Anti-‐dumping as protectionism in times
of crisis
A case study on Industry filing and country support in
the Council of Ministers
Table of Contents
Introduction ... 3
Background and need for research ... 3
Purpose and scope ... 4
Research question and sub-‐questions ... 5
Hypothesis ... 8
The Research ... 9
The case studies ... 11
1 Legislation and protectionism in times of crisis ... 14
1.1 Introduction ... 14
1.2 The WTO anti-‐dumping Regulations ... 16
1.3 EU Antidumping Legislation ... 19
1.4 The EU’s Decision-‐making process ... 24
1.5 Protectionism and the crisis ... 26
1.6 Protectionism and crisis theory ... 27
1.7 Conclusion ... 31
2 Sectors resort to AD in times of crisis ... 33
2.1 Crisis in General ... 33
2.2 The Shoe Case ... 37
2.3 The Steel Fasteners case ... 47
2.4 The member states steel fasteners industry during the crisis ... 53
2.5 Conclusion ... 55
3 Support for the home industry via the Council of Ministers ... 57
3.1 The leather shoe industry country specified ... 58
3.2 The member states steel fasteners industry ... 60
3.3 General voting behaviour ... 61
3.4 Estimations on the shoe case ... 62
3.5 Outcome of the shoe case ... 64
3.6 Estimations on the steel fasteners case ... 66
3.7 Outcome of the steel fasteners case ... 68
3.8 The two cases compared ... 69
3.9 Conclusion ... 69
4 Conclusion ... 71
4.2 Limitations ... 73
4.3 Future research ... 74
Introduction
Background and need for research
Many commentators, from economic and political scholars to NGO’s, have expressed the concern that the current financial crisis may result in the rise of commercial protectionism (Bown 2009, 1-5, Vandenbussche 2010,760, World Bank 2009, WTO 2009). Especially the use of anti-dumping (AD) measures by World Trade Organization (WTO) members is on the rise due to the lack of other options to protect the own market within the WTO ‘s system of free trade. Remarkably, the reduction of tariffs directly resulted in the instalment of anti-dumping laws within developed and developing countries (Zanardi 2004, Vandenbussche 2010). Therefore, scholars argue that anti-dumping investigations are more and more used as a replacement for tariffs and other market protecting instruments (Ahren 2010, 1-10, Cheng 2001, 640-643). Since the beginning of the crisis in 2008 many scholars and organizations have spent time and effort to investigate if any change occurred in the use of anti-dumping measures due to the crisis. Research by Bown has proven that the crisis indeed provoked an increased use of anti-dumping duties (2009). Konings and Vandenbussche show the effects of anti-dumping as a form of protectionism on the European market by looking at export
numbers that decline and the failing of the market due to government interference. (Konings 2009,Vandenbussche 2011).
Setting steps into this world of anti-dumping feels like opening up a Pandora’s box of information. Almost any kind of research has already been performed. Especially on the discriminative nature of the Market economy treatment system of anti-dumping many papers are there to be found (Cadott 2007, Bown 2007, Bown 2009, Chu 2004, Zeng 2005). Another niche is the research on protectionism under the WTO system. With the minimization of tariffs, there are not many ways left to protect your own market. Many authors therefore argue that AD measures have replaced the old tariffs as the best form of protectionism (Bown 2009, Kee 2010, Cheng 2001, Neufeld 2001, Prusa 2001). Most of these articles tend to link this form of protectionism to the current economic crisis and show that the number of AD cases has climbed compared to the period before the beginning of the crisis (Bown 2009, Vandenbussche 2011). Other authors link these outcomes to courses of trade to show how the market equilibrium is being disturbed by anti-dumping cases (Park 2009).
would be short sighted to walk by the special features and virtues of each member state. Treating EU member states thus as singular countries could clearly add to the current literature on AD within the EU. One of these special features is the above-described fact that some states more often oppose anti-dumping duties than others. For instance countries as the Netherlands, Finland, Sweden and Denmark hardly vote in favour of an anti-dumping duty while countries like Portugal, France and Italy hardly oppose any duties (Evenett 2005, 711-4).
Purpose and scope
Within the studies on the effects of the crisis on AD, the European Union (EU) is mostly perceived as a unitary actor. This thesis will point out why looking at the EU, as a unitary actor in the light of the crisis tends to create overly generalized outcomes. Within this “ever closer union”, many economic differences exist. The Eurozone certainly has not suffered a single common fate. Nevertheless, the complete Union has to cope with the problems that some of the members face. This thesis will mainly look at the differences in the way the economic crisis has hit individual EU countries and sectors of industry and will link this variance to the general resort to anti-dumping measures as a way of protectionism. Looking at the spread of the economic crisis within the EU, one could state that especially the eastern states, Ireland, Cyprus and the Mediterranean states suffered most from the crisis
(Europäische Kommission 2008, Jones 2010, 35-37). On the other hand, every EU member had to cope with lower sales rates, less exports and a weak financial market, creating a general incentive to protect their own market by the use of trade policies (Kee 2010, 2, Sudsawasd: 2012).
