CELEX: 51983PC0418
Language: en
Date: 1983-06-24
Title: Proposal for a COUNCIL REGULATION (EEC) imposing a definitive anti-dumping duty on imports of 4,4' - Isopropylidenediphenol originating in the United States of America (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (83) 418
Vol. 1983/0157
 ---pagebreak--- Disclaimer
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concernant l'ouverture au public des archives historiques de la Communauté économique
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
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file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                         COM(83)   418       final
                                                         Brussels,    24      June 1983
                                 Proposal      for  a
                           COUNCIL REGULATION ( E E C )
          imposing   a definitive  anti-dumping duty        on i m p o r t s   of
             4,4'  -  Isopropylidenediphenol originating          in     the
                           United  S t a t e s of  America
               (submitted   to the  Council       by the  Commission)
 COM(83) 418 final
 ---pagebreak---                               EXPLANATORY          MEMORANDUM
1 . On  14   April    1982,      the     Commission p u b l i s h e d          a notice          initiating        an     anti­
    dumping     proceeding          concerning         imports       of    4,4'      -   IsopropyIidenediphenoI                    -
    commonly      known     as    "bisphenol"         -   originating            in    the    United       States      of     Amercia.
2.  The   investigation           revealed       that      one    company        -   US S t e e l     Chemicals -          was     respon­
    sible    for    96% o f     the    exports.        The d u m p i n g     marqins         were     established          at    29.61%
    for   "epoxy"      quality        bisphenol,         22.86% " p o l y c a r b o n a t e "       quality       and    51.65%
    for   other     "off     spec"      bisphenols.
    Throughout       the     investigation          US S t e e l      refused        to    divulge       the    prices        for     its
    sales    on the      domestic        market     or     details       of    its     production          costs,       so     the
    normal     values     were      established          on t h e    basis       of    the    best      information           available
    (data    supplied        by    the    complainant,          R h o n e - P o u l e n c ) . These normal            values        were
    not,    incidentally,           disputed       as    s u c h by     the     US     exporter.
3.  With    regard     to    injury,       the   total       volume       of    Community          imports      of    bisphenol
    shot    up   from    an a v e r a g e    level     of    790    tonnes        in    1973/79       to    4575    tonnes        in    1980,
    to   stabilize       at    around      2800    tonnes        in   1981      and     1982.
     Correlatively,          the     share    of   the     free     market        held     by    these      imports       increased
     considerably,           from 3.03%         in   1979      to   16.23% i n          1980,      10.74%      in   1981       and
     16.6%   during      the     first     half    of     1982.
    Examination        of    the     selling      prices       applied        by    the    main      firms     operating          on    the
    market     -   complainant          producer,        non-complainant                producers         linked      with       expor­
    ting    US c o m p a n i e s ,   importers       -    revealed        that      prices        on t h e    Ccnimunity         market
     had been p u s h e d      down     significantly            since      the     first      quarter       of    l/.iO    -     i.e.,
            when     US S t e e l    arrived      on t h e      Community          market      -   up    until     the    end      of
     1981,    which     initially         obliqed       the     Community          industry        to    align     its    prices        on
     those    of   the   United        States     imports        and d e p r e s s e d p r i c e s       by   some     15% i n       one
     year.
     The   subsequent         rise     in  prices       which      occurred          in   1981      was a g a i n    hampered         by
     imports      in  view     of    the    sharp     increase         in    the     Community         industry's          cost      prices.
     Undercutting         of   the     Community        producers         prices        by    some 2 t o       6% w a s        frequently
     noted.
 4.  Consequently,          the     complainant         industry's           market       share       fell    from     49.13%        in   1979
     to  44.87% a year            later,     to   increase         to    only      49.11% in          1981.
 ---pagebreak---                                                     -  2     -
   The m a i n    eLament        of    injury    consists         of   the  financial        losses     sustained         by    the
    com;.'' ,-'r   •>••   SHween the         second quarter            of  1980     and the    end of      1981      as a     resul
   of   the    prtTL-'jre       on    Community     selling        prices     from      imports    from    the     United
    States     and      uio   fall-off       in  production          resulting        from   the   smaller      market        shan
5. No f a c t o r    wu :    found     to  have    caused m a t e r i a l     injury      other    than    the      imports
    from    the   United        States     in   respect        of  which    dumping       has been p r o v e d .      T h e Regul
   discusses         in    detail      the  main    counter-arguments               put   forward     by   the     United
    States       party.
