CELEX: 51992PC0304
Language: en
Date: 1992-07-17
Title: Proposal for a COUNCIL REGULATION (EEC) modifying the anti-dumping duties following the review of the anti-dumping measures applicable to imports of synthetic polyester fibres originating in Taiwan, Romania, Turkey and the Yugoslav Republics of Serbia, Montenegro and Macedonia and closing the said review in respect of imports of synthetic polyester fibres originating in Mexico and the United States of America

C0MV1ISSION OF THE EUROPEAN CGMKUNITIES
                                                  C0M(92) 304 final
                                                  Brussels, 17 July 1992
                              Proposal for a
                         COUNCIL REGULATION (EEC)
  modifying the anti-dumping duties following the review of the anti-
  dumping measures applicable to imports of synthetic polyester fibres
  originating in Taiwan, Romania, Turkey and the Yugoslav Republics of
     Serbia, Montenegro and Macedonia and closing the said review in
     respect of imports of synthetic polyester fibres originating in
                 Mexico and the United States of America
                      (presented by the Commission)
 ---pagebreak---                                         - 2 -
                               EXPLANATORY MEMORANDUM
 1.      In   a    notice     published     in     Official   Journal No C 230     of
 15 September 1990 the Commission announced a review of the anti-dumping
measures    imposed on imports into the Community of synthetic polyester
 fibres originating     in Taiwan, Turkey, the United States of America,
Mexico,    Romania    and   Yugoslavia     in   accordance    with   Artlcle 14    of
Regulation (EEC) No 2423/88.
 2.     The    Commission    carried   out    its   investigation    in   the  period
between 1 January and 31 August 1990.
3.      The normal value in respect of the dumping was established:
        for the three Taiwanese producers, on the basis of constructed
        value,    namely  by    adding   together    the   production    cost  and  a
        reasonable profit margin: this gave dumping margîns of between
        5.9% and 13%;
        for    the Turkish    producer   and    the producer    from   the Yugoslav
        Republics of Serbia, Montenegro and Macedonia on the basis of
        domestic prices, the dumping margin ranging between                11.4% and
        15.6%;
-       for    Romania,   a    state-trading     country,    on  the    basis   of  a
        Taiwanese    constructed     value, which     gave   a dumping     margin of
        14.1%.
4.      There was no need to examine whether dumping was practised by
the US and Mexico since these two countries' exports did not contribute
to the injury.
5.      On   the question of       injury,   invest igat ions were    also made    to
determine whether any changes had occurred, for better or for worse, in
the circumstances as a result of the behaviour of the exporters on the
Community     market   or    the    situation     of   the   Community      industry,
independently of the anti-dumping measures which are the subject of the
review procedure.
 ---pagebreak---                                          - 3 -
6.       It emerged     from  the   investigation     that  a situation     involving
 injury to the Community industry - faliing sales and financial iosses -
meant    that   protection     was   stiII    required    against   dumped     imports
originating     in Taiwan, Romania, Turkey and the Yugoslav Republics of
Serbia, Montenegro and Macedonia.            The measures under     review had not
prevented     continued    undercutting     of    Community   producers    by    these
exporters,     and  exports    remained    at   an  appreciable    level.   In these
clrcumstances,      the   lifting   of    the   anti-dumping    measures    in   force
against these countries, as advocated by the Association of Community
 Importers, would not be Justified.          On the contrary, the measures need
adjustment     in  the   light   of   the   information    on  dumping   and    injury
emerging    from   the   investigation.      Imports originating     in the United
States and Mexico, however, can no longer be considered as a cause of
injury, now or in the future.
7.      As   is usual practice, the Commission has carefully considered
the implications of anti-dumping measures for consumers' interests and
there   is no evidence that       they would be signif icant ly affected by a
continuation of such measures.
8.      This    being    the  case,    the    anti-dumping    measures    should    be
maintained    and   adjusted    in the    light of    the  results of    the    review
referred to in paragraphs 3 and 4, namely:
        Taiwan: anti-dumping duties ranging between 5.9% and 13%
        Turkey: an anti-dumping duty of 11.4%
        The Yugoslav Republics of Serbia, Montenegro and Macedonia: an
        anti-dumping duty of 15.6%
        Romania: an anti-dumping duty of 14.1%
        US and Mexico: no measures.
