CELEX: 51987PC0201
Language: en
Date: 1987-04-29
Title: Proposal for a COUNCIL REGULATION amending Regulation (EEC) No 1282/81 imposing a definitive anti-dumping duty on imports of vinyl acetate monomer originating in the United States of America (presented by the Commission)

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COM (87) 201
Vol. 1987/0114
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                COM(87 ) 201 final
                                                Brussels , 29 April 1987
                                    Proposai for a
                                  COUNCIL REGULATION
           amending Regulation ( EEC ) No 1282 / 81 imposing a definitive
              anti-dumping duty on imports of vinyl acetate monomer
                    originating in the United States of America
                           ( presented by the Commission )
 C0M(87 ) 201  final
 ---pagebreak---                                                                         . % o '--l
                             EXPLANATORY MEMORANDUM
1 . In November 1980 ( 1 ) the Commission imposed provisional anti-dumping
     duties on imports of vinyl acetate monomer ( VAM ) originating in
     the USA . Following further investigation , definitive duties were
     imposed in May 1981 ( 2 ).
     The three US Companies for which duties were imposed are Celanese
     Chemical Co , Philips Petroleum and Gantrade while a fourth one , USI ,
     accepted a price undertaking . These anti-dumping measures were to
     expire after five years .
2 . Following request by the European Council of Chemical Manufacturers'
     Federation ( CEFIC ) a review procedure was initiated before the expiry
     of the above measures . The subsequent investigation covered the
     first half of 1986 .
3 . With regard to dumping , the investigation led to the conclusion that
     there was still dumping . The dumping margins found varied from 17,41%
     to Philips Petroleum to 15,06 % for Celanese , to 5.97% for Gantrade Co .,
     and 5.88% for U.S.I.
4 . With regard to injury , it was established that the dumping practices
     in question still lead to injury to the Community industry .
     The margins of injury found varied from 19,14 % to 6,89% .
5 . The facts show that the injury being caused by dumped imports of VAM
     originating in the USA , has to be considered as serious . Consequently ,
     the definitive anti-dumping duties should cover either the dumping
     margin or the injury margin whichever is lower . The following anti-
     dumping duties should therefore apply :
               Celanese Chemical   Co .               15.06 %
               Gantrade Corp.                          5,97 %
               Philips Petroleum Chemicals            10,56 %
               USI                                     5,88 %
( 1 ) 0J No L 311 , 21.11.1980 , p. 3
( 2 ) 0J No L 129 , 15.5.1981 , p. 1
 ---pagebreak---                                         Proposai for a
                                     COUNCIL REGULATION
amending Regulation ( EEC ) No 1282 /81 imposing a definitive anti-dumping
duty on imports of vinyl acetate monomer originating in 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 2176 /84 of 23 July 1984 on
protection against dumped or subsidized imports from countries not members
of the European Economic Community ( 1 ), and in particular Article 12
thereof ,
Having regard to the proposai submitted by the Commission after
consultations within the Advisory Committee as provided for by the above
Régulation ,
Whereas :
A.     PROCEDURE
1.     In November 1980 the Commission accepted by Régulation (EEC) No 2999/802 a price undertaking
offered by US Industrial Chemical Company of the United States of America
in the course of the anti-dumping procedure initiated in June 1980
concerning vinyl acetate monomer originating in the United States of America.
In May 1981 the Council imposed by Regulation (EEC) No 1282/81^ a definitive anti-dumping
duty on imports of vinyl acetate monomer originating in the United States
of America exported by other producers .
( 1 ) 0J No L 201 ,   30.07.1984, p. 1 .
( 2 ) OJ No L 311 ,   21.11.1980, p. 13
 (3 ) OJ No L 129,    15.05.1981 , p. 1
 ---pagebreak---                                         - 2 -
In November and December 1985 , the Commission gave notice of the impending
expiry of the undertaking (4 ) and the duty ( 5 ) pursuant to Article 15 of
Council Regulation ( EEC ) No 2176 / 84 .
2.     Subsequent ly, thè Commission received a review request from thè
Consei l Européen des Fédérations de l' Industrie Chimique ( CEFIC )
representing thè totality of Community production of thè product concerned .