an anti-dumping case than industries that are faring relatively well. Industries that fare well do not necessarily need to protect their own market against cheap imports while industries affected by the crisis cannot fight against the cheap imports from China. Linking the outcomes of this research to the outcome of the country-specific research on voting in the Council would give new explanations on differences in AD preferences within the EU. Regarding the case studies for this research, it is interesting to make use of cases in which the countries that mostly oppose AD duties as well as the ones that are in favour of AD duties have a clear interest c.q. having petitioning firms stemming from these countries of origin. Two important AD investigations by the European Commission against Chinese imports seem to fulfil these conditions. Both in the case of “Anti-Dumping Measures on Certain Stainless Steel Fasteners or part thereof from China” and the AD case on leather shoes from China and Vietnam countries from both opposing as well as supporting member states can be linked to the industries. Regarding the time of initiation of the two cases it is important that both cases both have been initiated before the crisis. The case on leather shoes was firstly initiated in July 2005 and extended on request during the crisis in October 2008. The steel fasteners case was firstly initiated in October 2004 and again initiated on the 9th of November
2007. This time span makes it possible to compare the situation before and during the crisis for both cases. Both cases target China as the main dumping exporter. I chose to take China as the leading subject of the case studies due to the fact that China has a special status within the anti-dumping system. Of all cases initiated, China is one of the targets in 63% (Bown 2009). The special features of the Chinese industry, like for instance cheap labour on the one hand and qualitatively comparable product to the European market on the other hand, creates a special threat to the European market. Therefore, choosing China as the targeted country within the case studies is ideal when it comes to the finding of protectionism due to the crisis. Especially, because for both industries before the starting of the free market, quotas were in place that protected the market. This fact indicates that the European producers market needed protection from the cheap imports from China. This point makes it possible to investigate if this need for protection altered due to the crisis. Therefore, thesis will use these two cases for the research.
Research question and sub-‐questions
The research will look at one of the possible reasons why AD cases are being filed in the EU against China. To do this it is necessary to investigate in what way the economic crisis changed the use of anti-dumping measures within the EU. Because of the fact that this thesis wants to investigate various aspects of anti-dumping policy, namely the effect of the
Ministers on filing a duty, it is necessary to come up with a broad research question that manages to cover both subjects. Therefore the research question will be: How does the economic crisis, from 2008 up to 2010, affect the use of AD by the leather shoe and steel fasteners industry within the EU and to what extend do we see these industries being supported by member states within the Council of Ministers?
To answer this question it is necessary to come up with some clear sub-questions that can give line and direction to the research. A complete research on all the sectors, their dealing with the crisis and the use of AD measures, as a form of protectionism to deal with the crisis would turn out too extensive. Therefore, I have chosen to make use of two clear case studies, the steel fasteners case and the shoe case. Both studies present a different sector that was differently affected by the crisis. This could result in different outcomes on the use of AD filings as a way of protectionism between the two case studies. The case studies will be guided by the following sub-questions:
The first sub-question is; Can AD be considered a protectionist measure for the EU, and if so what does this imply for its use in times of economic crisis?
To answer this question, the first chapter will provide an overview of the current literature on AD in relation to protectionism and AD related to the crisis. To make this literature review understandable, as well as to provide the reader with some basic knowledge on the AD procedures an overview of the WTO and EU’s AD regulation will be presented. Furthermore, background information on the market economy treatment (MET) principle of EU law will be provided to create a better understanding of the special situation of China within the AD system. This special situation arguably results in potential abuses of the EU system for means of protectionism. Therefore, the first chapter will also look into the use of AD during times of crisis to see if AD potentially is being used as a protectionist measures during economic downturn.. Lastly, a short introduction to the chosen case studies will be given to make the discussion in the second and third chapter understandable and to create a link between the research and the theoretical part.
The second sub-question is: To what extend do the specific effects of the crisis on certain sectors increase the incentive to file an AD case against China by this sector? Focusing on the steel fasteners and leather shoe case?
sectors where hit by the crises and which sectors fared relatively well. These two paragraphs are necessary to see clear differences between sectors that are based in different countries. It would be possible that, for instance a shoe company in Italy felt much more impact of the crisis than one in Spain. This difference between the sectors in different countries creates different incentives for the use of the EU’s anti-dumping system.
Moreover, focusing on the chosen case studies on the basis of the former information, the effects of the crisis on the leather shoe and steel fastener sector in particular will be elaborated upon. To clarify the situations of the two cases, the third paragraph will firstly give
background information on the leather shoe case. Furthermore, information on the
investigation will be dealt with in this paragraph. The second part of this paragraph will focus on the effects of the crisis on the EU’s leather shoe industry and will take a look at country specific performance of this sector. After this, the fourth paragraph will perform the same research but then for the steel fasteners case. This paragraph will thus also be divided in a part giving background information on the steel fasteners case and a part on the influence of the crisis on the steel fasteners industry in the EU.
The third sub-question is: To what extent does the size and economic influence of a petitioning sector within a country influence the way the national government will vote in Favour or against an AD measure within the Council of Ministers?