 ---pagebreak---                                        - 4 -
                                 Proposal for a
                            COUNCIL REGULATION (EEC)
   modifying the anti-dumping duties foliowing the review of the anti-
  dumping measures applicable to imports of synthetic polyester fibres
  originating in Taiwan, Romania, Turkey and the Yugoslav Republics of
     Serbia, Montenegro and Macedonia and closing the said review in
     respect of imports of synthetic polyester fibres originating in
                   Mexico and 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 2423/88 of 11 July 1988 on
protection    against   dumped  or   subsidized  imports    from  countries not
                                          1
members of    the European Community( ), and        in particular   Article    14
thereof,
Having    informed    the   EEC-Turkey    Association    Council   pursuant    to
Article 47(2) of the Additional Protocol to the Agreement establishing
an Association between the European Economic Community and Turkey (2 ^,
Having   regard   to  the proposal    from  the Commission,     presented   after
consultations within      the Advisory    Committee   as provided    for  by  the
Regulat ion,
Whereas:
(1)   OJ No L 209, 2.8.1988, p. 1.
(2)  OJ No L 293, 29.12.1972, p. 3.
 ---pagebreak---                                         - 5 -
                                    A. PROCEDURE
 1.       Council    Regulation   (EEC)  No 3946/88 ( 3 )   imposed    a  definitive
 anti-dumping duty on imports of synthetic polyester fibres originating
 in Taiwan, Turkey, the United States of America, Mexico, Romania and
YugosIav i a.
2.        In March    1990 the Commission     received a request       for a review
 from   the   Association    of   Importers   of  Synthetic     Polyester     Fibres;
requests for a review had also come from exporters of this product in
Mexico, Romania and the United States of America.
3.       Having decided, after consultations, that there was sufficient
evidence to Justify a review, the Commission              decided   to   institute a
fuli     review     of   Regulation (EEC) No 3946/88        in    accordance     with
Article 14        of     Regulation (EEC) No 2423/88,          and      opened     an
                  4
 invest igat ion< ).
4.       The    Commission    officially    notified   the    exporters     and   the
Community     importers and producers known to be concerned and gave them
the opportunity to make known their views in writing and to request a
hear ing.
There   were    found   to be no producers/exporters         in the Republics of
Slovenia,      Croatia    and    Bosnia-Herzegovina.      Anti-dumping      measures
should    therefore be restricted      to the Yugoslav Republics of Serbia,
Montenegro and Macedonia.
5.       Exporters, importers and the International Rayon and Synthetic
Fibres Committee (IRSFC) made known their views              in writing.     Some of
them requested and were granted hearings.
6.       The    Commission     sought   and    verified     all    information     it
considered     necessary   for  a preliminary determination of          dumping   and
Injury.     It inspected the premises of the following companies:
(3)   OJ No L 348, 17.12.1988, p. 49.
(4)   OJ No C 230, 15.9.1990, p. 3.
 ---pagebreak---                                - 6 -
    Community producers
    Du Pont de Nemours GmbH, Germany
    Enka AG, Germany
    Hoechst AG, Germany
    Enichem Fibres SpA, Italy
    Montefibre SpA, Italy
    Nurel SA, Spain
    La Seda de Barcelona SA, Spain
    Rhône Poulenc SA, Spain
    Br ilen SA, Spain
    Finicisa Fibras Sinteticas SA, Portugal
    Akzo NV, Netherlands
    Rhône Poulenc Fibres SA, France
    Wellman International Ltd., Ireland
    Community importers
    Hugo Bartram KG, Germany
-   Jochen von Grundherr, Germany
    Non-Communlty producers
(a) Taiwan
    Chung Shing Textile Co. Ltd, Taipei
    Far Eastern Textile Ltd, Taipei
    Nan Ya Plastics Corp., Taipei
    Shinkong Synthetic Fibres Corp., Taipei
    Tainan Spinning Co. Ltd, Tainan
    Tuntex Distinct Corp., Tainan
 ---pagebreak---                                 - 7-
 (b) Turkey
      SASA, Artificial and Synthetic Flbres Inc, Adana, exporting
      through an affiliated company, EXSA, Adana
     Sônmetz Filament, Bursa
(c)  Yugoslav Republlcs of Serbla, Montenegro and Macedonia
     Hemteks, Skopje
(d)  Mexico
     Celanese Mexicana SA, Mexico
     Crisal Textil SA, Mexico
     Fibras Slnteticas SA, Monterrey
     Kimex SA, Mexico
     Nylon de Mexico, Mexico
(e)  United States of America
     Eastman Chemical Products Inc, Kingsport TE
     E.l. Du Pont De Nemours and Co., Wilmington DE
     Hoechst Celanese Fibers Inc, Charlotte NC
     Wellman Inc, Johnsonville
     Mart in-Color-Fi Inc, Edgefieid
     Gates Formed-Fibre Product Inc, Auburn
-    Foss Manufactur ing Company Inc, Hampton
     Bollag International Corp., Newell, NC
     Carter, Moore & Co. Inc, New York
 ---pagebreak---                                        - 8-
7.      The  Commission    received,     and  made use   of,  information   from
 importers,   producers     in    the   exporting   countries   and    Community
producers.
