CELEX: 51974PC0229
Language: en
Date: 1974-02-20
Title: Proposal for a REGULATION (EEC) OF THE COUNCIL subjecting to authorization the importation into Italy of tape recorders from Taiwan (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (74) 229
Vol. 1974/0044
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                  COM(74)229 final
                                                  Brussels , 20 February 1974
                                 Proposal for a
                        REGULATION ( EEC-) C? THE COUNCIL
               subjecting to authorization the importation into
                      Italy of tape recorders from Taiwan
                  ( submitted to the Council by the Commission)
   COM(74 ) 229 final
 ---pagebreak---                            EXPLANATORY MEMORANDUM
1 » During the years 1969-1972 the situation on the market in tape
recorders in Italy steadily worsened.     Imports from third countries
increased greatly and accounted for an ever-growing share of internal
consumption (1969 : 16$, 1972 : 54%).    According to Italian sources
the large increase in imports from third countries came almost entirely
from Japan ( imports from Japan : 1969 : 89 000 machines , 1972 : 429 000
machines ).
On the other hand , according to information supplied "by the Italian
Government at the time to justify the use of protective measures , the
average price of portable tape recorders imported into Italy had fallen
to 4 918 lire eacht     The low prices in question were considered to "be
an important factor when determining the damage .
According .to the same source Italian production during the same period
decreased from 380 000 machines in 1969 to 136 000 in 1972 .
In order to eliminate the substantial damage that the Italian industry
would have suffered from this development the Commission set up a
Community supervisory system and the Community, at the same time , adopted
a protective measure with effect from 1 April 1973 by subjecting imports
of tape recorders into Italy , to a quota erga omnes .     Imports were thus
limited to 225 000 machines for the period from 1 April i973 to 31 December
1973 corresponding to an annual import level of 300 000 machines .
  Commission Regulation (EEC ) No 1600/73 of 18 April 1973
  (OJ No L 121/73 , 8 May 1973 ) and Council Regulation (E3C ) No 162^73 of
  18 June 1973 (OJ No L 1 64/73 , 21 June 1973 ).
 ---pagebreak--- 2 . Conscious of the faot that the process of industrial reorganization in
Italy (where , according to information supplied by the Italian Government ,
production had meanwhile recovered aiid reached a level of approximately
200 000 machines in 1973^) should not be endangered by an uncontrolled
influx of imports after 31 Deoember 1973 when the abovementioned protective
measures were to expire , the departments of the Commission' held several
meetings within the framework of the procedure for applying Article XIX of
the GATT, at the request of the Japanese Government (principal supplier ) and
in the presence of delegates from the Italian Ministries in question .
At further meetings held on 20/22 and 28 and 29 November 1973 at the request
of the Japanese Government and at which the Italian authorities were also
present , Japan expressed its intention of voluntarily limiting its exports
                                                           2
of tape recorders to Italy to a level of 330 000 machines •
For this reason , in particular , the Commission decided that the introduction
of n«w measures based on Article XIX of the GATT after 31 December 1973
would not be justifiable#
On the other hand , the average Japanese price on importation - considered
to be a particularly disturbing feature in 1972 - had meanwhile reached a
level of 11 000 lire per machine#
3# However , having stated at the discussions at the end of November 1973 that
according to statistical information provided by Italy for the first six
months of 1973 , a new supplier 'from the Par East was taking its place beside
Japan, namely, Taiwan ( 33 728 machines for the first six months of 1973) »
the Commission set itself the task of examining the need for further-
"^On the basis of information received by the Commission in January 1974
  from the ANIE (the Association of the Italian electronics industry)
  production in 1973 was 380 000 machines#
^ile SEC(73) 4820 final , circulated by the Council as s/407/73 ( COMER 2^$)#
 ---pagebreak---  protective measures as regards that supplier »
 4. On 12 December 1973 the Italian Government , not being prepared to agree
 with the abovementioned conclusions , applied to the Commission for the
 continuation in 1974 of the import authorization system erga omnes limited
 to 300 000 machines .    The Commission rejected this application on the
                                                      _    .       x2
 basis of the above considerations (Decision of 19 December 1973 ) •      On
 20 December 1973 Italy referred this Decision to the Council .
 On 27 December 1973 the Italian Representative informed the Commission that
 from 1 January 1974» that is to say, after the expiry of protective measures
 then in force , its Government would subject to authorization the importation
 of tape recorders from third countries in the same quantitative limits as
 previously laid down arid that this protective measure would be taken pursuant
 to Article 12 of Regulation No 1025/70 "arid Article 9 of Regulation 109/70»
 The Commission confirmed its rejection of the Italian request by a Decision
cf 7 January 1974^*     Italy referred this Decision to the Council on
 12 January 1974«
   Information provided by Italy at the time concerning other Par Eastern
   countries only took account , in fact , of 6 544 machines from Hong Kong,
   none from Singapore and gave no detailed information as regards Korea.