This question is closely related to the former. The basic idea behind the question is the presumption that, if AD can be used as a form of protectionism of a country’s industry: the home country of this industry might be willing to support definite measures by voting in favour of these measures within the Council of Ministers. To answer this question it is first necessary to give a clear overview of the spread of the chosen industry in the EU and its economic value. The market share within a country does of course influence how high the stakes of an anti-dumping investigation can be for a certain country. Building further on the example of the shoe case with a market suffering from the crisis, it would be reasonable to say that Italy logically has a larger shoe industry than for instance Belgium and therefore would have more incentive to vote in favour of a definite duty. This sub-question will thus mainly deal with the voting behaviour of the EU countries in the Council of Ministers. The Council of Ministers has the right to vote with simple majority over the instalment of definite duties, extending a definitive dumping duty to new countries, terminating an
duties (van Bael 2011, 23-5). If the Council of Ministers votes in favour of definite duties, the Council will have 15 months to install these duties and make them definite. For the sake of the research it is necessary to use a case in which the voting behaviour of the Council of Ministers is publically accessible. Although this should always be the case, in reality this unfortunately is not. Fortunately, it was possible to derive the outcomes directly from the Council.
For answering this question it might be necessary to give an overview of the general voting behaviour of member states in the Council of Ministers. Some states for instance tend to be generally opposed to anti-dumping protection and therefore have more chance to vote against a definite duty regardless of their interest (Nielsen 2012, 205).
Hypothesis
To give some direction to the research it will be based on two basic hypotheses related to the research question. The first argument is: Sectors that are hit relatively hard by the crisis are likely to file more initiations than sectors that fare relatively well. The basic idea behind this argument is that petitioning firms can use anti-dumping measures as a new form of protectionism in the absence of tariffs. Therefore, it would be logical to state that countries and sectors that are hit harder by the crisis have more incentive to file cases against China to protect their own market than sectors that are less affected. Nevertheless, accosting research that links the economic crisis to the resort to anti-dumping does not come up with a clear answer. Some scholars do find a clear correlation (Fritz 2009, Bown 2009) but others only find a low fluctuation, that on its own is not really pointing to a protectionism spree, and show in what way the crisis influenced the use of AD measures (Vandenbussche 2010). To find out whether my first hypothesis has any validity: a thorough literature review on AD during times of crisis should be performed. Furthermore, it is necessary to look into primary sources to find proof for the argument made. This thesis will deal with this task by
performing two case studies to verify if this hypothesis is right.
The second hypothesis of this research will be: The more important an industry in a member state is for this specific member state, the more likely it is that this state will promote AD duties in the Council and thus will vote in Favour.
specialization to the case studies we find that the textiles and shoes industry tends to be very specialized with only a low number of countries having a large shoe industry while steel fasteners and other metal products show to be more dispersed (Midelfart-Knarvik 2002, 474). This difference will also result in divergent importance of an industry for a certain member state. The hypothesis thus predicts that the importance of the industry will be closely related to the incentive of promoting AD duties in the Council. Therefore, differences are there to be found between the steel fasteners and shoe case.
The Research
The overview of the research will start with chapter one. The first chapter of this thesis will form the framework for the research by providing background information on the legislative system of the anti-dumping process. The chapter will start off with an elaborate explanation of both the WTO and the EU’s anti-dumping legislation in section 1.2 and 1.3. The focus will be on the legislation of the EU in section 1.3. explanation of the EU legislation is necessary to investigate whether the legislation gives possibilities for protectionism. This part will first describe the formal investigation process as well as the finding of dumping. After this a specific feature of the AD system regarding Non-market economies will be explained in section 1.3.2 and 1.3.3 Subsequently, the chapter will focus on the EU decision-making process in section 1.4. The focus of this part on EU decision-making will be on the voting in the Council of Ministers. Getting insights on the voting procedures and the influence of member-states in the AD process is necessary to understand the third chapter on voting in the council of ministers. Therefore, this section will go over both the features as well as the political sentiment of this voting process. In section 1.5 and 1.6 a theoretical literature overview will be presented that will shed a light on the use of the AD system during times of crisis as described in the current literature. It will also investigate whether AD in general is, and can be used as a protectionist measure and if countries indeed resort to this protectionism. The next step in the research will be to give an overview of the sectors within the two case studies. The focus of this overview needs to be on how the specific sectors in the case study are affected by the crisis. It is thus necessary to show a clear overview of economic
performance of the sectors from just before the crisis, that is 2007 up to 2010. The
EU countries in section 2.1. it will then take a specific look at the way in which the individual sectors are hit by the crisis. Because of the focus on the two cases from the case study, from here the investigation will shed its light on the case studies only. Section 2.2 will dig into the shoe case. This part will first explain the facets of the investigations in 2.2.1. After this the product concerned and the process of the determining of the normal value and the analogue country in the shoe case will be elaborated upon in section 2.2.3 this is necessary to obtain a better understanding of the process of AD and the way in which these facets create
possibilities for protectionism. The sectorial discussion will be extended by section 2.2.4 and 2.2.5 that will have a closer look at the leather shoe industry to see what damage the crisis has done to the sector as a whole. In line with the basic idea behind the thesis, these two sections will also look at the performance of individual countries. After the discussion on the shoe case the investigation will go further with the steel fasteners case in section 2.3. This section will follow the same order as the shoe case and will finally come up with an overview of the sector and the way in which this sector suffered from the crisis. Section 2.4 will than
investigate the incentives of the steel fasteners sector in the separate member states to see if the crisis indeed could have been the driving force behind the filing of the investigation. The following step of the research is to show the importance of the sectors in the case studies in each member state. Giving a summary of this makes it possible to draw predictions on the basis of our hypotheses. The basic idea is that the more important an industry is for a certain country, the more likely it is that the country in case would vote in such a way that would help this industry. For a filling country that is heavily affected by the crisis this would thus mean voting in Favour of definite duties on the competing exporters from China. Chapter 3 starts of with the task of determining the importance of an industry for the member states in section 3.1 and 3.2. Data derived from this investigation will be linked to general voting behaviour of these countries in the Council of Ministers in section 3.3.