8.      Producers/exporters      were    notified  of   the   main   facts   and
considerations on the basis of which it was proposed to recommend the
 imposition of definitive measures.        They were also given time in which
to present their comments following receipt of this information. Their
comments were studied and, where appropriate, taken into account by the
Commission in drawing up its conclusions.
9.      The  investigation     into dumping practices concerned      the period
1 January to 31 August 1990.
       B.   REVIEW UNDER ARTICLE 14 OF REGULATION (EEC) No 2423/88
10.     As regards   injury, a fali      in imports and/or an    improvement  in
the economic and financial situation of the Community industry is taken
into consideration only if it results from factors other than the anti-
dumping measures in force.
                                    C. PRODUCT
1.      Product descriptlon
11.     The product   is the same as that described        in Regulation (EEC)
No 3946/88.
12.     The   product   under      investigation   is   synthetic    fibres   of
polyesters, not    carded,   combed or otherwise processed        for spinning,
covered by CN code 5503 20 00, and hereinafter referred to as synthetic
polyester fibres.
 ---pagebreak---                                         - 9 -
This   product   is a    raw material     used    in various     stages     of   textile
production, depending on the nature of the textiles to be produced.
Some 60% of the synthetic polyester fibres consumed                in the Community
are used for spinning yarn to make fabric, mixed, where necessary, with
other fibres such as wool or cotton.           The rest    is used as wadding for
certaln textile products (cushions, car seats, anoraks, and the like),
 including other non-spun applications such as carpet manufacture.
 13.     Although   the potential use and quality of synthetic polyester
fibres    can  vary,   there   is no    significant     difference      in   the    basic
physical    characteristics,     consumer    perception     or   marketing       of   the
various types of synthetic polyester fibres under consideration.                     They
may   therefore   be grouped     as one    product    for   the   purposes of        this
proceeding.
 Importers   asked   whether   a  distinction      should   not   be   drawn     between
synthetic polyester fibres used for wadding and other fibres because of
the   different    application.    Such   a  distinction      was   not    acceptable,
however, because it was only possible following industrial processing.
Before processing, all       types of synthetic polyester          fibres generally
have the same physical characteristics.
Some exporters and importers also asked for synthetic polyester fibres
with specific characteristics, such as fire-resistant or bicomponent
fibres, to be considered        a different      product   and excluded        from the
scope of this proceeding, since such            fibres were much higher priced
than   the   others.   The   investigation     showed,    however,    that     although
there were several types of synthetic polyester fibres with different
characteristics corresponding to specific purposes, the basic physical
characteristics, application and use were the same as other synthetic
polyester fibres.      Furthermore, the market for the product              is made up
of   different   classes    of   synthetic    polyester     fibres    which     overlap
without there being a ciear distinction between them.              These additional
characteristics of so-called "special          fibres" do not, therefore, make
them different, and they should fall within the scope of this review.
 ---pagebreak---                                          - 10 -
    2.      Like products
    14.     The Commission found that synthetic polyester fibres produced in
    the Community and those sold on the domestic markets of Taiwan; the
   Yugoslav    Republics    of   Serbia,    Montenegro    and   Macedonia;  Turkey,
    Romania, the United States of America and Mexico were like products as
    regards physical    and   technical   characteristics to those exported by
    those countries to the Community.
