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Article 2(5) of the Basic Regulation and the adjustment of production costs in the light of the Anti-Dumping Agreement

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The article analyses the practise of the European institutions under Article 2(5), second paragraph of the Basic Anti-Dumping Regulation, whereby in determining normal value in anti-dumping investigations the actual production costs of exporting producers are adjusted or replaced by costs incurred by third-country producers when input costs are deemed not to reasonably reflect market prices. This will be systematically done where input costs are significantly below export or world market prices. The author considers the consistency of this provision with the WTO Anti-Dumping Agreement.

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Notes

  1. Pogoretskyy [4], p. 313.

  2. See e.g. Borovikov/Evtimov [2], p. 88; Tietje/Kluttig/Franke [5], p. 1075.

  3. DS473 EU—Anti-Dumping Measures on Biodiesel from Argentina, DS474 EU—Cost Adjustment Methodologies and Certain Anti-Dumping Measures on Imports from Russia, DS480 EU—Anti-Dumping Measures on Biodiesel from Indonesia.

  4. Council Regulation (EC) No. 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (codified version), OJ L 343, 22.12.2009, p. 51. It replaced Council Regulation (EC) No. 384/96 of 22 December 1995, OJ L 56, 6.3.1996, p. 1.

  5. Council Regulation (EC) 905/98, OJ L 128, 30.4.1998.

  6. Council Regulation (EC) 2238/2000, OJ L 257, 11.10.2000.

  7. Council Regulation (EC) No. 1972/2002 of 5 November 2002, OJ L 305, 7.11.2002, p. 1.

  8. Ibid., recital 5.

  9. See e.g. Van Bael & Bellis [6], p. 61.

  10. Borovikov [2], op.cit., p. 88.

  11. Engelbutzeder [3], pp. 159–160.

  12. Tietje [5], pp. 1076–1077.

  13. Council Regulation (EC) No. 950/2001, OJ 2001 L 134/1.

  14. Council Regulation (EC) No. 2229/2003, OJ 2003 L 339/3.

  15. Council Regulation (EC) No. 1891/2005 of 14 November 2005 amending Regulation (EEC) No. 3068/92 imposing a definitive anti-dumping duty on imports of potassium chloride originating in Belarus, Russia or Ukraine, OJ 2005 L 302/14, Recitals 30 et seq.

  16. Ibid., Recital 30.

  17. Ibid., Recital 31.

  18. Ibid., Recitals 31 and 32.

  19. Council Regulation (EC) No. 161/2006 of 23 January 2006 amending Regulation (EC) No. 950/2001 imposing a definitive anti-dumping duty on imports of certain aluminium foil originating, inter alia, in Russia, OJ 2006 L 26/1, Recitals 13 et seq.

  20. Ibid., Recital 14.

  21. Council Regulation (EC) No. 954/2006 of 27 June 2006 imposing definitive anti-dumping duty on imports of certain seamless pipes and tubes of iron or steel originating in Croatia, Romania, Russia and Ukraine, OJ 2006 L 175/4, Recital 94 et seq.

  22. Ibid., Recitals 96–98, 120–127. See also Council Regulation (EC) No. 812/2008 of 11 August 2008 amending Regulation (EC) No. 954/2006 imposing a definitive anti-dumping duty on imports of certain seamless pipes and tubes of iron or steel originating, inter alia, in Russia, OJ 2008 L 220/1.

  23. Council Regulation (EC) No. 1911/2006 of 19 December 2006 imposing a definitive anti-dumping duty on imports of solutions of urea and ammonium nitrate originating in Algeria, Belarus, Russia and Ukraine following an expiry review pursuant to Article 11(2) of Regulation (EC) No. 384/96, OJ 2006 L 365/26.

  24. Ibid., Recital 27.

  25. Ibid., Recital 58.

  26. Council Regulation (EC) No. 238/2008 of 10 March 2008 terminating the partial interim review pursuant to Article 11(3) of Regulation (EC) No. 384/96 of the anti-dumping duty on imports of solutions of urea and ammonium nitrate originating in Russia, OJ 2008 L 75/14.