section 3.8 will compare the outcomes of section 3.5 and 3.7 with each other to look for similarities and to find if the estimations on the basis of the hypotheses can be denoted true or false.
One of the goals of this research is to address the gaps in the literature, which if filled, will improve our understanding of anti-dumping in relation to the crisis as well as the process of voting in the Council of Ministers connected to AD policy making. This theory testing approach follows four stages, which will be described below.
The literature review will try to strengthen the position of the research within the current literature. Room will be reserved to show the strengths as well as the weaknesses in the current literature. Furthermore, it will give a necessary overview of the AD policies of the EU as well as its process from filing up to the point of an imposition of a final duty.
In the conclusion the theoretical and practical implementation and the eventual findings of the study will be discussed. Answer to the research question will be provided in this part.
Theoretical and empirical findings from the current literature will be combined with the findings of this research to show how the research ads up to the academic discussion. Furthermore the limitations for the research will come to the fore.
The case studies
This research will make use of two cases that will form the empirical basis of the research. The two cases that this thesis will use are the Chinese shoe case and the steel fasteners case. Steel fasteners are basically screws, bolts and nails that are being used for white goods, cars and other machinery. These two cases form ideal case studies because they represent two totally different markets with different producers as well as different scopes of production. Furthermore production values for both products can be found at Eurostat’s. This makes it possible to estimate how the crisis affected the shoe and steel fasteners market. Giving an overview of the total production value and its exports during and before the crisis can make this estimate. Another reason why they could form proper case studies is the fact that both studies have been extended over time. Making it possible to see if there are any differences in the field of Council voting.
investigation will be done in section 2.3. in these sections the differences between the industries in different EU countries will be presented to see how these industries dealt with the crisis.
This data on the crisis will be used in chapter 3 to make estimations on the voting of
individual member states in the Council of Ministers regarding AD measures. To make these estimations it is first necessary to look at the importance of the specific industry for the individual countries. This task will be performed in section 3.1 for the shoe case and 3.2 for the steel fasteners case. Furthermore, differences between the countries regarding their voting behaviour will be taken into account in section 3.3 when it comes to estimating the outcomes of the voting session in the council. Section 3.4 and 3.6 will show the estimations on the basis of the hypothesis. Section 3.5 and 3.7 will then look at the real outcomes of the Council vote and will compare them with the estimations to see if the hypotheses have any validity. Section 3.8 will lastly compare the outcomes of both investigations to double check the predicting value of the hypotheses.
The Steel Fasteners case study has been chosen because it is important to have a completely different situation regarding the way it is affected by the crisis and the way the industry is distributed between member states. This creates a possibility to double test the hypothesis in two different settings. The hypothesis thus will create different expectations on the outcomes. Comparing the outcomes and conclusions of this second case to the ones of the first case can give better insights on the validity of the hypotheses. The two cases selected seem to differ enough on the basis of filing companies and their origin as well as the way in which these economies are affected by the crisis.
The importance of the industry for the country in this research is perceived as more important for the estimation that the crisis outcome. This reasoning can be explained because a very small sector performing badly in a country that is performing badly in general, due to the crisis, less likely will protect the relatively small market. Therefore, voting in favour according to our hypothesis will be based on other features than the performance and importance of the sector alone. If for instance interest where divided all over Europe due to competition between importers and producers than this would of course create more spread between the outcomes than in a case where the importing sector is less competitive. Therefore, the voting estimations will be different than the ones in this overview.
1 Legislation and protectionism in times of crisis
The first chapter of this thesis will form the framework for the research by providing background information on the legislative system of the anti-dumping process. This chapter will try to answer the first sub-question on the basis of a literature review. The research question is: Can AD be considered a protectionist measure for the EU, and if so what does this imply for its use in times of economic crisis? To answer this question, the thesis will start off with an elaborate explanation of both the WTO and the EU’s anti-dumping legislation in section 1.2 and 1.3. The focus will be on the legislation of the EU in section 1.3 because this is the most important for this thesis. This part will first describe the formal investigation process as well as the finding of dumping. After this a specific feature of the AD system regarding Non-market economies will be explained in section 1.3.2 and 1.3.3
Subsequently, the chapter will focus on the EU decision-making process in section 1.4. The focus of this part will be on the voting in the Council of Ministers in part 1.4.1 to install definite duties. This section will go over both the features as well as the political sentiment of this voting process. The last sections 1.5 and 1.6 will present a theoretical literature overview that will shed a light on the use of the AD system during times of crisis. It will also
investigate whether AD in general is, and can be used as a protectionist measure. The chapter will round up with a short conclusion.