                                       D. DUMPING
    1.      Normal vaiue
    (a)     Taiwan
   15.      The Commission was able to establish that the three Taiwanese
   firms exporting to the Community had sold representative quantities of
   the   product,   equivalent,    that   is, to    over   5%  of  exports  to  the
   Community,    on  the  domestic    market.   Since,    however,   the volume  of
   profitable sales was negligible, the normal value had to be constructed
   on the basis of the cost of production and a reasonable profit margin.
   The cost of product ion was computed on the basis of all costs, both
   fixed and variable, of materials and manufacture, plus a reasonable
   amount   for selling and general      and administrative expenses.      Given a
   representative volume of domestic sales, the amount was calculated by
   reference to the expenses incurred by Taiwanese producers on sales of
   like products on the domestic market.          As to the profit margin, the
   information available to the Commission         indicated that there had been
   no representative profitable sales on the domestic market in the period
   under   investigation.    The Commission therefore established the profit
   margin on another     reasonable basis, namely        the profits made by    the
   firms concerned over previous three years on all sales in the sector of
   each firm; this margin varied between 6% and 11%.
3)
 ---pagebreak---                                            - 11 -
 (b)     The Yuaoslav Republlcs of Serbia. Montenegro and Macedonla
 16.     Since there had been sales of a representative quantity on the
 domestic market (over 5% of exports to the Community), the normal value
was calculated on the basis of prices actually paid or to be paid in
 the  ordinary      course     of    trade   for  the   like   product    intended   for
consumption on the domestic market, net of all discounts and rebates.
 (c)    Turkey
17.     Since there had been sales of a representative quantity on the
domestic market (over 5% of exports to the Community), the normal value
was calculated on the basis of prices actually paid or to be paid in
the   ordinary      course    of    trade   for   the   like   product    intended  for
consumption on the domestic market, net of all discounts and rebates.
(d)     Roman i a
18.      In view of the fact that Romania cannot be classed as a market
economy,    the Commission         had  to base    its calcuiations on      the normal
value of     the product       in question      in a market    economy   country.   The
 importers and the producer objected to Turkey, chosen                 in the previous
 investigation, but accepted Taiwan as a similar country. The Commission
found   that     there    were    no   significant    differences    between   the  two
countries     in the production process, scale of production or                 type of
product,    nor     in   the    conditions     of  access   to   the   main   cost.   It
accordingly     decided     that    it was appropriate and not unreasonable           to
determine the Romanian normal value.
19.     As indicated        in point 14 of the recitals, the normal value for
Taiwan   had    to be constructed.          In this    respect   an   importer   of the
Romanian product requested that the normal               value thus established be
adjusted on the grounds that Romania had a comparative                    advantage   in
terms of oil supplies, a raw material for the manufacture of polyester
fibres.    This request was not found to be Justified.              The investigation
established      that   Taiwanese      firms   were  able   to obtain     low-cost  raw
materials     on    the    domestic     market.   Any   advantage    enjoyed    by  the
Romanian producer was therefore not significant.
 ---pagebreak---                                         - 12 -
 ln constructing the normal value for Romania, the Commission based its
calculations on the situation of the most efficient Taiwanese producer
manufacturing the same type of product for the domestic market and for
export.     The Council believes that any comparative advantage has been
taken fully into account, especially since the importer in question did
not provide any precise figures in support of his request.
 (e)     United States of America and Mexico
20.      Given that the two countries' exports had not contributed to the
 injury (see recitals 30 and 31), the Commission thought             it unnecessary
to find out whether dumping had taken place.
2.      Exoort orices
21.     Export    prices   were   established     on  the   basis   of  the    prices
actually paid or payable for products sold for export to the Community.
Where products were exported through subsidiaries or associates in the
Community, as in the case of the Turkish producer, export prices were
calculated by the Commission on the basis of the price at which they
were   resold   to  the   first   independent    buyer,   duly   adjusted    to  take
account of all costs incurred between import and resale, plus a margin
deemed    reasonable   to   cover   general   expenses    and   profit,   given   the
profit margins of independent importers of the product             in question.
3.      Cpmparispn
22.      In   comparing    the    normal    value    with    the   export    prices,
transaction     by   transaction,      the   Commission,     in   accordance     with
Article 2(9) and     (10) of    Regulation     (EEC) No 2423/88, took       account,
where    warranted,     of    the    differences     directly     affecting     price
comparabiIIty, such as selling costs - i.e. terms of credit, transport,
insurance and handling costs, technical assistance, salaries of sales
staff, and ancillary costs - where the claim was Justified and the Iink
direct.    All  comparisons were made at the ex-works stage and at the
same level of trade.