6.  In  view     of     t>ie f a c t s  as   finally      established         -   summarized above           -  the     Commissi)
   has    come t o       'he    conclusion       that     the     injury    c a u s e d by   imports      of   bisphenol         opt
   ginating       in      the   United     States     of   A m e r i c a may b e      regarded       as m a t e r i a l   a n d thi
   the    Community's           interests       make    it     necessary to         impose a d e f i n i t i v e      anti­
   dumping       duty       of:
   -   14.17%     for      bisphenol       of   the   "polycarbonate"             and    "epoxy"      qualities
   -   36.65% for          other      bisphenols.
7. The    Member        States     were    informed       of    this    proposal        when t h e    Anti-Dumping
    Committee        was     consulted.       The   latter        proved    to    be    very  much     in  favour       of     the
   proposed       measure.
 ---pagebreak---                                                                     Proposal        for   a
                                                         COUNCIL REGULATION ( E E C )
                                   imposing        a definitive            anti-dumping          duty    on    imports      of
                                  4,4'     -  Isopropylidenediphenol                     originating         in    the
                                   United     States        of      America
ITHE C O U N C I L OF THE EUROPEAN                 COMMUNITIES;
 Having     regard     to     the     Treaty       establishing            the     European Economic              Community,
 Having     regard     to     Council        Regulation            (EEC) N° 3 0 1 7 / 7 9       of  20   December       1979    on
protection        against         dumped o r         s u b s i d i z e d i m p o r t s from c o u n t r i e s   not    members
                                                                 1                                                                      2
 of  the    European Economic                Community                 as amended by R e g u l a t i o n         (EEC) N°      1580/82
iand   in  particular           Article       12     thereof.
 Having     regard     to     the    proposal         presented          by   the     Commission, after             consultations
within     the    Advisory          Committee          set     up    under    the     said     Regulation,
Whereas      :
A.    Provisional           measures
                                                                            3
1.    Commission         Regulation           ( E E C ) N°       163/83         imposed a p r o v i s i o n a l       anti-dumping
      duty     on   imports         of  4,4'-Isopropylidenediphenol                          (commonly      known     as   "bisphenol")
      originating           in    the   United         States        of  America.        In   view   of   the      countei—arquments
      presented        in    particular           by    the     principal          United     States    exporter,        US    Steel
      Chemicals,         and by        General        Electric          US a n d b y     General
      Electric       P l a s t i c s BV, the          Commission n o t i f i e d           the   exporters        concerned      of
      its    intention          to   extend       the     provisional           duty     for   a period       of   two   months     to
      enable      the    facts       to   be    finally         established.            Since the      exporters,        who    accounted
      for    virtually          the    whole      of    the     trade      in   question,        did   not    raise     any    objec­
      tion,     the   p r o v i s i o n a l d u t y was t h e r e f o r e e x t e n d e d , b y        Council       Regulation      (EEC)
                      4
      N°    1281/83        f o r a p e r i o d not e x c e e d i n g two m o n t h s .
  1
    0J    N°   L 339,     31 . 1 2 . 1 9 7 9 ,   p.     1 .
  2
    0J    N°   L 178,     22 . 6 . 1 9 8 2 ,    p.    9.
  3
    0J    N° L 2 3 ,     26 .1 . 1 9 8 3 , p .      9.
  4
    0J    N°   L 136,     25 . 5 . 1 9 8 3 ,   p.     12.
 ---pagebreak---                                               -   2   -
B. Procedu; : for           finally       establishing         the      facts
2. Following        the     imposition        of    the    provisional           anti-dumping               duty,      the     principal
   US e x p o r t e r    United      States     Steel      Chemicals, Pittsburgh,                       P e n n s y l v a n i a , and
   the   European s u b s i d i a r y        of   another      US e x p o r t e r ,      General          Electric         Company,
   Indiana,        requested         and   were     granted      a    hearing.
   These    c o m p a n i e s and     a   Community        end-user        of    bisphenol,             Hoechst        Holland       NV,
   Weert,     Netherlands,            also    took      the   opportunity             of  making          known      their       views
   in    writing.
3. In  the    lijht       of    the   information          available          to    it   at      that     time     the     Commission
   sought     and o b t a i n e d     further       information          from       the    complainant              producer,
   ProgeUc,          -   on b e h a l f   of  which       the  European           C o u n c i l of      Chemical          Manufacturer
   Federations           (Cefic)      had    lodged       the  initial          complaint            -  and     from      other
   non-compiainant              producers        linked      with    American e x p o r t e r s ,             namely       General
   Electric       P l a s t i c s BV,     Shell     International             Chemical           C o m p a n y , Dow C h e m i c a l
   GmbH a n d      Dow H .      und   V.   GmbH. The         Commission a l s o            contacted            certain         Community
   consumers         of   the     product      in   question,        which        then    gave         their      views      on    the
   duty.
