Anti-Dumping Investigations in the European Term Paper
- Length: 11 pages
- Subject: Government
- Type: Term Paper
- Paper: #68064976
Excerpt from Term Paper :
They are frequently discussed and re-filled so that they meet the required standards, and then the investigations are launched. Furthermore, as the previous section has shown, the investigation is launched if the product in question makes up 25% of the entire production volume within the European Union. Eggert however feels that this limitation is too low and should be raised to 50%.
Investigation: the levels of transparency are generally reduced and the information used in the investigation is seldom made public. The investigation allows parties to participate in the resolution, but imposes a ten day limit for signing up; similar time limitations are imposed and they are not enforced by constitution and not necessary. Investigations relative to NME -- Non-Market Enemies -- are granted special treatment, but the criteria to establishing which countries are not market threatening is not publicized. Similar to NME, there are also MET -- Market Economy Treatment; these countries are generally imposed lower duties, but the criteria used in naming a country MET is also blurry.
The Anti-Dumping Committee: the vote of the members is generally biased and prejudiced in the meaning that it seeks to satisfy the acceptance of the proposals forwarded. Additionally, when a member of the committee is absent throughout a voting session, his vote is automatically registered as a vote in favor of passing the proposed measure.
Implementation of measures: the main criticism of this part is related to the five-year duration of the definitive measures. This is inefficient in the contemporaneous context of decreasing product life cycle and Eggert feels that a more adequate time period would be of three years.
Reviews: in this field, the editor at the FTA argues that "importers should be permitted to claim reimbursement of duties paid between the normal expiry of duties and the negative conclusion of an expiry review. In addition, the 15-month period permitted for the conclusion of interim and expiry reviews is too long. Furthermore, there is no consideration of "Community Interest" when deciding on the extension of duties" (Eggert, 2006).
4. A Decade of Investigations
Up until now, the paper has presented the dual understandings of the European Union's approach to anti-dumping investigations. On the one hand, representatives of the European Commission argue that the policies are developed and implemented in order to protect the industries within the Community against illegal practices. On the other hand, there is the belief that the anti-dumping regulations are a form of protectionism and that they should be removed. Aside these two opinions, which might be biased in the context in which each issuing party promulgates its own beliefs, it would be necessary to assess the actions and impacts of the European Union's decisions regarding anti-dumping.
Throughout the 1998-2008 decade, the general trend at a global level has been that of fluctuating anti-dumping regulations and conducting more investigations with the intent of identifying and resolving dumping conflicts. From this standpoint, the European Union became integrated in the trend and cannot be accused of setting it, but simply following it. In 1998, the EU had initiated 21 investigations, out of which 13 ended in definitive measures. At the end of the period, the number of commenced investigations was of 18, but they had yet to be resolved and remain under investigation. The low of the assessed decade was in 2003, with only 7 investigations commenced -- 6 of them however ended in definitive measures. The peak was registered in 1999, when 66 investigations commenced -- 41 of them concluded in definitive measures. Throughout the entire period, 287 investigations were initiated, out of which 161 ended in definitive measures, 108 ended without definitive measures and 18 remain under investigation. The table below reveals the number of investigations commenced and their outcome, whereas the chart points out the evolution of the results of the investigations:
Source: Davis, 2009
Source: Davis, 2009
A deeper look at the 287 investigations conducted from 1998 through 2008 reveals the existence of four distinct patterns which characterize the anti-dumping investigations of the European Union. These patterns are succinctly described throughout the following lines:
Target countries -- the European Union generally launched investigations against emergent and developing economies, with the largest proportion of them being located on the Asian continent -- 59% of the total investigations involved exports from Asia, with the disputes over Chinese imports totaling up to 24%; another region is Eastern Europe, including Russia, with 26% of the investigations
Target sectors -- 28% of the investigations were focused on input goods; 23% targeted chemical products and 18% focused on steel -- all these sectors within the European Union had suffered demises and had become less competitive; from this standpoint then, it can be assumed that the investigations were launched as a means of safeguarding the declining competitive edge of the local industries
Dumping quotas -- the general trend and the average values have been maintained throughout the decade; yet, a closer look will reveal that the quotas for the sectors previously mentioned increased and were significantly larger than those for products in other sectors; dumping margin for steel was for instance of 62.1, whereas average dumping margin for electrical products was of 13.8.
Outcome -- once the investigation has been launched, the most probable outcome is that of definitive measures against the investigated country or product. Proof of this stands the fact that out of 287 investigations initiated throughout the decade 1998-2008, 56.09% ended in definitive measures (Davis).
5. The Case of China
Throughout the trade relationships between the two parties, China has constituted a primary target of the European Union's anti-dumping investigations and measures. The eastern Asian country represents by far the most commonly investigated state, with 24% of all investigations in the decade 1998-2008 being focused on it; the next in line are India and Korea, but with only 7% each, revealing a great difference from the occupant of the first position. Even as the trend throughout the 1990s showed a decline in anti-dumping investigations, actions against China remained on the rise (Strange, Slater and Wang, 1998). The chart below reveals the composition previously mentioned:
The two most recent and notorious cases revolve around the definitive measures implemented by the European Commission in terms of Chinese shoes and steel-based products. Even as the world is facing the internationalized economic crisis, the European Union continues to impose new restrictions on Chinese products. Throughout the period of the past month only, the EU has launched five separate investigations on grounds of dumping practices on the part of the Asian party (Guangdong Electrical Home Appliances E-commerce, 2009).
The consistent investigations launched against China lead to the following three important findings:
(1) Establishing adequate dumping quotas remains a challenging task and the information onto which the EU bases this process is often insufficient, leading as such to biased findings
(2) the trends set in making China and its products a constant target raise questions of the EU's commitment to supporting fair competition
(3) Quantifying the impact of anti-dumping measures is also a difficult task, and it should not only consider foreign imports into the European Union, but the overall trade relationship between the parties (United Nations and Social Commission for Asia and the Pacific, 2002).
In the current context of liberalized markets, international parties strive harder that ever to ensure that free trade stimulates fair trade. The European Union is a highly notable representative of this category of international players and a great part of its international approach to politics is based on protecting its member states. With this agenda in mind, the EU has created a system which strives to reduce dumping practices. As soon as the European Commission receives a complaint, they investigate and come to a conclusion in about one year. The message sent is a clear one and states that the EC will continually discourage actions which are in the detriment of the industries of its member states. On the other hand, critics argue that the Commission is far too involved and its anti-dumping measures are in fact protectionist ones, which strive to discourage imports with the aim of stimulating local sectors.
Despite the inclination to believe one side or the other, the statistics of the EU anti-dumping investigations throughout one decade reveal an increased tendency of the Commission to investigate and implement measures against those economically emergent countries which manufacture products in industries where the EU members are losing their competitive edge. This situation has for years materialized in the often called abusive investigations launched against China.
Davis, L., 2009, Ten Years of Anti-Dumping in the EU: Economic and Political Targeting, European Centre for International Political Economy, http://www.ecipe.org/publications/ecipe-working-papers/ten-years-of-anti-dumping-in-the-eu-economic-and-political-targeting last accessed on August 25, 2009
Eggert, J., 2006, Observations on the EU Anti-Dumping Regulation, FTA Position for the Expert Meeting, the Free Trade Association, http://trade.ec.europa.eu/doclib/html/129812.htm last accessed on August 25, 2009
Strange, R., Slater, J., Wang, L., 1998, Trade and Investment in China: the European Experience,…