 ---pagebreak---                                     - 13 -
23.     Regarding the export prices charged by producers from Turkey and
 the Yugoslav    Republics   of   Serbia, Montenegro  and    Macedonia, the
Commission    took   account,   in  accordance  with  Article 2(10)(b) of
Regulation (EEC) No 2423/88, of the differences resulting from the
 import charges on raw materials, which varied according to whether the
raw materials were used for production sold on the domestic market or
for export to the Community.     Adjustments were thus made in cases where
refunds of duty were found to have been accorded, where such refunds
concerned   materials    incorporated   in  the product   exported   to the
Community.
4.      Dumping marains
24.     The comparisons referred to above showed that dumping was taking
place.   The    dumping    margin    calculated  for    each    country  or
producer/exporter is equal to the difference between the normal value
and the price on export to the Community, duly adjusted.
The weighted average dumping margins for each of the countries or
producers/exporters concerned, adjusted to free-at-Community-frontier
prices, are as follows:
Taiwan:
        Nan Ya Plastics Corp., Taipei                          5.9%
        Far Eastern Textile Ltd, Taipei                        6.8%
        Shinkong Synthetic Fibres Corp., Taipei               13.0%
RomanIa:                                                      14.1%
The Yugoslav Republics of Serbia, Montenegro and Macedonia:
Hemteks, Skopje                                               15.6%
Turkey:
SASA Art if icial Synthetic Fibres Inc, Adana                 11.4%
 ---pagebreak---                                         - 14 -
25.      In  the    case    of   firms   which   failed    to   cooperate      in  the
 investigation    or   did   not   reply  satisfactorily     to   the    Commission's
questionnaire,     the    dumping   margin   was   determined    on    the  basis   of
avallable information, in accordance with Article 7(7)(b) of Regulation
(EEC)   No 2423/88.      The    Commission   considered     the    results    of   its
 InvestIgation   to be     the most    appropriate   basis    for   determining   the
dumping margin and that the fixing of a margin lower than the highest
margin    determined      for    an   exporter    which    cooperated      with   the
 investigation would reward failure to cooperate and make it possible to
evade duty.     It accordingly applied the highest appropriate margin to
such firms.    The Council supports this approach.
                                      E. INJURY
26.     In accordance with Article 14(1) of Regulation (EEC) No 2423/88,
the Investigation sought to determine whether any changes had occurred,
for  better   or   for   worse,    in the circumstances as        a result    of  the
behavlour of the exporters on the Community market or the situation of
the  Community     industry,     independently   of   the  anti-dumping      measures
which are the subject of this revlew procedure.
27.     The Commission's findings are as follows:
1.      Exporters' behaviour on the Community market
(a)     Cumulation
28.     To  measure     the    impact  of   dumped    imports   on    the   Community
industry, it must first be ascertained whether the approach adopted in
determining the measures under review, namely cumulation of all imports
originating   in the countries covered by the           investigation, should be
continued.
 ---pagebreak---                                          - 15 -
 29.     Imports from Mexico stood at nearly 0.1% in 1990. Although the
mere fact that Mexican        imports are insignificant after the              imposition
of   anti-dumping     measures does not       of   itself mean     that    the measures
should be dropped or these          imports not cumulated wlth other             imports,
 the  investigation found that the structure of the Mexican market, as
analysed over a number of years, made it highly unlikely that exports
to   the   Community     would   ever    reach    significant     levels     in   future.
Mexican production is mainly destined for the US market.                   Confirmation
of   this    comes    from   the   fact    that    although    Mexico    had     sizeable
production capacity between 1984 and 1990, its share of the Community
market    remained negligible, hovering          around    the 0.2% to 0.5%        level,
apart from a temporary spurt of 1% in 1987.
The Commission thus believes that            imports from Mexico would not rise
significantly     if anti-dumping duties were abolished and that there is
 llttle   likelihood of     further    injury.    This being so, the          Commission
finds that     Imports from Mexico should not be cumulated with those of
the other countries concerned.