   After    undertaking             a detailed       examination           of     the    information              thus        collected,
   the   C o m m i s s i o n made     an    inspection        visit      to     the     complainant             and the        premises
   of   Shell      ICC, London, United                Kingdom.
4. During     the       further      examination          of  the     facts       conducted after                 the     duty     had
   been   imposed, the              principal       parties       c o n c e r n e d were          informed        of    the     grounds
   on w h i c h    definitive          determination          was e n v i s a g e d .
5. The   arguments          put     forward      by   the    parties        concerned following                    the       introduc­
   tion   of    provisional           measures dealt           primarily            with       :
   -  the    comparability             of   the   products        in    question;
   -  the   determination              of   the    dumping      margins,           in   particular            with       regard
      to  "off         spec";
   -  the   determination              of   the    injury     c a u s e d by      the    dumped          imports,         the     main
      points       raised        in  this    respect        being     the      volume      of       imports       in    relation       tc
      Community          consumption,          the    impact     of     those        imports          on t h e     complainant
      producer's           prices      and o t h e r     factors.which             could.also            have     given       rise    to
      the    injury        in    respect     of    Progelec.
 ---pagebreak---                                              -   3    -
C.    Like     product
6.   With     regard     to    standard      quality        bisphenol           (polycarbonate           and epoxy)        the
     argument       that     bisphenol       of    this     quality         s o l d on t h e    United       States     market
     was n o t    a  like      product, within           the    meaning        of    Article     2    (12)    of  Regulation
      (EEC)     N° 3 0 1 7 / 7 9 , i n   relation       to    that     exported        on  to    the     Community       market,
      has   been withdrawn            by  the    United        States      exporting         party.
     The a r g u m e n t  put     forward      instead         is   that,      within     the     first      quality,
     "polycarbonate"            and " e p o x y "    bisphenols          are      not  like    products        the    one   with
     the     other.
7.   With     regard     to    "off    spec"     b i s p h e n o l , the      position     of    the     principal        United
      States     exporter,        US S t e e l ,   is    completely           unchanged, namely             that    :
     -  "off     spec"     is   a product        which       cannot       be    regarded     as being         similar      to
        standard       quality        bisphenol;
     -  it    is  a non-reproducible                 product        -   since      it  results        from     interruptions
        in    the   manufacturing          process -          of    a quality         very    inferior        to   standard
        bisphenol;
     -  failure      to    satisfy       any   one of       the     criteria         generally        used    in  the    commercial
        specifications            for    first-quality            bisphenols          was e n o u g h    to   downgrade       the
        product,        limit     the    number      of   applications             and t h e r e f o r e   lower    its    market
        value;
    -   lastly,      a very       small    number        of   e n d - u s e r s was a b l e    to     use t h i s    product
        because      of    its     characteristics.
8.  The     further      investigation           carried        out     by t h e     Commission, for            both    the
     standard       qualities         and  for     "off     spec"      bisphenol,         showed t h a t        :
    a)    from    the    technical        point      of    view,      the     main    criteria        determining         the
          quality      of   bisphenol        were      the      freezing          point,   colouration,            the
          levels     of   phenol       and   iron      and,      lastly,       the    presence of           impurities;
   b)     the    commercial         specifications            relating         to   these.criteria            for   polycai—
          bonate     and epoxy b i s p h e n o l s w e r e ,        even      in   the  opinion         of  the    non-
          complainant         producers        linked       to    US e x p o r t e r s  and of        the    Community       con­
          sumers     of   bisphenol,         very      much t h e       same i n      the   USA a s      in   the    Community;
 ---pagebreak---                                               -   4   -
c)  wit,'          ird   to   "off    spec",       failure       to   observe    one    or   other      of    the
    comn.t-"!. i a l    specifications           relating        to   these   criteria       did     not     neces-
    sar-     y mean,       for    the    end-user,        that     difficulties       would      be    encountered
    in   i     ng   the    product       but   that     generally        the  cost    of    using      it   would    be
    higher,       varying       according        to   the    application        and,     in  particular,           according
    to   the      impurities;
    the    extra       cost   of    using    it,     although        very   difficult       to    quantify,        was
    generally          low;
    this      'off     spec"     was   supplied       regulary        and   for  a number         of   STX-month
    periods        between       the   end   of     1980    and the      beginning       of   1982     to     certain
     Community         consumers       a n d met     the    specifications         agreed       to   by     those
     consumers,         thus     contradicting          the     argument     that    it    was     non-reproducible
    and     that     each batch        was   "unique"         in    nature;
     a  large      proportion         of   the    Community         end-users     is    able    to    use     this
     "off     spec"     bisphenol,         for    a  substantial          range   of    applications;
     the    US b i s p h e n o l   invoiced       as   "off      specification"         is   of   a    quality
     which      could,      in    certain     batches,         have been      equivalent         to   that      of
     epoxy-type          first-quality          bisphenol.