In July 1986 the Commission , having decided that there was sufficient
evidence to warrant a review , published ( 6 ) a notice of re-opening of the
anti-dumping proceeding concerning imports of vinyl acetate monomer falling
within subheading 29.14 A n c)1 of the Common Customs Tariff ,
corresponding to Nimexe code 29.14-32 , and originating in the United States
 of America and commenced an investigation .
3.     The Commission officially so advised the exporters and importers known
to be concerned , the representatives of the exporting countries and the
Community producers and gave the parties directly concerned the opportunity
to make known their views in writing and to request a hearing .
4.     Ail Community producers , a number of US exporters and certain
importers replied to the Commission' s questionnaire .   Certain Community
producers and ail the exporters and importers who replied to the
questionnaire hâve requested and hâve been granted hearings .
In addition , submissions were made and hearings were requested by and were
granted to processors of the product in question .
( 4 ) OJ No C 300 , 23.11.1985 , p. 4 .
( 5 ) OJ No C 358, 31.12.1985 , p. 6 .
( 6 ) OJ No C 164, 2.7.1986, p. 2 .
 ---pagebreak---                                         3
5.   The Commission sought and verified all information it deemed to be
necessary for the purposes of a determination and carried out
investigations at the premises of the following :
( a) EEC producers
     France                                       Rhône Poulenc      ( Paris )
     Fédéral Republic of Germany                  Hoechst A.G.     ( Frankfurt / Main)
                                                  Wacker-Chemie Gmbh ( München )
     Ita ly                                       Montedipe ( Milano )
     United Kingdom                               BP Chemicals Ltd ( London )
( b) American produ ce r s / exporter s
     Celanese Chemical Co ., Dallas , Texas
     Gantrade Corp. , Montvale , New Jersey
     Phillips  Petroleum Chemicals S. A. , Bart lesvi l le , Oklahoma
     U. S.  Industrial Chemicals Co ., Cincinatti , Ohio
( c) EEC importers
     Belgium                                      Celanese S.A.      ( Brussels)
                                                   Phillips Petroleum Chemicals
                                                  (Overi j se)
     Nether lands                                 U.S.I. Chemicals Europe B.V.
                                                  ( Breda )
     Portugal                                     Resiquimica ( Mem Martins)
     Spain                                        Hoechst Iberia S.A.
                                                  ( Barcelona )
6.   The investigation of dumping and prices on the EEC market covered the
period from 1 January     to 30 June 1986 .
 ---pagebreak---                                       - 4 -
B.    NORMAL VALUE
7.    Normal value was determined on the basis of the domestic prices of
those producers who exported to the Community and provided sufficient
evidence , since these were considered to be representative of the domestic
market concerned .
C.    EXPORT PRICE
8.    Since all exports were made to subsidiary companies in the Community ,
export prices were constructed on the basis of the prices at which the
imported product was first resold to an independent buyer , suitably
adjusted to take account of all costs incurred between importation and
resale , including customs duty and anti-dumping duty , and of a profit
margin of 5% .   This profit margin was considered appropriate in the light
of the profit margin of independent traders of the product concerned who
cooperated in the course of the investigation and provided sufficient
evidence .
9.    Two of the related importers concerned , Celanese S.A. , Brussels ,
Belgium , and U.S.I. Chemicals Europe B.V. , Breda , the Netherlands , have put
forward arguments against the 5% profit margin .    They submitted evidence
showing lower profit margins of certain traders .    In addition , they
provided statistics of certain national banks .
The Commission , however , was unable to verify the evidence put forward by
the two importers concerned relating to certain traders since these traders
refused to cooperate .   The statistics of certain national banks reflect an
average profit margin of independent importers for a range of industrial
chemical products for which the profit margins may differ widely .
Conséquent ly , the profit margin of 5% found is to be used for the purpose
of constructing the export price .
 ---pagebreak---                                         - 5 -
D.    COMPARISON
10 .  In comparing normal value with export prices the Commission took
account , where appropriate , of differences affecting price comparability .
These covered mainly the conditions and terms of sales ( direct sales
expenses , commissions, discounts , payment terms , etc .).   All comparisons
were made on an ex-works basis .      The exporters did not contest these
adj ustments .
E.    MARGINS
11 .  Normal value , on a monthly weighted average basis , was compared with
export prices during the corresponding months on a transaction by
transaction basis .      The above examination of the facts shows the continuous
existence of dumping in respect of imports of vinyl acetate monomer
originating in the United States of America , the margin of dumping being
equal to the amount by which the normal value as established exceeds the
price for export to the Community .