30.      Imports    from   the   United    States    of  America    have     fallen   and
accounted     for    no   more    than   0.8%    of    the   market     in    1990.   The
investigation       estabiished      that    this     trend    is    the     result    of
circumstances other than the imposition of anti-dumping duties.                    First,
the leading US producers responsible for most exports to the Community
are not subject to such duties, and the duties                imposed on others are
relatively     low.   Furthermore, US production           is focused    on    high-cost
products for the domestic market.             In these circumstances the export
volume of the products in question is unlikely to have been affected by
the anti-dumping duties.         These exports are unlikely to contribute to
injury    in future.     There are thus no grounds for cumulating                 imports
from the United States of America with those of the other                      countries
concerned.
31.      Imports     from    the    other     four     countries     concerned       were
substantial, Taiwan and Turkey in particular (respectively 4.2% and 2%
market shares in 1990).
 ---pagebreak---                                       - 16 -
 32.     Although   the volume of    imports from Romania and      the Yugoslav
 Republics of Serbia, Montenegro and Macedonia was significantly reduced
 after the imposition of anti-dumping measures - to a low level in the
 case of the latter and to a negligible level in the case of Romania -
 the only explanation for this drop was the anti-dumping measures.
Romanian and Yugoslav exports have always been oriented             towards the
Community    and they have held significant and constant         market   shares
over   the   last six years.   For those reasons, they stI11        represent a
 threat.   The effects of    these   imports should  thus be cumulated with
those of Taiwan and Turkey as they were at the time when the measures
under review were imposed.
33.      The Council supports this approach.
(b)     Community consump11on
34.     The Community market remains relatively stable in size.          It rose
from   431 535 tonnes   in  1988   to  441 033 tonnes   in   1989,   falling  to
424 194 tonnes in 1990 (277 507 tonnes during the reference period).
(c)     Volume of imports
35.     Following the introduction of anti-dumping measures in December
1988, the volume of imports of synthetic polyester fibres from the four
countries in question fell from 44 000 tonnes in 1988 to 31 400 tonnes
in 1990; in the case of Taiwan, imports rose from 12 000 tonnes in 1988
to 18 000 tonnes in 1990.     The share of Community   imports held by these
countries shrank from 10.2% In 1988 to 7.4% in 1990.
(d)      Import prices
36.     During   the reference period     the prices of    these   imports were
lower than the prices of the relevant Community product, the scale of
undercutting ranging from 19% to 25% on average.           It should be noted
that  this undercutting    has been taking place even with         anti-dumping
measures in force.
 ---pagebreak---                                          - 17 -
2.       Situation of the Communlty industry
 (a)     Production caoaclty. utlllzation rate. stocks
37.      Community    production of      synthetic    polyester  fibres    fluctuated
from    379 286 tonnes        in    1988     to    428 147 tonnes    in    1989    and
407 251 tonnes       in     1990.   Since      production    capacity     rose    from
432 903 tonnes in 1988 to 466 339 tonnes in 1989 and 471 723 tonnes in
1990, the utilization rate has remained fairly stable around 86%-88%.
Stocks    over   the    same   period     rose    by  94%   from  29 146 tonnes     to
56 533 tonnes.
(b)     The Community      industry's sales volume and market share
38.     The quantity of synthetic polyester fibres sold in the Community
by   the   Community      industry     rose    from   337 424 tonnes    in   1988   to
356 465 tonnes     in 1989 but       fell   back   to 330 310 tonnes    in 1990 and
stood   at   220 207 tonnes      during   the   reference   period.   The   Community
industry's market share developed as follows: 78.2% in 1988, 80.8% in
1989 and 79.4% in 1990.
(c)     Price trends
39.     A   detailed    analysis     was made     of   the selling  prices     in  the
Community    of  polyester     synthetic      fibres   produced  by   the   Community
industry and those of imports from the countries under investigation.
The investIgation showed that, following the imposition of anti-dumping
measures, prices in the Community rose from 1988 to 1989, and then fell
to 1988 levels in 1990.
 ---pagebreak---                                         - 18 -
 (d)    ProfIts
40.     The Commission found that, overall, the Community             industry had
recorded    poor     financial     resuits   since    1988.   Despite    a    slight
 Improvement    In   1989,   the    situation   in  the    reference   period    had
deter iorated.     In 1990 only a few Community         producers made a modest
profit, while many others suffered heavy losses.            A weighted average of
the Community     industry's resuits shows a loss of some 2.3% over the
reference period.