 9.  In    view     of   these     results      the     Commission i s        therefore        convinced          that
     all     types     of   bisphenol        marketed        in   the    Community,       whether        of   United
      States      or    Community       origin,       are    products       having    at    least      "characteristics
      closely       resembling"         one     another.
      They    are     therefore        indeed      "like     products"       within     the     meaning        of
      Article       2   (12)    of   Regulation         ( E E C ) N°    3017/79.
 ---pagebreak---                                                      -  5    -
D.   Dumpi n g
10.  The p r i n c i p a l     US e x p o r t e r ,     US S t e e l ,     persisted         in     its   refusal         to   d'wulge      the
     prices        for     its   sales        on   the    domestic         market     or     details       of     its      production
     costs.
11.  Since       n o new      argument          has    been put        forward       regarding          standard           quality
     bisphenol           (po l y c a r b o n a t e and e p o x y ) ,     the    preliminary            determination              of
     dumping         is    now   regarded          as   final.         The w e i g h t e d      average      dumping           margins,
     expressed          as    a percentage             of   the     CIF p r i c e    free-at-Community                   frontier,
     not     cleared        through         customs,        are     22.86% f o r      polycarbonate              quality         and
     29.61%        for     epoxy       quality.
12.  With      regard       to   bisphenol            invoiced       as    "off    spec",         in   respect        of    which     the
     Commission            investigation             has    confirmed         that    it     was     indeed       a product          similar
     to   the      other      types       of    bisphenol         marketed        in  the       Unite;'    States         and     the
     Community,            account        must     be   taken,       when     establishing             the   - o r , .31    value,      of
     the     extra      costs      which        may b e     involved        for    the     end-user        -r.    employ inn
     bisphenol          which      does       not     completely         satisfy      the       first    qu       icy      standards
     because        of     certain        differences            in  the    physical         characteristics                of    the
    product.
     The     Commission has               therefore        endeavoured           to   determine          th<     effect        of    those
    differences             on   the     market        value      of   "off-spec"          bisphenol                the      United
     States.        In    view     of     the     total     lack     of    cooperation            from   tht.    nrmin      exporter       in
    question,           referred          to    in   point      10 a b o v e ,   and of         the    similarity           of    the
                                                                                                                      f
    US S t e e l      and     Progelec          technologies,            the    C o m m i s s i o n has    thr-r        ore     adjusted
    the     "off-spec"           normal         value     in    the     light    of   the       best    information             available.
    On t h e       basis     of    the     accounting           principle        followed          by   the    complainant             for
    its     second q u a l i t y ,         namely       that      only     the   variable          production           costs      are,
    in    addition          to   a   reasonable           profit       margin,       charged         to  the       substandard
    products          -   and by       applying         to     the   normal      value       of    $ 1168.45/metric                 ton
    for     first-quality              US b i s p h e n o l     the   appropriate            adjustment          at      the
    ex-works          stage,       the     normal       value       for    "off    spec"        has   been     established            at
    $    939.97.
    On t h e      basis      of    this      normal       value,      the    average         dumping       margin         for    "off    spec"
    bisphenol           eventually           comes t o         51.65%.
13. Given the           revision         of     the    dumping       margin      for    "off       spec"     bisphenol,            the   overall
    average         dumping        margin         for   all     the   qualities         together          comes t o         34.12%      for
    all     United        States       bisphenol          exports        to  the     Community          during        the      period
    c o v e r e d by      the     investigation.
 ---pagebreak---                                                           -    6  -
E.   Injury
14.   In   the    light       of   the    information             collected          and   verified           after      the        provisional
      duty     was     imposed       a detailed             review      was    undertaken           of    the     Commission's
      provisional           conclusions           via      an a n a l y s i s    of   the      bisphenol           market.