These margins vary according to the exporter concerned , the weighted
average margin for each of the exporters investigated being as follows :
      Celanese Chemical Company                   15.06%
      Gantrade Corporation                         5.97%
      Phillips-, Petroleum Chemicals S. A.        17.41%
      US Industrial Chemicals Co .                 5.88%
12 .  For those exporters who neither replied to the Commission 's
questionnaire nor made themselves known otherwise in the course of the
investigation , dumping was determined on the basis of the facts available .
In this connection it is considered that the results of its investigation
provide the most appropriate basis for determination of the margin of
dumping and that it would constitute a bonus for non-cooperation and would
create an opportunity for circumvention of the duty to hold that the
dumping margin for these exporters was any lower than the highest dumping
margin of 17.41% determined with regard to an exporter who had cooperated
in the investigation .      For these reasons it is considered appropriate to
use this latter dumping margin for this group of exporters .
 ---pagebreak--- F.    INJURY
13 .  With regard to the injury caused by the dumped imports the evidence
available shows that imports into the Community from the United States of
America of vinyl acetate monomer increased from 32 996 tonnes in 1983 to
39 926 tonnes in 1985 and to 33 021 tonnes during the first half of 1986
with a consequent increase in market share held by the exporters concerned
from 11.7% to 12.6% and to 21.5% in the same periods .
14 .  The resale prices of these imports undercut the prices of the
Community producers during the investigation period ; the extent of
undercutting varies from 0.7% to 11.3% of Community prices .
The resale prices of these imports were lower than those required to cover
the costs of Community producers and provide a reasonable profit , the
differences being ( per exporter investigated ):
      Celanese Chemical Company                19.14%
      Gantrade Corporation                       6.89%
      Phillips Petroleum Chemicals S.A.        10.56%
      US Industrial Chemicals Co .               7.35%
15 .  The consequent impact on the Community industry has been a reduction
of the sales other than sales for captive use from 243 133 tonnes in 1983
to 117 160 tonnes during the first half of 1986 with a consequent decrease
in market share from 86.4% to 76.1% in the same period .
Sales prices have decreased substantially in the Community market and at a
higher rate than the costs of production of vinyl acetate monomer , thus
reducing the profits of the Community industry .
 ---pagebreak---                                        - 7 -
16 .  The Commission has considered whether injury has been caused by other
factors .   It was found , though , that imports of the product in question
originating in other countries have decreased from 15 517 tonnes in 1983 to
3 733 tonnes during the first half of 1986 .     Free market consumption in the
Community has increased by approximately 10% between 1983 and the first
half of 1986 ; this increased consumption has been entirely taken by the US
exporters .
In view of the substantial increase in dumped imports and the prices at
which they are offered for sale in the Community , the effects of the dumped
imports of vinyl acetate monomer originating in the United States of
America , taken in isolation , have to be considered as constituting material
injury to the Community industry concerned .
17 .  Certain exporters argued that the impact of their individual exports
should be looked at in isolation and considered not to have caused material
injury in view of the low level of their market share in the Community .
The Commission considered the comparability of the imported product in
terms of physical characteristics , the increase in volume of imports from a
previous comparable period and the low level of prices attributable to the
products of all supplying companies and the extent to which each of the
imported products competed in the Community with the like product of the
Community industry .   The Commission concluded that no persuasive arguments
have been submitted showing that the dumped imports from the companies
concerned could not be considered as contributing to the material injury
suffered .   Should any company be treated in isolation , the rest would be
discriminated against .    Accordingly , the Commission concluded that for the
purposes of establishing the level of injury sustained by the Community
industry , regard should be paid to the effect of the dumped imports
cumulated from all exporting companies concerned .
The Council confirms the Commission 1 s conclusion .
 ---pagebreak---                                      - 8 -
18 . One American exporter , US Industrial Chemical Co ., argued that sales
in Spain should not be taken into account in the calculation of the dumping
margin .   The company alleged that although sales were made at prices below
price levels in the Community of Ten , these prices were consistent with
market patterns in Spain , and the four sales made in the Spanish market
during the reference period did not injure the Community industry because
(a)  the Spanish market was isolated from the Community for many years by
      strict government Controls , import licences and duties ;
( b) EC producers did not suffer injury merely because an isolated market
     became politically part of the Community ;
(c)  EC producers are working at full capacity , exports of the Community of
     Ten to Spain of vinyl acetate monomer have increased substantially in
     absolute and relative terms while US exports to Spain have increased
     by a smaller percentage , and the French producer has about 50% of the
     Spanish market .