(e)     Employment and investment
41.     Between 1988 and 1990 the Community          industry shed 237 Jobs, 5%
of Its labour force, and investments were cut back and two factories
closed.
3.      Conclusions concerning a change In circumstances
42.     In Iight of the above, the Community industry's vulnerabiIity in
the   face  of   declining     sales   and   financial    losses  still    requires
protection    against    dumped    Imports   originating    in Taiwan,     Romania,
Turkey and the Yugoslav Republics of Serbia, Montenegro and Macedonia.
The imposition of the measures under review has not prevented continued
undercutting of Community         producers' prices by these exports, which
have remained at an appreciable ievel.           In these circumstances, there
are no grounds for        lifting the anti-dumping measures against            these
countries   as   requested    by   the   importers' association.      Indeed,    the
measures should be adjusted in the Iight of the evidence of dumping and
injury emerging from this investigation.            Imports originating      in the
United States of America and Mexico, in contrast, cannot be seen as a
source of    injury, now or      in the future, for the reasons set out in
recitals 29 and 30.
 ---pagebreak---                                        - 19 -
43.      Importers clalmed that a review which examined the possibility
of lifting existing measures could lead only to a downwards adjustment
of the existing dutles.
The  Council   cannot   accept    this argument.      First,   no   such  provision
exists in the relevant Community        legislation or in GATT's anti-dumping
code.   Such a rule would be contrary          to the whole      idea of a review
 Instrument, as provided for in Regulation (EEC) No 2423/88.             The aim of
Article 14 is to adjust measures to changing circumstances, whether in
connection with dumping or the resulting injury.            It is thus irrelevant
whether    the  request   for   a   review   comes    from   the    importers,  the
exporters or the Community producers.
This applies with even greater force in that the Commission may at any
moment   review the measures and adjust         them to changing circumstances
without any request from an interested party.
                               F. LEVEL OF DUTY
1.      Rale.
44.     In order    to determine     the amount of      duty   to be   levied, the
Commission took account of the dumping margins observed and the levei
of duty required to eliminate the injury.
45.     In calculating the injury threshold, the Commission had to take
account of the fact that the Community           industry as a whole      is making
losses.   The   proposed   measures     therefore    have   to   ensure   that  the
industry can increase its prices to cover production costs and make a
reasonable profit. Based on the profits realized in previous years and
the   industry's   ongoing    long-term     investment    requirements,     8%  was
estimated to be a reasonable figure.
 ---pagebreak---                                       - 20 -
 The Commission then calculated the price increases that would enable
 the Community industry to cover all its costs and make a profit of 8%.
The prices of the dumped imports were then increased by the figure thus
calculated, expressed as a percentage of the weighted average price of
these imports CIF at the Community frontier.
The   individual   Injury  threshold     for each exporter    was obtained   by
adding    the average   increase   thus calculated     to  the existing   anti-
dumping duty.
46.      These calculations produced an injury margin for each exporter,
and wl I I enable Community      producers to raise prices to restore the
 Industry to health.
47.     The   dumping  margin    for    Romanian,  Yugoslavian,   Turkish   and
Taiwanese    producer/exporters      was    lower than    the  average  injury
calculated as    above.   In   Iine    with Article 13(3) of Regulation (EEC)
No 2423/88, this margin      is the figure used to determine the rate of
duty imposed on these exporters.
48.     Since there may be other producer/exporters who failed to reply
to the Commission questionnaire, failed to make themselves known in any
other way or failed to supply the information considered necessary by
the Commission, it is necessary, for the reasons set out in recital 25,
to   impose a duty calculated       on   the basis of    the most  appropriate
available information. Consequently, the highest appropriate margin was
applied to these firms.
49.     No duty wi I I be    levied on Mexican and US producers, for the
reasons set out in recitals 29 and 30.
50.     The Council confirms the above.
 ---pagebreak---                                         - 21 -
 3.       Form
51.       No argument was put forward to Justify a change in the form of
 the   anti-dumplng   duties   under     review.    Consequently,    it would    seem
appropriate for the ad valorem format to be retained.
