Abstract
This Chapter is about dumping from China. It shows the peculiarities of dealing with a non-market economy and the problems an industry incurs when it tries to tackle the serious economic and political problems encountered in trade with China. China is treated as non-market economy, which from its perspective implies a worse treatment. (Non-market economies are Azerbaijan, Belarus, North Korea, Tajikistan, Turkmenistan, and Uzbekistan; and countries considered as economies in transition include Albania, Armenia, China, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Mongolia and Vietnam. In terms of economic performance, but with less clout, Vietnam is copying China.) This is not necessarily correct. Criminal behaviour and fraud by Chinese exporters appeared matchless. The dumping affair of Chinese energy saving lamps was one of the most bizarre examples of political blackmail, interference, irregularities, European producers discord, European Commission arbitrariness, biased decision making and internal European Commission competence struggles ever, resulting in a weird compromise giving the idea to the Chinese that, henceforth, they had a free rein in trade policy.
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Notes
- 1.
UPI.com, 7 November 2011, http://www.upi.com/Business_News/Energy-Resources/2011/11/07/China-plans-switch-to-energy-saving-lights/UPI-10351320683681/#ixzz1eKOM2wqD. This coercive policy does not differ from the European Community policy, which also – in response to the lobby of some major producers – imposed energy saving lamps on the population, violating market freedom principles and consumer choice.
- 2.
IAEEL News letter February 2000.
- 3.
These real data in indices are from legal practice in various anti-dumping cases. One of the companies in this Table received Market Economy Status in the European Community case and the other received Market Economy Status in a third country proceeding concerning energy saving lamps toward China.
- 4.
The prices of 137 and 130 in China and the European Community respectively concern similar lamps with similar quality. The three companies had market economy status in different anti-dumping cases.
- 5.
This subsidiary in China, Philips & Yaming, made a mistake to its advantage. It reported about its SL prismatic lamps that it had a lifetime of between 6,000 and 10,000 h instead of 10,000 h or more. This mistake caused that the undercutting found was less than the undercutting applied if the lifetime had correctly been applied. The undercutting, which was its anti-dumping duty, of 32.3 %.
- 6.
Beijing Youth Daily 23 December 2000: “Philips draws out all of a sudden?”
- 7.
Commission Regulation (EC) No 255/2001 of 7 February 2001 imposing a provisional anti dumping duty on imports of integrated electronic compact fluorescent lamps (CFL i) originating in the People’s Republic of China, Official Journal of the European Communities, L 38/8, 8.2.2001.
- 8.
Commission Regulation (EC) No 255/2001, recital 89.
- 9.
Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community; Revision with Council Regulation (EC) No 461/2004 of 8 March 2004 amending Regulation (EC) No 384/96 on protection against dumped imports from countries not members of the European Community and Regulation (EC) No 2026/97 on protection against subsidised imports from countries not members of the European Community Official Journal of the European Union 13.3.2004, L 77/12 or OJ L 343/51 of 22.12.2009 09113002 Council Regulation (EC) No 1225/2009 of 30 November 2009 codified AD 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).
- 10.
Notice of Initiation OJ C 244 of 10.10.2002.
- 11.
Commission Decision of 9 March 2004 terminating the reinvestigation pursuant to Article 12 of Council Regulation (EC) No 384/96 (the Basic Regulation).
- 12.
Reformatorisch Dagblad, 30 June 2006. The prosecutor demanded an unconditional prison sentence of two years. The court sentenced him to 240 h community service.
- 13.
Nobody investigated or verified whether this Joint Venture or Yankon produced the lamps imported by Philips. If it were the joint venture, Philips should pay the residual duty for this new company of 66.1 % instead of the duty for Yankon of 35.3 %.
- 14.
OLAF/06/21 Brussels, 4 December 2006; Cologne: Press release, Zollkriminalamt, 4 December 2006.
- 15.