      This     review       confirmed          the     analysis         of    the    injury        set     out    in    Regulation            (EEC)
      No 1 6 3 / 8 3    a n d made       it    possible          to    be more        specific         about       certain            points
       relating        to    :
             the     actual       size     of    the     free      and     captive      markets,           which      made        it   possible
             for     the    market       shares        held      by    the    various        firms       to    be   calculated             exactly;
             the     impact       of   US i m p o r t s       on   the     complainant            producer's           prices;
              the    role      played       by   producers            linked      with    US       exporters;
              generally          speaking,          the      possible        causes,      other        than      dumped         imports,          of
              the     injury       affecting          Progelec.
 15.   The    Community's            imports        of   bisphenol           originating            in    the    United          States       of
       America       went      from     an a v e r a g e      value      of    (*          )    in    1978-79        to      (*          )    in   1981
       fell     again      to    (*           )   in    1981,       to    increase       again        to    (*           )     in    1982,      of
       which      (*           )   was    for     the     first       six    months      alone.
        Correlatively,             the    share       of     the    total      market       (sales        on    the    free        market       and
        internal        use)     (i.e.,       some 1 3 0 0 0 0          t)   accounted          for     by    these      imports           rose
        from    0.61% i n        1978     to    3.73%        in   1980 and         stood       at    1.60%      in    1981       and    2% i n     198
        Since     virtually          all     the     imports         from    the     United        States       were      intended           for
        the    free     market,        which       is   the      market      on w h i c h      the     complainant              operates,
        penetration           of    the   product          originating            in   the     United       States        was        also
        measured with             reference          to     the    free     market      in     the     Community           :    2.70%      in    1978,
        3.03%     in    1979,       16.23% i n         1980 -        corresponding             to    US S t e e l ' s     arrival         on     the
        Community         market       at    the     end      of   1979 - ,       8.16%      in    1980 -        which         reflects
        US S t e e l ' s    production          difficulties               that     year     -   and     a further            increase         to
         16.6% d u r i n g      the    first       half       of   1982,      when     the     effect        of   the      notice         initiate
         this    proceeding           had    not     yet      been      felt.
 (*)     Confidential            figures.
 ---pagebreak---                                                             -    7   -
16.  With       regard        to    the    impact        of     US i m p o r t s     on     the    complainant        producer's         prices,
     it     was a l l e g e d       by   the      principal            US e x p o r t e r    that    prices      on   this     market     were
    determined              exclusively              by   the      interrelation             between      Progelec -        which     is    the
     principal            European s u p p l i e r             of   bisphenol          on t h e     free    market      but    which     does
    not       produce         resins       -    and     the     other        non-complainant             European       producers,
     Dow a n d        Shell       -   which       themselves            are i n t e g r a t e d   downstream         (resins)      to   a    very
     large        extent,         with     the       result        that      they    are     principally         interested        in    resins
     rather         than      bisphenol            itself.
     Consequently,                it    was     alleged         by     US S t e e l    that     US i m p o r t s   had   not     influenced
    free        market        prices       in     the    Community            at   a l l ,   as   the    company's       policy      had
    been        to    align       itself       on     the     prices         established          by   competition          between
    Progelec,             Dow a n d       Shell.
    A comparison               of    the     selling          prices       charged         by   the   complainant          producer
         and t h e       non-complainant                 producers            at   the     delivered-to-customer                 stage,
          in    each of        the     principal           Member         States       concerned        with     the   prices      of    the
         dumped         US p r o d u c t s     clearly          showed         :
         -    that      the    massive          intrusion           of    US b i s p h e n o l    on   the    Community        market     at   the
             end of        1979 d e p r e s s e d p r i c e s           throughout           1980 t o     a   level    which,      in    absolute
             terms,        was      15% b e l o w       their       previous         level;       that    during      1980     the   prices
             at    which       the     US i m p o r t s       were       resold     were      more    often      than    not    3% t o    5%
             below       the     prices        charged          by    the     complainant,           despite       the    downard
             alignment           of    the      latter's          prices;         that     US b i s p h e n o l  prices      were,    from     the
             second quarter               of      1980 t o        the     last     quarter       of   1981      inclusive,        below     the
             minimum         level       required          for      the     Community          industry       to   cover     its    production
             costs,        despite        the       reduction           in    the   costs       of   its    raw   materia Is(benzene)
             throughout             1980;      that      the      other       non-complainant             producers,        which      were
             integrated             as   regards         resins         -  and hence           less   vulnerable         than     the
             complainant             on   the       free      market       -     evidently          chose not       to   engage     in    a
             process        of      pushing         prices        down     and     consequently           generally         maintained
             their       prices        above        those       of   US S t e e l     and     the    complainants;
        -    that       as   from      the     last      quarter          of     1980,     the   increase        in   the     supply
             costs       of    benzene,            the     raw      material        from      which     the     complainant's         bisphenol
             is    derived,          was     s u c h on       the    Community          market       that     the   complainant          was
             unable t o m a i n t a i n         i t s p r i c e s at t h e d e p r e s s e d l e v e l t h e y had r e a c h e d as a
             r e s u l t of t h e c o m p e t i t i o n f r o m t h e U n i t e d S t a t e s i n         1980    and    had    no
 ---pagebreak---                                                                -    8    -
  alternative            but      to   try    and      reflect           its     higher       production            costs       in    its    selling
  prices;         this      rise      in   prices         in     1981       coincided         with       a temporary            reduction          in
  exports         from      the     United       States;           that,       however,         the      increase          in   prices       by    the
   complainant            was      less     than     would         have       been warranted               by    the     rise     in    its    cost
   prices;        that      during        1981      the      prices         at   which       US i m p o r t s      were      resold       were     more
   often      than      not      2 to     5% b e l o w       the      prices       charged          by    the     complainant;             that,
    consequently,              it    was n o t      until        the      first      quarter          of    1982     that      the      complainant
    ceased       to    sell       its    bisphenol           at     a    loss.