   It should be noted , moreover , that the It alian Government had not
   supplied figures concerning imports from third countries that should have
   been sent regularly to the Commission pursuant to Article 9 of Regulation
   Ho 1025/70 , bearing in mind the Community supervisory procedure set up
   under Regulation No 106o/73» By virtue of these provisions every Member
   State is obliged to forward within the first ten days of each month , the .
  quantities and amounts corresponding to the import documents issued during
   the preceeding month , and the imports for the previous month.       ,    :
 ^Doc.- C0M(73)2225 circulated by the Council as S/2/74(C0MER l ).
 ■^Doc. C0M(73)2251 circulated by the Council as s/84/74(C0MER $5 )*      :
 ---pagebreak---                                              -4–
5 » In its appeal against the Commission Decisions the Italian Government
has emphasized the fact that the damage which might be caused to the
Italian tape recorder industry by the absence of autonomous protective
measures erga omnes is due to imports not only from Japan but also from
other countries of south-east Asiae             Italy stated that during the first
eight months of 1973 » such imports from Taiwan , in particular were as
follows"'' :
                             mi                                     1232 .
                        (January - August )                 ( January - August )
                       Ν                     value          Ν               Value
Total                   479 000           7 121 899         438 433     5 395 891
FKG                      65 027           1 157   870         50 426    1 319   925
Netherlands              98 741           2  135 088        108 111     1   960 024
Japan                   185 917           2  059 932        255 883     1   535 866
Taiwan                   42 737              167 384            a
South Korea              29 000              216 907            m
Singapore                17 280              285 156
Hong Kong                 6 961               59 .766
Total South East Asia    95        ν *· ·
                                             729 213
Total for Asia          281 895           2 J2SLm           255 m       1  -EL 866
( Japan + South East Asia )
  Doc. Council S/l2/74( COMER 2 ).
2
  Statistics obtained by the Commission at the end of January 1974 from the
relevant Italian Ministries and relating to the first ten months of 1973 .
( instead of the first eight months ) include minor increases ( of Annex to
Doc. s/172/74 (COMER 17 ).                        *                           ...
 ---pagebreak---                                           -5-
     As regards Bupply sources in Asia other than Japan ( allowing for Japan 's
     intention of limiting its exports to Italy arid not forgetting the development
     of the other countries ) it should be stated that Taiwan had undeniably-
     increased its exports to Italy very rapidly ; moreover , the prices for the
     exported goods were extremely low,
     6 . During the consultation which took place at the request of the Commission
     on 21 January 1974 within the Committee provided for in Article 5 of Regulation
     No 1025/70 to study, in particular, the problem created by imports from
     Taiwan , the Italian Delegation stated that the figure of 330 000 machines
     foreseen by the Japanese authorities was considerably in excess of the
     level of imports which could be permitted by the Italian Government from
     that country ;  moreover , imports of tape recorders from other countries of
     South East Asia added to the abovementioned would constitute a genuine threat
... of substantial damage to the industry concerned in Italy.       The Italian
     representative also emphasized the fact that the machines are imported at
     particularly low prices ( average import price : 3 910 lire from Taiwan ,
     7 420 lire from South Korea, 8 730 lire from Hong Kong, 16,500 lire from
     Singapore , 11 000 lire from Japan ). For these reasons Italy believes that
     a measure er,?a omnes is essential .   Any other type of measure would not
     ensure the protection necessary for the Italian industry.
     The Commission considers it advisable to recall that the information supplied
     by the Italian Government was not sufficiently oomplete or consistent to
     enable it to reach a conclusion concerning the market in tape recorders in
     Italy.    As regards imports , Italy has not provided any information within
     the framework of the supervisory procedures set up under the Community plan
     since April 1973.    The information provided .otherwise than within the
     abovementioned framework , is for the period before 31 August 1.973 although
     the product in question had been subject to quantitative restrictions in Italy
     on importation.    On the other hand , bearing in mind the supervisory
  .. procedure, information relating both to the import documents and to goods
     actually imported should have been available for the most . recent months .