  27. Ibid., Recital 24. In the framework of a new exporter review initiated in 2009, the authorities again concluded.

  28. Council Regulation (EC) No. 236/2008 of 10 March 2008 terminating the partial interim review pursuant to Article 11(3) of Regulation (EC) No. 384/96 of the anti-dumping duty on imports of ammonium nitrate originating in Russia, OJ 2006 L 75/1, Recitals 18–21.

  29. Council Regulation (EC) No. 237/2008 of 10 March 2008 terminating the partial interim review pursuant to Article 11(3) of Regulation (EC) No. 384/96 of the anti-dumping duty on imports of ammonium nitrate originating, inter alia, in Ukraine, OJ L 75/8, Recital 19.

  30. Council Regulation (EC) No. 907/2007 of 23 July 2007 repealing the anti-dumping duty on imports of urea in Russia, following an expiry review pursuant to Article 11(2) of Regulation (EC) No. 384/96, and terminating the partial interim reviews pursuant to Article 11(3) of such imports originating in Russia, OJ 2007 L 198/4.

  31. Council Regulation (EC) No. 240/2008 of 10 March 2008 repealing the anti-dumping duty on imports of urea originating in Belarus, Croatia, Libya and Ukraine, following an expiry review pursuant to Article 11(2) of Regulation (EC) No. 384/96, OJ 2008 L 75/33.

  32. Council Implementing Regulation (EU) No. 1194/2013 of 19 November 2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia, OJ 2013 L 315/2.

  33. Ibid., Recital 38.

  34. Ibid., Recital 66.

  35. E.g. case T-235/08, para. 44.

  36. Ibid., para. 46.

  37. Ibid., para. 53.

  38. Ibid., recital 72.

  39. Council Regulation (EC) No. 238/2008, recital 24.

  40. Beseler/Williams [1], p. 79.

  41. Borovikov [2], op.cit., p. 889.

  42. Tietje [5], op.cit., p. 1090.

  43. Appellate Body Report, EC—Fasteners, para. 317.

  44. See e.g. Appellate Body Report, US—Clove Cigarettes, para. 273.

  45. Appellate Body Report, EC—Tube or Pipe Fittings, para. 99.

  46. Panel Report, China—Broiler Products, para. 7.164.

  47. Panel Report, Egypt—Steel Rebar, para. 7.393.

  48. Pogoretskyy [4], op.cit., p. 319.

  49. ADP/W/83/Rev.2.

  50. GATT, Committee on Anti-dumping Practices, Minutes of the Meeting held on 25–26 Oct. 1982, ADP/M/9 (22 Dec. 1982), para. 75.

  51. GATT, Committee on Anti-dumping Practices, Ad Hoc Group on the Implementation of the Anti-dumping Code, Draft Recommendation Concerning Treatment of the Practice Known as Input Dumping, ADP/W/83/Rev. 2 (19 Dec. 1984), paras 5 and 6.

  52. The GATT, Draft Report (1985) of the Committee on Anti-Dumping Practices, ADP/W/104, 17 October 1985.

  53. Panel Report, US—Softwood Lumber IV, para. 7.321.

  54. Ibid.

  55. Ibid., footnote 446.

  56. Panel Report, EC—Salmon, para. 7.483.

  57. Panel Report, Egypt—Rebar, para. 7.393.

  58. Supra, fn. 5.

  59. Case T-512/09 Rusal Armenal v Council, para. 50.

References

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  2. Borovikov, E., Evtimov, B.: EC’s treatment of non-market economies in anti-dumping law: its history: an evolving disregard of international trade rules; Its state of play: inconsistent with the GATT/WTO? Revue des Affaires Européennes (2002)

  3. Engelbutzeder, O.: EU anti-dumping measures against Russian exporters—in view of Russian accession to the WTO and the EU enlargement (2004)

  4. Pogoretskyy, V.: The system of energy dual pricing in Russia and Ukraine: the consistency of the energy dual pricing system with the WTO agreement on anti-dumping. Glob. Trade Cust. J. 4(1), 313–323 (2009)

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Correspondence to Philippe De Baere.

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This article is based on a contribution given at the ERA conference Introduction to WTO and EU Trade Law which took place on 23–24 May 2013 in Trier.

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De Baere, P. Article 2(5) of the Basic Regulation and the adjustment of production costs in the light of the Anti-Dumping Agreement. ERA Forum 15, 531–546 (2014). https://doi.org/10.1007/s12027-014-0361-0

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