    It    is   therefore            quite     clear,          in    particular            because of            the    price         undercutting
    noted,       that      the      part     played         by    bisphenol           imports          from     the     United        States       - i n
    respect        ci    which        dumping        had been p r o v e d             -    was n o t       a p a s s i v e one        on   the     free
    market        in    the     Community.             Although,              until      the   middle          of   1981,       the     general
    trend       of    the     bisphenol         market           reflected          the      variations             in    the     price      of
     benzene        and although s u b s e q u e n t l y                the    demand        for     epoxy       resins        exerted       an
     underlying           influence,           it     is    nevertheless               true     that       the     fall      in   bisphenol          prices
     during        1980     and up        until       the      beginning           of     1981      would       not    have      occurred        -
     at    least      not     to     the    same e x t e n t          -    in   the     absence of            the    dumped        imports        from
     the     United       States.           Since       the       integrated            producers           -   Dow a n d       Shell     -   were
     producers           of    resins        rather        than       of     bisphenol         it     was n o t      in     their       commercial
      interests          to    lower      their        prices          on t h e    free       market        to    a   level       which      would
      enable       their       consumers          -    i.e.       resin        producers          -    to    attack       them      on    the
       market      for     their       own     resins.
17.    With     regard       to     the    other       factors           also     capable          of    causing        injury        to    the
       complainant            it    was    alleged          by     the      United       States         party      that,       in    general,
       Progelec's           financial          difficulties                 stemmed        from      the      role     played        by   the    non-
       complainant            producers,            Dow a n d         Shell,       on t h e      bisphenol          market         from     the    angle
       of    both     prices         and    production              capacity         or     from      that      of            competition          on
       non-Community                markets:
        «*   With      regard        to   prices         it    has       already        been      stated        that      in    1980     and    for     most
             of    1981      the     attitude          of     the      non-complainant                producers           had been         not    to    get
             involved          in     pushing        down       prices.           This       was     reflected          in    the     fall     in
             their       share        of   the    total         market,          which       declined          from     45.09%        in    1979     to
              38.43%,        to     rise     again       to     only        42.11% in         1981.
 ---pagebreak---                                                       -    9    -
         With   regard        to   production          capacity,          which,      it   is   alleged,had             become
         excessive        before     the     arrival         of    US S t e e l    as a    result        of   the      installation
         in  Europe of         non-complainant               producers          linked     with     US p r o d u c e r s ,      it
         should     be n o t e d    that     the     average         plant     utilization          rate      was    71.6% i n        1979.
         However,       with     the    flood     of    imports          from    the    United      States        in    1980,      this
         rate   fell      to    58.9%, to        climb       back      to   only     60.8% i n       1981.
         Lastly,      it   must     be   stressed that               the     competition         from       non-complainant
         producers        affecting        Progelec's sales outside                       the    Community          has     steadily
         declined       since      1979 as t h e s e         companies'          extra-Community               exports        fell
         from    (    *     )   in  1979 t o       (    *      )   in    1980,     (    *    )   in    1981      and    (  *     )
         in  1982,      i.e.,      a 64.6% f a l l         in     four     years.
  18. It  was a l s o     alleged       that,     of     the      possible       causes of         injury        to   Progelec
      other    than     the     imports      in   question,            the    decline       in   demand f o r        bisphenol         in
      the   Community         was a t    the     root      of     the    complainant's            difficulties.
