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Europe imposes higher anti-dumping duties on hot-rolled flat steel from China

The European Commission is to impose anti-dumping duties on imports of hot-rolled flat steel products from China, at a higher rate than provisional duties that have been in place since October 2016.07 Apr 2017

A Commission investigation showed that these products have been sold in Europe at "heavily dumped prices", it said.

The new duties will range from 18.1% to 35.9%, an increase from the 13.2% to 22.6% that was provisionally imposed, the Commission said.

"These measures will shield the EU steel producers from the damaging effects of Chinese dumping during an initial period of five years," it said.

Hot-rolled flat steel is used for the production of steel tubes to be used in construction, and for shipbuilding, gas containers, cars, pressure vessels, and energy pipelines, the Commission said.

"The EU currently has an unprecedented number of trade defence measures in place targeting unfair exports of steel products from third countries, with a total of 41 anti-dumping and anti-subsidy measures, 18 of which on products originating from China. The Commission has been using the available toolbox of trade defence instruments to the full extent possible, while seeking the approval of member states and the European Parliament for its proposals to make these instruments better suited to the current reality of international trade," it said.

The EU is also tackling overcapacity in the global steel industry through involvement in a Global Forum on Steel Excess Capacity that was launched last December and through bilateral dialogue with partners, the Commission said.

Wang Hejun, head of the Chinese Ministry of Commerce's trade remedy and investigation bureau, said in a statement that the EU had continued to use an "unfair and unreasonable 'surrogate country approach' in the investigation, which resulted in artificially-determined high anti-dumping duties for Chinese products and thus seriously undermined Chinese enterprises' interests", state-owned news agency Xinhua reported.

Wang said that the EU's conclusion "lacks factual grounds", Xinhua said. China will take the "necessary measures to protect the interests of Chinese enterprises", it said.

Competition expert Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com said: "The case highlights the importance of trade measures to stop dumping of products. Once the UK leaves the EU it will need to have in place its own capability for investigating and sanctioning dumping, or risk a significant exposure post-Brexit to below cost imports. In any event, there may be a lacuna in coverage from the day of Brexit because the UK could only impose countervailing duties against imports which the UK had found are being dumped and causing injury to UK producers, which will take time to establish."

The European Commission announced in January that it would extend the anti-dumping measures for a further five years, in response to a request lodged by the Association of European Wheels Manufacturers on behalf of producers representing more than 25% of the total EU production of the aluminium wheels.

The EU proposed changes to anti-dumping legislation in November 2016, including a new calculation method that it said would ensure the EU's trade defence measures are able to deal with overcapacity in world markets.

Under current rules, in normal market circumstances dumping is calculated by comparing the export price of a product to the EU with the domestic prices or costs of the product in the exporting country.

This approach will now be complemented by a new, country-neutral methodology that will apply in the same way to all World Trade Organisation (WTO) members and will take into account any significant distortions in countries due to state influence in their economy, the Commission said.

WTO members will no longer be part of a list of countries subject to the current "analogue country" methodology. Under the analogue country method, an investigation that is not able to gather credible data from a non-market economy is required to use a country in which the general capacity and type of production closely approximates that of the investigated country. The intention is to allow investigators to model the costs of production in the investigated country as if that country operated on market economy conditions. This approach will now be reserved for non-market economy countries that are not members of the WTO, the Commission said.

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