1.1 Introduction
More than 60 years have passed since the signing of the General Agreement on Tariffs and Trade that set the first steps towards a global free market. These first steps have created a trading world full of trading rules and rights. With the foundation of the WTO, member states devoted themselves to a large set of rules regarding the liberalization of trade. (Moore 2011, 1-3). With the lowering of tariffs an interesting free trade system came in place. For the EU, free trade in the form of a common market, became one of the founding pillars coupled with a common foreign and security policy and justice and home affairs. Over time the European Union (EU) has developed into an ever-closer union with a single currency, a president and its own set of rules regarding trade with external trade parties. Despite this liberalizing role of the EU regarding the GATT and WTO, the EU often has been accused of protectionist tendencies. One of these accusations focuses on the anti-dumping procedure that is allowed under article VI of GATT.
We can find this AD procedure at the heart of the EU’s trade policy. The use of AD
provide. Anti dumping is the main system to restore the equilibrium of the market and to re-establish the conditions of “Fair Trade”(Davis 2009). Unfortunately, many economist are of the opinion that the use of anti-dumping has little to do with protection of fair trade, but rather with the protection of domestic industries. These domestic industries search for protection against the cheap exports from mainly developing countries. This tendency globally generated concerns about the general potential for protectionism of anti-dumping law (Davis 2009, 5). In many instances, it is possible to pin down a certain pattern of evolution towards free trade: nations begin a process of liberalization in which the use of tariffs is reduced. Then, they install a preferential trading system, and then anti-dumping procedures starts to take a position within the trade policy of the specific country (Moore 2011, 3). The trade policy literature speaks of a certain “safety valve” for domestic industries to protect their own market. This principle of the WTO implies that the multilateral trading system must provide governments with the right to restrict international trade in the absence of tariffs. AD is only one of the ways to restrict trade (Bernard 2001, 36). This possibility to impose anti-dumping duties creates a legal possibility to protect the market against dumped products (Kang 2012, 1-6). This thesis argues that, in times of an economic crisis, more industries and countries refuge towards the use of anti-dumping. The chapter will first explore how the general literature on AD discusses the use of AD policy during times of crisis as well as in a regular working economy
According to Chad Bown the use of anti-dumping measures has been on the rise, mainly due to the lack of other ways to protect the own market. He states that the new protectionism primarily affects developing country exporters. The majority of the existing protectionist measures on the product level tend to reduce import competition by, especially, China (Bown 2009, 2-4). Nevertheless, the total amount of trade that is hit by AD duties seems to be marginal. In the research by Bown it becomes clear that only 0.45% of the total imports of the G20 countries of the WTO is targeted by duties. Nevertheless this 0.45% percent can have a very large impact on certain sectors of industry for both the importing as well as the
producing country. The dumping party can see their market share evaporate, whilst on the other hand the protected producer can be saved (Bown 2009, 6-8).
In general it is not easy to claim that dumping is harmful for the importing economy. Naturally, consumers of a dumped product gain due to the cheap prices, while producers of the, so-called, like product (more about the like product later) may feel a loss in sales. Therefore some authors state that AD Regulations do not have an economic justification (Krishna 1997, 11, Hindley 2011, 1).i In its Green Paper on trade defense instruments, the
“The economic justification for antidumping measures derives chiefly from the fact that international markets are imperfectly competitive – there is no international competition authority to regulate anti-competitive behaviour between countries. In contrast to an internal market like the EU, there are few rules that regulate business behaviour on international markets.” (Green Paper EC 2007,7)
This thesis believes that the argument given by the EC is quite meager to provide a justification for anti-dumping. The single argument found is that the current international market is imperfectly competitive and that therefore antidumping is the single way to regulate this imperfect market. Nevertheless, it does not give an explanation how AD can create a perfect market nor does it provide us with a justification on why AD would be the best way to fight the problem of unfairness. Looking at the way in which the European Commission pins down AD Regulations in the context of the WTO ADA could give better insights on the nature of AD and its use. These insights could help us predict how and why AD measures will be demanded by certain member states in a certain situation. Giving an overview of these Regulations will accordingly be the starting point of this literature review.
1.2 The WTO anti-‐dumping Regulations
AD Regulations are in place to fight unfair pricing. The question that arises from this declaration is: what is unfair? Article 2 of ADA defines unfair dumping as “the introduction of a product into commerce of another country at less than its normal value: the exported product price is less than the comparable price in the ordinary course of trade for the like product in the exporting country” (article 2.1 ADA). On first sight, this sentence provides us with 4 important concepts: normal value, export price, ordinary course of trade and like product. Giving a short introduction of these concepts, as well as the term product under consideration, might help to understand how the AD legislation works and what its key concepts are.