      In   this    connection,          information            c h e c k e d by    the    C o m m i s s i o n shows       that     demand
      for   bisphenol         on   the   free     market          in   the    Community        has d e c l i n e d      to   a   much
       lesser   extent        than    was    initially            estimated        at    the   time      of    the    provisional
      determination.             Thus    total       s a l e s on      the    free    market       felt      from     29 414       tonnes
      in   1979 t o     28    190 t o n n e s    in    1980       (i.e.,      by   4.16%)      and     to    2 7 271      tonnes      in
      1981   (only      7.28% down on            1979).
      Correlatively,           the    volume      of    the       complainant         producers'            sales     fell     by   12.50%
      in   1980 compared w i t h           1979 -       despite          the    alignment        of    its     prices      on     those
      of   imports      from     the    United       States,         and     its   market      share        fell    from     49.13%
      in   1979 t o     44.87%.
      In  1981     the    volume     of    P r o g e l e c ' s s a l e s was up o n          1980 but          it   stood      at   a   level
      which   was     still      7.35% below           that       for    1979,     and    the   market         share      also     rose   but
      without      returning        to   its     1979       level.
      It  is  therefore          clear    that       sales        lost    by    the   complainant            producer        in    1980, and
      to  a  lesser       extent      in   1 9 8 1 , were         well     in   excess of        the      fall-off        in   demand
      and   coincided with           the     arrival         of    large      quantities         (4    575     tonnes)       in    1980
      of  US b i s p h e n o l   on  the     free     market         in   the     Community.
*   Confidential         figures.
 ---pagebreak---                                                      -   10     -
     Moreover,        it    is    clear       that    the    loss      of  the   complainant's              market       share      did
     not   ben-fit        the    non-complainant               producers,        as     is   shown by          the    decline       in
     the    la• rer's       market       share      from     45.09% in        1979 t o       38.43% in          1980.         Furthermore,
     it   is    iobable         that     one of      the     factors       responsible          for     this      decline        in   the
    non-coinplainant             producers           market         share   is,    in     addition        to    the     impact      of
     imports     from       the    United        States,       the     decision      taken      by    these       producers         to
    process      more       bisphenol          into    pre-resins,          this     being       reflected           incidentally
     in  the    confidential             figures       which       the    Commission possesses                   regarding
     internal       use.
    Lastly,      it     has    been      clearly       established that              the    moderate           contraction          of
    the    free    market        since        1979 has       affected       the    Community          industry          considerably
    more     than    imports         of     bisphenol        from      the  United        States.
19. Consequently, the                facts      as   finally          established         (points       2 to      18)     indicate
    that     tho   injury        c a u s e d by    dumped         imports    of    bisphenol          originating            in    the
    United      States       must,       judged      in   isolation,         be    regarded         as     material.
F.  Community          interest
20. The p r i n c i p a l    US e x p o r t e r    a s s e r t e d , as d i d   two       Community         end-users           of
    bisphenc-l,         SCADO NV a n d H o e c h s t           Holland      NV N e t h e r l a n d s ,    that      the     imposition
    of   a definitive            anti-dumping           duty       on   imports     of     US b i s p h e n o l     would       limit
    the    supply      possibilities              of   the     consumers -which             are     also       manufacturers
    of   resins      -   and t h a t        in  this    respect         such a d e f i n i t i v e      d e c i s i o n would       be
    contrary      to     the     interest         of   the     Community.
21. In   this    context,          the     Commission re-examined                 the      impact       of     any     protective
    measures      on d e r i v e d       products       containing          principally           bisphenol           and    came     to
    the    conclusion that               it    was n o t    in     the    interests        of   the     Community          to    leave
    the    main n o n - i n t e g r a t e d     European producer,              the      essential          supplier         of    the
    free     market,       in    a situation           where       it   was t o t a l l y   v u l n e r a b l e to i m p o r t s    which
    have     barn p r o v e n      to   h a v e b e e n dumped and w h i c h             had    caused it           material        injury.
    The p r o t e c t i o n    of   the      interests        of     the   Community        industry          therefore          make
    it   necessary to            impose        a definitive            anti-dumping         duty      on    imports        of    bisphenol
    originating          in    the    United       States        of    America.