Article 13 of the Basic Regulation, Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community; Revision with Council Regulation (EC) No 461/2004 of 8 March 2004 amending Regulation (EC) No 384/96 on protection against dumped imports from countries not members of the European Community and Regulation (EC) No 2026/97 on protection against subsidised imports from countries not members of the European Community Official Journal of the European Union 13.3.2004, L 77/12 or OJ L 343/51 of 22.12.2009 09113002 Council Regulation (EC) No 1225/2009 of 30 November 2009 codified AD 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).
- 16.
The adventures of various exporters are sketched. Cooperation of governmental institutions and Chamber of Commerce with fraudulent exporters was in some cases found. Section 15.5 shows the cost of the cooperation of a company of the Vietnamese Ministry of Trade. The higher cost of Thai origin is attributable to the cost of bribing some employees of Chambers of Commerce in third countries for false origin certificates.
- 17.
The Basic Regulation: Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports, OJ L 343/51 of 22 December 2009 (codified), Article 11, Duration, reviews and refunds, of Council Regulation. In Chap. 14 is reported that, because the European Commission had made a compromise and a promise, the duration for fax machines was 2 years only. Expiry and interim reviews were mixed up.
- 18.
Power point presentation of Kai den Daas, COO of Philips Lighting, Financial Analysts Meeting, 7 December 2005: “Building on strength in existing businesses. - Shaping the future in new business areas.”
- 19.
Philips Lighting: Follow-Up Submission to the Hearing on 11 January 2007, Version for Inspection by Interested Parties.
- 20.
Notice of initiation of an expiry review of the antidumping measures applicable to imports of integrated electronic compact fluorescent lamps (CFL-i) originating in the People’s Republic of China (2006/C 167/04), OJ C 167/13 of 19.7.2006.
- 21.
The Basic Regulation: Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports, OJ L 343/51 of 22 December 2009 (codified), Article, 5 Initiation of proceedings, 4.
- 22.
If it is supported by 25 % or more of the volume of production of the “like product” and not more than 50 % opposes the complaint.
- 23.
Article 4.1.a. of the Basic Regulation. According to Article 4.1.b exceptions do also exist in the case of regional markets, which need not be discussed here, exceptional as they are.
- 24.
Müller et al. (1998), pp. 243–244. In following footnotes, their references are given.
- 25.
OJ No L 80, 24.3.94, p. 1 (recital 22) – potassium chloride from Belarus, Russia and Ukraine/review; OJ No L 157, 29.6.93, p. 76 (recital 12) – electronic typewriters from Japan/review; OJ No L 95, 21.4.93, p. 5 (recital 40) – magnetic disks from Japan, Taiwan and P.R. China/provisional.
- 26.
OJ No L 54, 24.2.87, p. 12 (recital 62) – plain paper photocopiers from Japan/definitive.
- 27.
Case C-69/89 Nakajima All Precision Co. Ltd. v. Council [1991] ECR 1–2069 (paragraphs 81 and 82).
- 28.
Same source as previous footnote.
- 29.
See also Müller et al. (1998), pp. 237–254.
- 30.
Quoted in Antidumping and Competition: The Case of China by Hang Zeng, August 2005, from a press release of Philips China on 22 December 2000, in “Philips turan chechu oumeng fanqingxiao diaocha (Philips Withdraws from The E.U. Antidumping Investigation)”, Beijing qingnian bao (Beijing Youth), 23 December 2000.
- 31.
Letter H.6/TO D (2007) 602 of 19 January 2007 from the Commission to the industry association.
- 32.
Letter of 26 November 2006, signed by Csaba Kuhne, Product Line Manager GE Hungary.”
- 33.
SLI Lighting Ltd Position Paper – European Commission Expiry Review of anti-dumping measures applicable to integrated electronic compact fluorescent lamps (CFL-i) originating in the People’s Republic of China, of 19 December 2006.
- 34.
GLOBAL EUROPE, European Commission External Trade Europe’s Trade Defence Instruments in a Changing Global Economy, A Green Paper.
- 35.
It is incomprehensible that a politician, who was transferred from London to Brussels after the conduct of his financial affairs was criticised, can so deliberately cross lines of law without any check and balances. Even the threat to challenge such practices in Parliament or in court would not have had the slightest effect on the acts of a Commissioner for whom rules of European Community law were apparently irrelevant.