1.2.1 The export price
1.2.2 The like product and the product under consideration
The ‘like product’ is the product sold on the domestic market of the EU that is ‘like’ the exported – dumped – product. Article 2.6 ADA gives some more explanation on what “is like” would stand for. The like product is a product which is identical, i.e. alike in all respects to the product under consideration, or in the absence of such a product, another product which, although not alike in all respects, has characteristics closely resembling those of the product under consideration (Vermulst 2005, 9). In the case of injury finding, the like product is the product sold by the EU producers that is being injured by the dumped product (the product under consideration). The product under consideration is the product being dumped by the Chinese exporters. The need for clarity is thus clearly established in the ADA. The like product most often comes to use at moments when a comparison needs to be made between like product and the product under consideration. The like product is then used to establish the normal value by comparing the domestic price of the product under consideration on the Chinese market with the price of the Like product. The like product thus comes down to the exact same product on the EU domestic market as the product under consideration that is being dumped by the Chinese exporters.
As history has proven, the term like products leaves much to the discretion of the Authorities, in the case of the EU the EC. Unclearness within the determination has led to unfair outcomes in several cases (Aggrawal 2003, 3). This discretion creates the incentive as well as
opportunity to manipulate the category of the like products in order to achieve a specific goal. Leading to duties on cases where it should not and the lack of duties in cases with real injury (Bernard 2007). This discretion can thus easily be used by the EC to protect a larger market than the market injured, or to find injury in a market too broadly defined where ordinarily no injury was there to be found.
1.2.3 Normal Value and the ordinary course of trade
The normal value is generally the price of the product being dumped, in the ordinary course of trade, when destined for consumption in the exporting country market (article 2.6 ADA). Said simply, the normal value is the price on the own market of the exporter of the dumped product. If the dumped product for instance would be shoes than it would thus come down to the price of these shoes in China. The rule of ordinary course of trade means a trading situation in which products are sold for a price that is higher than the production costs, existing of fixed and variable costs and costs for administration. The ordinary course of trade in some cases does not exist. This would be if products sell for a price lower than the
find a normal value of the product. In this case the normal value has to be constructed by making use of the price of this product on the market in a third country. Problematic for the case of China is the fact that, China has not received Market Economy Status (MES) by the EU and the USA. Therefore, the legal framework of anti-dumping totally changes when it comes to the finding of the normal value. (Ministry of Commerce 2004). This system totally changes because a country that has not received MES also do not have an ordinary course of trade. Therefore, a normal value has thus to be constructed by picking a third country that does have an ordinary course of trade. How this construction is taking place is up to the investigating organization. In the case of the EU this would thus be the EC. This special system of MES needs some explanation. The following paragraph will first deal with the meaning of MES in ADA and in paragrapj 1.3.2 the EU’s system of MES will be described.
1.2.4 Non-‐Market Economies in the ADA
A special feature that I will focus on is the system Non-Market Economy Treatment (NME). Looking at the term, NME explains that a certain special treatment for economies that are not considered a market economy exists. The original idea behind the special treatment of NME’s stems from the presumption that in such a NME like China, with a centrally planned
economy, the market does not function as it is supposed to. Therefore, due to all the facets of a communistic society, like the lack of a proper market system, prices within this country are likely to be different from market-determined prices. Therefore, export prices of an alleged dumped product cannot be compared with the normal value of the planned economy, being the price on the own market. To address this difficulty, a substitute country with the same economic environment should be found to serve as an analogue country. Particularly this point is put forward as discriminating by many authors as well as the Chinese government, because in many cases an incomparable analogue country was chosen (Geest van der, 1998, 106) (Detlof 2006, 27). Although the ADA does not mention NME’s specifically, accession protocols do. Accession protocol WT/L/432 of China states in paragraph 15 that importing countries, when opting for an AD either: compare prices with the Chinese normal value or cost, or use a methodology not based on a strict comparison (Accession protocol to the WTO § 15). The WTO thus leaves it to the importing member to choose its approach.
The fact that the ADA does not define how normal value should be calculated in the case of a Non-Market Economy (NME) leaves open possibilities to discriminate for initiating
1.3 EU Antidumping Legislation
AD is a very interesting policy to study. Its ingredients of political-economic manipulation, intrigue, influencing and incentives make it an extraordinary case. The following part will try to explore in which way the European Commission‘s anti-dumping rules and procedures give rise to these ingredients. The focus will be on the role of the member states within the
decision-making process of anti-dumping. Furthermore, the way in which the members can initiate an AD case will come to the fore.
The current legal framework for antidumping within the EU is laid down in Regulation No 1225/2009 on protection against dumped imports from countries not members of the European Community (EU AD Regulation). The Regulation is based and founded on the WTO ADA and extended by other rules of the EU. Anti-dumping petitions can be submitted to the EC by any industry in the EU or through national governments acting on behalf of the community industry. The community industry is described in EU AD Regulation 4(1)). “The Community producers as a whole of the like products or […] those of them whose collective output of the products constitutes a major proportion, as defined in Article 5(4), or the total Community production of those products, except: when producers are related to the exporters or importers or are themselves importers of the allegedly dumped product, the term ‘Community industry’ may be interpreted as referring to the rest of the producers (EU AD Regulation 4(1)).”
