court of First Instance (CFI) rendered 1 
judgment  each  relating  to  the  areas  of  anti-dumping  or  anti-subsidy.  The  COJ  also 
issued  1  order  removing  a  case  from  the  register  and  the  CFI  issued  3  orders 
removing  cases  from  the  register.  A  summary  of  the  judgments  is  given  in  the 
Working Document. 

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10 new cases were lodged in 2007, all before the CFI.  

A list of the AD/AS cases before the CFI and the CoJ still pending at the end of 2007 
is given in Annex S of the Working Document. 

10. 

ACTIVITIES IN THE FRAMEWORK OF THE WORLD TRADE ORGANIZATION (WTO) 

10.1.  Dispute settlement in the field of AD, AS and SFGs  

The WTO provides for a rigorous procedure for the settlement of disputes between 
WTO Members concerning the application of the WTO agreements 

In 2007 a WTO Panel, which had been established following a request from Norway 
challenging  EU  AD  measures  on  Salmon,  issued  its  report.  The  results  were 
somewhat mixed for the EU, 'winning' on some important points relating to its policy 
and practice while on a number of technical specific issues the EU lost.  

Further  details  on  the  case  are  given  in  the  Working  Document  attached  to  this 
report. 

10.2.  Other WTO activities  

In  2007,  the  DDA  Negotiating  Group  on  rules  continued  to  meet  regularly  on  an 
informal basis to discuss the various textual proposals submitted by Members in the 
three negotiating areas, i.e. anti-dumping, industrial subsidies and fisheries subsidies.  

In  November  2007,  the  Chair  of  the  Negotiating  Group  issued  a  first  draft  text 
covering anti-dumping, general subsidies and fisheries subsidies. A vast majority of 
the WTO membership, including the EU, felt that the draft was seriously unbalanced 
and  only  reflected  the  views  of  a  handful  of  members,  e.g.  allowing  zeroing,  a 
practice condemned by the Appelate Body. 

This was particularly the case in the anti-dumping and fisheries subsidies draft texts. 
This led many WTO members to call upon the Chair to produce a revised draft at the 
earliest possible time. 

In parallel to these activities, participation by the Commission services in the regular 
the  Anti-dumping,  Subsidies  and  Countervailing  and  Safeguards 
work  of 
Committees continued. 

11. 

CONCLUSION 

2007  saw  a  significant  drop  in  the  number  of  new  cases  initiated  as  well  as  the 
number  of  investigations  terminated  without  the  imposition  of  measures.  However, 
the number of measures imposed, both definitive and provisional, remained at a level 
close to that of 2006. Regarding reviews, there were more initiations in 2007 than in 
the previous year.  

The  TDI  review  process  continued,  provoking  lively  debate  and  generated  many 
submissions  from  stakeholders  during  the  year.  This  underlined  the  need  for  trade 

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defence instruments to  be used  in a  fair  and transparent way  while  fully respecting 
the rule of law.  

The  services  continued  to  carry  out  investigations  rigorously  and  professionally 
throughout the year. In this context the creation of an independent Hearing Officer in 
DG  Trade  further  endorsed  the  services'  ongoing  commitment  to  transparency  and 
the rights of interested parties in the process.  

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