CELEX: 51994PC0178
Language: en
Date: 1994-05-05
Title: 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

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                               COMMISSION OF THE EUROPEAN COMMUNITIES
                                                                        C0MC94) 178 final
                                                                        Brussels, 05.05.1994
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                                                           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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 ---pagebreak---                                - 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    and have the measures in force repealed.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    is likely to occur in the event of the measures being repealed has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
 ---pagebreak---                                — 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
                                       1
members of the European Community( ) 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
 ---pagebreak---                                        - 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
 ---pagebreak---                                      - 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
 ---pagebreak---                                  - 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.
 ---pagebreak---                                     - 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".
 ---pagebreak---                                       - 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%.
 ---pagebreak---                                    - 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.
 ---pagebreak---                                   - 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.
 ---pagebreak---                                      - 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.
 ---pagebreak---                                        - 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.
 ---pagebreak---                                   - 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.
 ---pagebreak---                                     - 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.
 ---pagebreak---                                    - 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.
 ---pagebreak---                                     - 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:
 ---pagebreak---                                  - 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
 ---pagebreak---                                                 4(o
                                                                     ISSN 0254-1475
                                                              COM (94) 178 final
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