     Moreover , the Italian authorities were only able to supply very approximate
     estimated for, production and consumption , in particular , in 1973* Nor did
 . information , considered by the Member States to be essential , for the
     investigation of such cases and which is asked for in the questionnaire
     relating to the investigation into damage adopted by the Council on
     4 December 1973 (Doc. l/l20/73 - COMER 36 ), reach the departments of the
      Commission .
 ---pagebreak--- 7 . Taking account of the invitation made by the Italian       Government and
in order to enable it to use additional more up-to-date information about
the situation and development of the market in tape recorders in Italy
the Commission obtained further evaluating material by collaborating with
the Italian authorities concerned (Ministeries of External Trade , Industry
and Finance ) and with the ANIE (the national association of electronic
industries ) ( cf. Annex to document S/l72/74 ( COMER 27 )).
The new material enabled an estimate to be made (over ten months in 1973 ) of
about 400 000 machines imported into Italy in 1973 from the countries of
Far East and South East Asia »
The decrease in imports in 1973 oompared with the previous year , due to
the introduction of the limit on imports , facilitated an appreciable
recovery at the same time of the Italian industry concerned , as proved by
the production figures for 1973 ( source : ANIE): 380 000 machines compared
with 136 000 produced in 1972 when the import situation had resulted in
the acknowledgement of substantial damage to that industry.
  Imports 1973 (January - October )                            _    (units )
  Taiwan           .    43 737                          •    '
  South Korea           30 156
  Singapore            17 282'
  Hong Kong              7 461
  Total for South
 .East Asia             9o 6 36               ■' i
  Japan               195 665
  Total for South
  East Asia and                                    ,
  Japan               294 301
                      SSSftSSSSSS                                          ...
Imports from other Member States (FRG and Netherlands ): 192' 015 *
The estimate of approximately 400 000 machines from Asia takes into . account
goods imported during the last two months of 1973 following the distribution
by the Italian authorities in November of the first share (150 000 units ) of
the quota" of 225 000 units that the Community had introduced in April , the
distribution of the second share ( 75 000 ) of the quota was planned by the
Italian authorities for February 1974)*
 ---pagebreak--- A measure erga omnes based on Article^ XIX of the GATT would , in the .
conditions stated , no longer "be justifiable on the terms of the provisions
of the General Agreement ,
Indeed, the level of approximately 400 000 machines imported into Italy in
1973 , (bearing in mind the Community protection system ) which at the same
time facilitated the recovery of the Italian tape recorder industry, does
not constitute . a case of substantial damage giving grounds for further
recourse to the clause in Article XIX of the GATT.
8 , The Commission , however , is aware that in the present state of affaire ,
a slight increase over the 1973 imports would be likely to renew the risk
of serious damage to the industry concerned#
                                            y
The Commission has refused recourse to the safeguard measure erga omnes
(Article XIX) requested again by Italy for 1974 taking account not only of
the aforementioned reasons but also cf the following factors :
(a ) Quantities likely to be imported from Japan (principal supplier ) between
1 January and 31 December 1974 * allowing for the limit of 330 000 machines
that the country has promised to respect j                          •.  .
(b ) goods imported into Italy from Asian countries other than Japan , the
Commission believes that very strict control of imports from those countries
(other than Taiwan ), whioh might reach a figure of between 50 000 and 60 000
machines in 1974> should facilitate the monthly control of the flow of these
imports ( from Singapore , South Korea and Hong Kong ) in such a way that any
problems likely to arise could be dealt with immediately ; moreover the
application of Community procedures to these imports , enabling a study to
be made of whether the prices being charged justify recourse to the rules
on anti-dumping , is an addiiaonal control factor with regard to supplying
countries }
( c ) the application of restrictive measures to Taiwan .
 ---pagebreak--- 9 . Indeed , with regard to Taiwan , the development of the importation of
tape recorders into Italy constitutes a threat of serious damage both
as regards quantities ( 43 737 machines during the first ten months of
1973 ) and prices ( average price 3 970 lire each ). For that reason the
Commission has considered it necessary to subject to authorization the
importation into Italy of tape recorders from Taiwan by emergency procedure
(Article 10 of Regulation No 1025/70 ) by limiting imports for the period
from 1 January to 31 December 1974 "to 20 000 machines^.
In accordance with Article 10(6 ) of Regulation 1025/70 the Commission shall ,
within ten working days of entry into force of the emergency measure ,
referred to above , submit a proposal to the Council on appropriate measures
to be taken .
The proposal for a Regulation annexed hereto is submitted to the Counoil
under the above provisions *
 OJ No L 33, 6 February 1974.     Regulation (EEC ) No 300/74 of 5 February 1974.