                              G. COMMUNITY INTEREST
1.       Situation of the Community industry
52.      To leave the Community      industry without protection against this
unfair     competitlon   would    lead    to  a   further   deterioration     in  the
situation. The injury already suffered by the Community             industry in the
past    led to   the  imposition of      the measures under      review. As     these
measures have not eliminated the injury, the situation of the Community
producers remains precarious. Any further deterioration would endanger
Jobs and     investment   in a sector on which many downstream            industries
depend.
2.       Situation of the importers
53.      The   importers   argued   that    they  are   in a difficult     position,
since they are caught between          large Community     fibre producers on the
one hand and, on the other, a powerful              fibre-processing    industry to
which not all the effects of anti-dumping measures can be passed on.
Consequently, any anti-dumping duty would cut importers' profit margins
and threaten their very existence. The Council               does not accept     this
argument. The allegations concerning the effect that the retention of
anti-dumping     measures    would     have    on    importers'   competitive     and
financial situation were not substantiated. Given that the outcome of
this review will be to discontinue some of the duties imposed in 1988
and to cut others, imports should, in some cases at least, become iess
expensive. Furthermore,       the   importers' arguments miss         the  point   of
anti-dumping measures, which is to restore healthy competition that is
not distorted by unfair practices. This objective would be compromised
if   it were possible     for   importers    to take advantage of       such unfair
compet it ion.
 ---pagebreak---                                       - 22 -
3.      Balanclna the interests
54.     Having    considered    the   arguments   set  out    above,   and  the
significant part played by the imports in question in the difficulties
confronting    the   Community    polyester   fibre   industry,    the  Council
concludes that Community     interest requires the retention of the anti-
dumping   measures    previously    imposed,  readjusted   in   I ine  with  the
conclusions of this enquiry.
                                  H.  NEWCOMERS
55.     For producers who are newcomers to the market, and who did not
export during the reference period, the Commission         is prepared to re-
examine the situation if the exporters concerned can demonstrate that
they did not export to the Community during the period of the enquiry
(recital 9 ) , that they began to export after this period, and that they
are not   related or    I inked   to any of   the companies covered     by  this
enquiry. Such claims must be supported by appropMate evidence.
                   I. PERIOD OF VALIDITY OF THE REGULATION
56.     This Regulation should be considered an amendment to Regulation
(EEC) No 3946/88      within     the    meaning    of   Article      15(1)   of
Regulation (EEC) No 2423/88. The measures will therefore lapse after a
period of five years starting from the date on which this Regulation
enters into force,
HAS ADOPTED THIS REGULATION:
 ---pagebreak---                                      - 23 -
                                  Article 1
Article   1 of Regulation (EEC) No 3945/88        is hereby   replaced  by the
following:
                                  "Article 1
1.     A definitive anti-dumping duty       is hereby   imposed on  imports of
synthetic   polyester   fibres    falling     within CN code 5503 20 00 and
originating   in Talwan, Romania, Turkey and the Yugoslav Republics of
Serbia, Montenegro and Macedonia.
2.     The   duty,  calculated   on   the basis of     the  free-at-Community-
frontier prlce of the product, not cleared through customs, shall be:
        13% for polyester fibres originating in Taiwan (additional taric
       code   8195),   with   the   exception   of   those   produced  by   the
       companies   listed   below,    to which   the   following  rates   shall
       apply:
       Far Eastern Textile Ltd., Taipei                    6.8%
       (Additional taric code 8192)
       Nan Ya Plastics Corp., Taipei                       5.9%
       (Additional taric code 8193)
       Shingkong Synthetic Fibres Corp., Taipei          13.0%
       (Additional taric code 8194)
       15.6% for polyester fibres originating in the Yugoslav Republics
       of Serbia, Montenegro and Macedonia
       (Additional taric code 8263)
       11.4% for polyester fibres originating in Turkey
       (Additional taric code 8198)
       14.1% for polyester fibres originating in Romania
       (Additional taric code 8262).
 ---pagebreak---                                   - 24 -
3.     The   definitive  anti-dumping  duties   applicable  to   synthetic
polyester  fibres falling within CN code 5503 20 00 and originating in
the United States of America and Mexico are hereby repealed and the
proceeding with regard to these two countries is hereby terminated.
4.     The provisions in force concerning customs duties shall apply."
                                Artlcle 2
This Regulation shail enter into force on the day following that of 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
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                                                              COM(92) 304 final
                                                     DOCUMENTS
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