EU continues to investigate dumping case – no provisional tariffs to be applied

The European Commission has issued an interim report on its investigation of alleged dumping of a wide range of fasteners by Chinese producers. The investigation started in November 2007 and a decision on preliminary tariffs was due by 8 August. The report concludes "there are several crucial elements of the investigation which merit further careful analysis". As a result the Commission has proposed that provisional measures are not applied but that it would continue to investigate the case.

Outstanding issues, according to the report, include verification that the production volume of the complainants exceeds the minimum 25 percent of EU production required for the complaint to be valid. There have been persistent rumours, but no firm evidence, that a significant complainant may have withdrawn support, which could mean the figure falling below the required threshold. Investigators also intend continuing to work on dumping and injury calculations, which the report indicates are currently inconclusive, as well as delving into whether, as is argued by importer associations, type and quality differences between Chinese and European product have implications for these calculations. The report conclusion also indicates that the investigators will consider the significance of dramatic increases in raw material costs that have occurred since the investigation period, which covers October 2006 to September 2007.

The body of the 26 page report notes that imports from PR China to the EU increased by 180 percent between 2003 and 2007, resulting in market share increasing from 17 to 26 percent. EU producers share declined by 8.8 percent over a three period. Preliminary calculations, although described as approximate and requiring further evaluation, showed "considerable dumping margins". Market economy status has been denied to Chinese producers, so dumping calculations are made between Chinese export prices and the domestic price in an "analogue" country, which the Commission has provisionally adjudged should be India, since it was unable to obtain cooperation from fastener producers in Taiwan or other countries.

The Commission has scheduled a hearing on 18 September to which representatives from distributor and manufacturing associations and other interested parties have been invited. This hearing will focus on the scope of products included in the investigation and the issue of comparability between Chinese and EU products.

A final decision on the case, which in the event of tariffs being applied requires authorisation by the EU Council of (Member State) Ministers, must be published by 8 February 2009.