A company that is thus importing the dumped product into the EU cannot petition an AD investigation (Nielsen 2012 ,94). Furthermore, it cannot oppose the initiation of AD measures on the part of the community. The petitioning companies or union, to act on behalf of the community industry, has to represent the community producers whose collective output constitutes more than 25% of the total production of the like product. This indicates that it is important to keep in mind that in most cases it is not sufficient for a certain industry based in one single country to cluster together and make a complaint. Usually industry support from more than one country is needed for the investigation to pass
1.3.1 the formal investigation
criteria are met, the EC will give notice of investigation and will start to examine whether dumping is taking place and also if the dumped imports are causing material injury to the community’s industry. Ideally an AD investigation has to be completed within one year. Furthermore, it may not take longer than 15 months to finalize the investigation. During this very time-consuming process many steps have to be taken. These steps are presented in the Flow Chart of an anti-dumping investigation that can be found in appendix 1. In summary it comes down to the following steps, to find whether
• Dumping is taking place from the country/countries concerned: • Material injury has been suffered by the EU industry:
• It is the dumping that is causing the injury
• It is in the communities’ interest to impose measures (which are usually in the form of an anti-dumping duty).
The last feature, the community interest test, comes down to a consideration regarding the effects of the imposition of an AD duty. Dumped products can be injurious to the producing market on the on hand but be very beneficial to the selling market. The EC thus decides which interest has more value for the EU. Later in the chapter, some elabourations on the community interest will be provided. After a time period of, in most cases, nine months the EC can come to the fore with provisional duties. After this period the Council of Ministers will decide whether definite duties need to be installed (Below I will come back to the role of the Council of ministers in more detail). These duties, when voted in favour by the Council can be imposed ad valoren, that is, as a percentage of the export price or as a fixed amount per unit imported. Furthermore, a minimum price can be established that is higher than the export price. In any case, these duties can be challenged within the European Court of First Instance and through the WTO dispute settlement procedure (Xu 2009 70-74). Both cases that will be treated in chapter two resulted in a dispute settlement case. I will now point out some of the elements of the investigation process that are important to fully understand the
investigation of the data.
1.3.2 Non-‐Market Economy Treatment for the EU
The context behind the MET system is based on the presumption that companies are seeking for profit and on the basis of this goal set their prices: therefore, without state intervention dumping would be an irrational deed. However, when the state interferes with market forces, it is possible that companies dump and still make profit, especially in the longer run because low pricing outcompetes their competitors, which makes larger profits possible in the future. This killing of competitors creates a failing market and can be described as the main
therefore they can be non-profit-maximizing. Furthermore, they do not make use of a market system because many inputs for production are provided or subsidized by the government. Summarizing, this creates two problems with NME’s: firstly, firms dump because the state orders them to do this, secondly subsidies by the government keep the prices artificially low, and therefore a comparison with the true cost of the product is not possible (ordinary course of trade principle, ADA article 2a, 1). To deal with these problems, certain MET criteria are in place. But many critics believe that these criteria are more extensive than necessary and therefore stipulate some companies as NME while they are not state controlled or subsidized (Cornel’s 2005, 159-160)(Detlof 2006, 17)(Neufeld 2001, 17-8).
The EU has made its own rules to approach NME’s, as written down initially in Council Regulation 384/96 and amended by Regulation 905/98. It defines the system of choosing normal value and an analogue country. Because NME’s according to the EU do not have a “normal value” of products, it is necessary to define this normal value in another way. According to article 2.7 of the anti-dumping Regulation this normal value should be established as follows:
“In the case of imports from non-market economy countries, normal value shall be
determined on the basis of the price or constructed value in a market economy third country, or the price of exports from such a third country to other countries, (…)or where those are not possible, on any other reasonable basis.” (Council Regulation 384/96)
This comes down to the price for the like product in a third country, or its exporting price or on any reasonable basis if these former two are not possible. But in reality only the first two methods described in the Regulation are being used (Detlof 2006, 9). Additionally, the protocol briefly explains how the analogue or third country should be chosen. The only important remark is that the analogue country should be chosen in a not unreasonable manner and any reliable information made available at the time of selection should be taken into account. The only real restriction in this way is that the analogue country is willing to cooperate. If the chosen country thus has prices or cost higher than China, the dumping margins will be inflated. The protocol does not mention why certain states are denoted NME’s and how they could become a market economy, making it possible for the EU to let China remain to be a NME’s until the expiration of the Regulation in 2016 (Tietje 2011, 2).
1.3.3 Market economy or individual treatment
companies (Trade: b:1/AHS/D(2006)D/1277). According to this protocol there are roughly speaking three kinds of companies in NME’s that are presented in figure 1 below.
Figure 1 Three kinds of companies in NME's (Detlof 2006)
room for the creation of artificial prices. Furthermore, the distortions from a non-market system that is still in place, like a large subsidy just before the transition to a company that received MES could create lower prices. On the other hand, the two problems being addressed are not solved by clear accounting standards. This only has to do with the possibility to analyze the information provided by a company in an AD case. Moreover, property laws do not directly affect the price of the product but rather influence the product, which refers to other laws than AD. Lastly the case of bankruptcy also is an odd one out in the list of requirements because insolvent companies in Market Economies are also supported by the state to continue their business to improve their situation. To summarize, most of the MET criteria go way beyond their target. They deal with the problems of verifying data of dumping, subsidization of products and the prevention of dumping rather than with the question whether the product in case is dumped or not. Bases on this it seems to be clear that the criteria set up by the EU to gain MES are overstated and as a result can result in an unfair situation in which AD is being used as a protectionist measure against the crisis. Section 1.3.4 will now look at the system of sampling and separate AD duties.