 ---pagebreak---                                                           -    11   -
    G.    Definitive          duty
 22.      In   the   Light       of   the    facts        as    finally     established          and-      in     particular,         the
          Community       industry's          production             costs,     the     Commission re-examined                  the    price
         needed to        enable        the    Community           industry       to   stop    selling          its    bisphenol       at    a
          loss    and t o      make     a reasonable              profit.       In   this     context,          it    seemed f a i r      to
         draw     a distinction            between,            on t h e  one    hand,      first     quality           products
         (polycarbonate             and    epoxy)        and,      on t h e   other,      bisphenol           not     conforming       to
         the    usual      standards.
        On t h i s    basis       the    C o m m i s s i o n came t o       the     conclusion        that       a definitive          anti­
        dumping       duty      of    less    than       the     amount     of   the     provisional           duty     should      be
        sufficient          to    eliminate         the       injury     done    to    the   Community           industry       by   the
        dumped       imports.
  H.     Undertakings
 23.    An u n d e r t a k i n g    was o f f e r e d      by    the    principal        US e x p o r t e r ,    US    Steel.
        The C o m m i s s i o n , f o l l o w i n g     consultation,            felt     that    it    should         not,   because
        of   the    features         of   the    Community            bisphenol       market     and      the       risks   of
        circumvention,             envisage        the        acceptance of          such    an    undertaking.
24.     With     regard       to   the    exporting            companies       which      could    not,        because of         the
       absence       of    exports        during       the       reference       period,      be   exonerated            from    the    charge
       of    dumping,        the     Commission determined                   that     it   was n o t      appropriate          to    exclude
       them     from    the      duty     because of            the    likely      impossibility            for      these    companies
       to    export     competitively             without           dumping.
 I.    Collection         of     the    amounts        lodged        by  way o f      provisional           duty
25.    In    view    of   the     final      determination              of  dumping        and   of    the      material        injury
       resulting        therefrom,          the     sums        lodged     by   way    of   security          for     the   37.6%
      provisional            anti-dumping           duty        must    be  collected         up   to    the       amount    of    the
      duty      definitively            imposed.
      HAS ADOPTED T H I S            REGULATION             :
 ---pagebreak---                                                       -   12     -
                                                   Article         1
1.     A definitive            anti-dumping            duty      is   hereby     i m p o s e d on   imports      of   4,4'
       Isopropylidenediphenol                     falling       within      subheading          29.06    B IV    of   the
                                                                                                                 _
       Common C u s t o m s         Tariff,             corresponding          to     NIMEXE     code    29.06 37,       originating
       in    the      United      States      of    America.
2.      The d e f i n i t i v e     duty     shall      be   fixed,      as   a percentage          of   the    net    free-at-
        Community          frontier        price,       not    cleared       through        customs,     at   :
        -   14.17% f o r        the     "polycarbonate"              or  "epoxy"         qualities;
        -          r
            36.6 ./o      for   bisphenol          having       other     characteristics.
        The     frt.9-at-Community               frontier          price,    not     cleared      through     customs,      shall   be
        net     if     the   terms      of   sale     provide        that    payment         shall   b e made w i t h i n   30   days
         of   thv      date    of    consignment;           it     shall   be   increased         by   1% f o r    each   month
         for    which      payment        is   deferred.
 3.       The   previsions           in   force      with      regard     to   customs        duties     shall     apply   to   the
          duty       imposed      in  paragraph          1.
 4.       For    the     purposes        of   this      Regulation        only      bisphenol       having      all  the     following
          characteristics              will    be    regarded         as  bisphenol          of  "polycarbonate"          or   "epoxy"
          quality        :
   Freezing          point                                                         >   155.0°C
   (dry basis)
   Colouration          in    solution                                              /10°      C APHA/HAZEN
   (25  g of      product/35          ml    methanol)
   Phenol      level                                                                 /p.10%
   Iron     level                                                                    <^1.5    ppm
    Impurities                                                                         none
 ---pagebreak---                                                       -   13   -
                                                   Article       2
The a m o u n t s  s e c u r e d by    way   of    provisional        anti-dumping              duty     in  accordance
with   Regulation          ( E E C ) No 1 6 3 / 8 3   shall      be d e f i n i t i v e l y    collected
up t o  the     amount       of   the   duties       definitively         imposed           in  respect      of  the
different       qualities         of   the   product,        referred       to     in    Article      1(2)    of  this
Regulation.
                                                   Article       3
This   Regulation         shall      enter    into      force      on the    day       of    its  publication        in
the  Official       Journal         of  the   European         Communities.
This   Regulation         shall      be b i n d i n g   in   its    entirety         and d i r e c t l y    applicable  in
all  Member       States.
Done a t   Brussels,                                                  For    the       Counci I