- 36.
The illogical methodology of the European Commission is repeated in these allegations. If the comparisons are not made on the basis of model per model, statements on keeping value are meaningless. If heavily dumped products are imported and these did heavily undercut European prices, the value is destroyed on the side of the European producers, but is presented as value creation because the prices of remaining European products are relatively higher than those of Chinese imported product.
- 37.
Article 24 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code, OJ L 302, 19/10/1992 pp. 1–50, Document 392R2913.
- 38.
In colour television picture tubes from the People’s Republic of China (PRC), the Republic of Korea, Malaysia and Thailand, the case was closed on the basis of arguments found in the Financial Times of 20 January 2006. The Commission alleged to have conducted market research, but the data were those from a newspaper and some arguments advanced by LGPhilips Displays (LGPD), which this company borrowed from the same newspaper article. This joint venture of LG and Philips for cathode ray tubes wanted to close all its factories in Europe and move to China, a move that would be difficult if the dumping from China was countered with measures. The Financial Times referred in the article on which both LGPD and the European Commission based their wisdom to a study made by GfK. But GfK denied existence of this study. The European Commission concluded in recital 108 of its disclosure document that it had obtained information from market intelligence: “As an example, flat panel TV sets accounted for 63 % of the total value of all retail TVs bought in the UK in 2005, compared with just 37 % for 2004. Both the result of this investigation and information obtained from market intelligence suggest that the sales volume of CPT TVs peaked in the EU in 2004, and that the drop in demand is sustained since then.” It was deception by the Commission and, consequently, the institutions. LG. Philips wrote on 21 March 2006 a submission in which it referred to the same inexistent piece of market research: “Flat screen CTVs accounted for 63 % of the total value of all retail TVs bought in the UK in 2005, compared with just 37 % for 2004 [footnote 7: GfK, reported in the Financial Times 20 January 2006.]”. Commissioner Mandelson appeared to have read a newspaper and forced his officials to violate normal anti-dumping practice and the truth and pretend to conduct market research for the sake of closing a case. The European Commission did not even check the information nor did it pay any attention to correct information from GfK studies.
- 39.
http://www.wwf.eu/climate/news_climate/?112120/EU-keeps-unfair-market-barriers-on-energy-saving-lamp: “EU keeps unfair market barriers on energy-saving lamps”, Posted on 29 August 2007.
- 40.
Matt Pottinger, Steve Stecklow, John J. Fialka in The Wall Street Journal, 20 December 2004: “China is already believed to be the world’s largest source of non-natural emissions of mercury. Jozef Pacyna, director of the Center for Ecological Economics at the Norwegian Institute for Air Research, calculates that China, largely because of its coal combustion, spews 600 t of mercury into the air each year, accounting for nearly a quarter of the world’s non-natural emissions. And the volume is rising at a time when North American and European mercury pollution is dropping. The U.S. emitted about 120 t of mercury into the air in 1999 from manmade sources. Chinese power plants currently under construction – the majority fuelled by coal – will alone have more than twice the entire electricity-generating capacity of the U.K.”
- 41.
United Press International, 7 November 2011: “China plans switch to energy-saving lights”.
- 42.
du Pont (2006); US AID: “Quality Control and Market Supervision of CFLs in China”. Figures on production and exports are from the industry federation CALI.
- 43.
Frederick Weston (2007).
- 44.
References
du Pont P (2006) Reducing barriers to market transformation: from low quality to high performance and high efficiency. Efficient lighting initiative, US AID: “quality control and market supervision of CFLs in China”
Müller W, Khan N, Neumann HA (1998) EC anti-dumping law – a commentary on regulation 384/96. Wiley, Chichester
Weston F (2007) China’s energy challenges. In: Symposium China in Transition Environmental Challenges in the Far East, The Regulatory Assistance Project, Montpelier
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van Marion, M. (2014). Dark Practices in Lighting. In: International Trade Policy and European Industry. Contributions to Economics. Springer, Heidelberg. https://doi.org/10.1007/978-3-319-00392-4_15
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