19 . The Commission examined these arguments and it was found on the basis
of the facts avai labié that
( a) the four export sales to Spain made by US Industrial Chemicals Co .
     represented about one fourth of their exports to the Community and 12%
     of total US exports to Spain ;
( b) American exporters provide more than 50% of the total imports into the
     Spanish market and almost doubled their exports in the first half of
     1986, i.e. during the investigation period .   During 1985 8 870 tonnes
     were exported compared to 8 040 tonnes exported during the first half
     of 1986 .   This increase was maintained in the second half of 1986
      ( 12 807 tonnes imported from January 1986 to September 1986 into Spain
     from the United States) following the cessation of production by the
      Spanish producer in May 1986 ;
 ---pagebreak---                                      - 9 -
Finally , the argument that sales into Spain should not be taken into
account , on the ground that in the past , before      * accession , Spain
favoured low prices , does not take into account that as of 1 January 1986
the Community includes a new market and this market must be treated in the
same way as the rest of the Community .
20 .  Furthermore , the Commission examined in the light of the criteria laid
down in Article 4(3 ) of Regulation ( EEC ) No 2176 / 84 whether further injury
would be threatened if the duty on these imports was to be removed .       In
this connection account was taken of the fact that imports of vinyl acetate
monomer originating in the United States have increased substantially even
though they were subject to anti-dumping measures .      In addition , it was
found that the US industry had sufficient capacity to increase its exports
and that there was a likelihood that the exports would be directed to the
Community since US exports to other traditional markets may be expected to
decline as a result of new capacity which has been established in Brazil
and Taiwan .  Moreover , the trend towards increased exports is likely to be
reinforced by the substantial fall which has occurred in the value of the
US dollar .
In view of these facts , the Commission considers that the expiry of the
existing measures would lead to even more severe injury for the Community
industry than has already occurred and that anti-dumping duties should
therefore continue to apply .
The Counci l confirms the Commission' s conclusion .
G.    COMMUNITY INTEREST
21 .  Community processing industries have argued that the maintenance of
protective measures would not be in the Community interest because it would
make them less competitive with regard to imported derivatives of vinyl
acetate monomer .
In view of the relatively low incidence of a price increase on the costs of
the processing industry the Council has, however , come to the conclusion
that it is in the Community 's interest that action be taken .
 ---pagebreak--- 22 .  In these ci rcumstances , definitive anti-dumping duty on imports of
vinyl acetate monomer originating in the United States of America should be
maintained and fixed at a rate corresponding to the results of this
investigation .
H.   AMENDMENT OF THE DUTY
23 .  In the light of the above determination the existing anti-dumping
duties should be modified , account being taken of the dumping margins found
in the investigation period .    Since , however , the difference between the
resale prices of the US imports and the price required to cover the costs
of Community producers and provide a reasonable profit in one case is lower
than the dumping margin found , the duty should be limited to that lesser
amount , the modified duties being as follows :
      Celanese Chemical Company                    15.0%
     Gantrade Corporation                           6.0%
      Phillips Petroleum Chemicals S.A.           10.5%
     US Industrial     Chemicals Co .               5.9%
     Others                                       15.0%
HAS ADOPTED THIS REGULATION :
                                      Article 1
Article 1(2 ) and ( 3 ) of Régulation ( EEC ) No 1282 / 81 are hereby replaced
by the following :
     "2 .   The rate of the anti-dumping duty shall be 15%
 ---pagebreak---                                       11
      3.  Notwithstanding paragraph 2 , the rate of the anti-dumping
     duty shall be :
     6% for Gantrade Corporation
     10.5% for Phillips Petroleum Chemicals S. A. , and
     5.9% for US Industrial Chemicals Co . "
                                  Article 2
This Régulation shall enter into force on the day following that of its publi­
cation in the Official Journal of the European Communities .
This Régulation shall be binding in its entirety and directly applicable in
ail Member States .
Done at Brussels ,
                                               For the Council ,