 ---pagebreak---                                   -9-
In conclusion , the Commission believes that its solution which is based
on :
- the level of the limit set by Japans
- the quota system of distribution with regard to Taiwan ;
- the strict control of other Asian suppliers (with a study of the
possibilities of using anti-dumping procedure ), enables the level of
imports into Italy in 1974 "to be limited to approximately 400 000 machines
which is the same level as in 1973 and which is quite acceptable to the
Italian industry which has recovered its normal production ( 380 000
machines in 1973 ) and export pattern (100 000 approximately) in such
conditions .
The possibility of avoiding further recourse to an Article XIX measure
which is not justifiable this time , moreover , will avoid recourse to
compensatory measures against the Community by the GATT partners
principally involved.
Finally, the Commission believes that the renewal of a measure erga omnes
(which is not indispensable , besides ) would , in present circumstances ,
constitute an entirely gratuitous act against the atmosphere of
cooperation and improvement in relations between the Community and Japan ,
 ---pagebreak---                             Proposal for a
                 REGULATION (EEC ) OP THE COUNCIL
             subjecting to authorization the importation into
                 Italy of tape recorders from Taiwan
THE COUNCIL OP THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community;
Having regard to Council Regulation (EEC ) No 1025/70^" of 25 May 1970
establishing common rules for imports from third countries , and in
particular Article 11 thereof ;
                                                     /
Whereas , following the development in 1973 of imports of tape recorders
into Italy from Taiwan and to the prices at which these goods are imported ,
                                                   2
the Commission, in its Regulation (EEC ) No 300/74 of 5 February 1974
subjecting to authorization the importation into Italy of tape recorders
from Taiwan , took temporary protective measures limiting imports into
Italy of tape recorders from Taiwan ;
Whereas it is clear from, the statistics and other information supplied by
the Italian Government that imports of tape recorders from Taiwan into
Italy have increased considerably during the past year ;
Whereas such imports , which amounted to 500 machines in 1969 , 2 690 in
1970, 3 745 in 1971 and- 16 695 in 1972 , increased to 43 737 during the
first ten months of 1973 ;  whereas these goods are imported at relatively
low average prices (about 3 970 lire each);
10J No L 124, 8 June 1970
20J No L 33, 6 February 1974
 ---pagebreak---                                   -2-
Whereas during the same period the annual Italian production of these
products decreased from 380 000 machines in 1969 to approximately
136 000 in 1972 , "but recovered considerably during 1973 (to approximately
380 000 machines on account in particular of the effects resulting from
the process of reorganization in which the Italian tape recording industry
has "been engaged.
Whereas , on the other hand imports from other third countries do not ,
at this stage , constitute a threat of substantial damage to the tape
recording industry in Italy, allowing, on the one hand , for measures
envisaged by the principal supplying country for limiting its exports
to Italy during 1974 and , on the other hand , for a strict control through­
out the Community of other supplying countries ;
Whereas , tape recorders have been imported into Italy from Taiwan in such
greatly increased quantities and on terms such as to threaten to hinder
the process of reorganization of the Italian tape recording industry and
cause it substantial damage }   whereas it would be difficult to remedy
such damage unless immediate action were taken in respect of imports
from Taiwan ;
Whereas at the present time the imports in question are being particularly
detrimental to Italy but are not so far causing the same damage to other
regions of the Community;    whereas it is consequently justifiable to
limit the protective measures to imports into Italy ;
 ---pagebreak--- Whereas these measures must limit imports at a level which would
take account both of the production and consumption situation in
Italy and of the growth of imports from Taiwan and other third countries
in recent years }  whereas a level therefore be fixed at 10 000 machines
for 1974 }
Whereas these provisional protective measures should be capable of being
amended or repealed as required by the development of the situation in
the Community markets and particularly in Italy and might be extended
to other parts of the Community or to the entire Community if future
trends in the imports in question should threaten to cause substantial
damage to producers in areas other than Italy :
HAS ADOPTED THIS REGULATION :
                              Art ici à 1
1 « The importation from Taiwan into Italy of the products listed below
shall be subject to the production of an import authorization and shall
not exceed in respect of the period 1 January 1974 to 31 December 1974 »
the number of machines given belowi
CCT heading No
92.11 to III            Combined sound recorders            20 000 units
                        and reproducers
 ---pagebreak---                                 "-4-
2 « The import authorization referred to in paragraph 1 shall be issued
by the Italian Republic .
                              Article 2
This Regulation shall enter into force on the day following 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