Antidumping Update

The AD525 case was discussed by the EU Antidumping Committee on 25 November but a final decision was not taken. This decision is now expected to be made at the scheduled meeting of the committee, which takes place on 3 December. The final decision requires a simple majority of 14 out of the 27 member states. There are unconfirmed reports that eight countries expressed opposition to the Commission’s proposal at the 25 November meeting.Strongly divided reactions to dramatic antidumping proposal

Thursday 20th November

European fastener importers and many of their customers are expressing deep shock at news that the European Commission has proposed the imposition of antidumping duties of up to 87.3% on a wide range of fasteners imported from the People’s Republic of China. For some European manufacturers, though, the application of duties could represent a vital lifeline as order books dry up and trading conditions get bleaker by the day. One Italian producer commented, “orders coming back from Asia right now would be like a fresh air in such desperate times”.

The application is not, at this stage, by any means certain. The Commission’s 45-page proposal document was issued to member states in the first week of November in preparation for a meeting of the EU Antidumping Committee scheduled for 25 November. The committee comprises representatives from the trade ministries of all EU member states. A majority decision will determine whether the Commission’s proposal is confirmed by the Council of Ministers, following which a Council Regulation, translated to all 23 official EU languages, would be published in the EU Official Journal. Usually tariffs are effective immediately from this date of publication. The deadline for announcement of a definitive decision in the AD525 case is 8 February 2009, although there is nothing to prevent earlier publication of the decision. Some member states are known to be minded to oppose the Commission’s proposal, presumably influenced by some political leaders strictures against protectionism at the recent G20 conference.

The proposal was also sent to ‘interested parties’ registered with the investigation, including fastener trade associations across Europe and representatives of Chinese fastener manufacturer associations. Despite disclosure restrictions the proposal document is in widespread circulation throughout European and Asian fastener industries.

Association members have benefited from briefings on the proposals and their potential implications. General awareness across the European fastener industry, though, is mixed and there is clear evidence of significant levels of misinterpretation. 

Distributor associations, and other opponents of antidumping measures, have rapidly assembling last minute arguments and comments aimed particularly at influencing delegates to the critical Antidumping Committee meeting.

Neither the EIFI, representing European manufacturers and responsible for presenting the antidumping complaint originally, nor EFDA, representing European distributor associations, has yet issued a statement regarding the Commission’s proposals.

The Jiaxing Association of Iron and Steel Fastener Companies, representing 20% of Chinese exports of fasteners, expressed annoyance to Reuters that two European companies are likely to have secured exemption from the duties for their Chinese businesses. Jiaxing’s legal representative in Brussels highlighted “the question of the fairness of two European manufacturers asking for protection ... when their own Chinese subsidiaries get total exemption from the duties through the back door."

The Commission has proposed a tariff level of 78% for around 100 Chinese factories that cooperated with the investigation and a range of specific tariffs for a smaller number of companies that obtained individual treatment. For most proposed tariffs range between 62 and 82%, but for two European financed manufacturing ventures in China the proposed level is 0%.

General reactions from importers reflected horror at potential tariff levels far exceeding their worst expectations. Many predict serious short-term disruption in supply to European industry, arguing that, contrary to the Commission’s belief, most European manufacturers do not have the practical capacity or willingness to meet demand for all of the products involved in the case.

Substantial cost increases are also predicted for fasteners across the board. Prices from alternative Asian sources are already reported to be hardening as outstanding orders on Chinese factories are cancelled and resourced.

One major UK wholesaler estimates that tariffs, if applied, would add to over 70% price inflation in the last year driven by raw material increases and currency effects. In a highly charged letter to UK and European politicians, a smaller UK importer is far more emotive in speaking of “fear for our survival as a business”.

The provisions of the 1996 Antidumping Regulation prevent this magazine from providing a detailed analysis of the Commission’s proposal at this stage. As we are able to bring more news it will be published in the News section of www.fastenerfair.com and mailed to those registered to receive our breaking news email alerts.