1.3.4 Sampling and separate duties.
In many ad investigations, the number of exporters being accused of dumping is very large. Due to rules on the maximum time span of an investigation, making use of all these
companies would result in a bureaucratic rump slump. For the sake of convenience the EC in this cases makes use of sampling. The idea behind sampling is to make things more efficient. This efficiency is necessary to remain within the time binding time schedule for the
investigation. The EC picks out some of the companies and their data and uses them to represent the complete exporting or producing market. For this sampling there are no real rules regarding the largeness of the sample. Often more than 50% of the total output of the exporters is taken as a threshold for the sample. The companies in the sample together receive a duty that will also count as the countrywide duty. Therefore, companies that are not
included in the sample may ask for separate duties. These companies only have to fulfill the basic requirements, which come down to providing all the necessary information within the time limits set by the EC. The companies that are granted separate duties thus receive a different AD duty than the companies in the sample (Satish 2012).
1.4 The EU’s Decision-‐making process
The former part explained the special features of the EU’s AD legislation that give rise to the use of AD as a protectionist measure. The following part will deal with the EU decision-making process of AD measures. The focus of this part will be on the role of member states within this process.
Member states do have influence on the investigative process of the EU in various ways. States have direct influence via the Anti-dumping Advisory Committee (ADAC) and by voting for definite measures in the Council of ministers. The legal basis for the ADAC can be found in Regulation (EC) No 1225/2009 Article 15. Within the ADAC the member states all have a representation to make their thought know to the European Commissioner. The role of the ADAC is to comment on the important stages of the AD investigation. In particular, the EC consults them upon the initiation of proceedings, whether or not to impose provisional or definite duties. Sometimes comments are given on the establishment of the dumping margin or on the question if the measures are in the community’s interest. Nevertheless, the influence of the ADAC is not as far-reaching as that of the Council due to the non-binding nature of the advice. Then again, the ADAC can clearly influence the outcomes of an AD investigation by giving their national advice on certain measures. This safeguards a clear representation of all the member states. Furthermore, the outcomes of a voting session in the ADAC can give insights on how the votes of the Council will be if the votes in the ADAC turn out negatively, the EC member that chairs the ADAC meeting can try to influence the national governments to vote in favour. Rumors say that this has happened in the shoe case (Nielsen 2012, 199). Unfortunately, the meetings by the ADAC are completely confidential so no real evidence of influence can be provided.
1.4.1 Influence in the Council
The influence of the member states in the Council is much more far-reaching. It is the
vote against definitive duties, rather than following the diplomatically more convenient route of abstaining. Smaller member states will find it more difficult to oppose a coalition in favour of imposing duties that includes certain “larger” member states” (Evenett 2005 705). This change almost surely increases the likelihood that more definitive duties will be imposed because preventing becomes diplomatically more difficult due to the new voting system in the Council (Evenett 2005 705).
According to Nielsen (2012) there are some significant differences to be found in voting behavior between member states. Rendering his research, primarily ten countries are active in the internal debate on protectionism and the use of AD Denmark, Finland, the Netherlands, Sweden, United Kingdom, Estonia, Latvia, Lithuania, Slovenia, and Poland. Of these active countries, seven countries detach themselves as staunch opponents of anti-dumping
protection: Denmark, Finland, the Netherlands, Sweden, United Kingdom, Estonia, and Latvia. Nielsen argues that these countries, except the UK, are small open economies. A reason why these countries more often vote against definite duties could be that they heavily rely on imports of products because their country is too small to be self-sufficient (2012, 190-204). There are also some member states that in most cases support anti-dumping duties. Portugal, France, Italy, Greece, and Spain showed their support in the Council on more than 85% of the cases. Belgium, being a small open economy in most of the cases (55%) supports the AD duty-supporting block either by voting in favor or abstaining. Luxembourg, the Netherlands, Finland, Germany, Sweden, and Denmark come to the fore as AD duty opposing countries (Evenett 2005, 10). Adding the countries denoted as opposing countries in the work of Nielsen to this list: United Kingdom, Estonia, and Latvia we can make an estimation on general voting behavior for most of the member states (Nielsen 2012,205)
1.4.2 Political interest
institutional factors can result in certain fluctuations in voting that may result in a vote that would, on first sight, seem to be against the interests of a member state (2004). Predicting the votes of member states is thus far from easy.
The legislative system of the WTO and EU clearly creates possibilities to protect the single market against competition from cheap exporters from outside the EU. Protecting the markets against imports from China tends to be even easier. The NME system creates opportunities for companies during trying times. But do these loopholes really attract self-protective industries to petition a case and thus rely on the help of certain national governments, making strategic use of anti-dumping in international trade? The next part will investigate the
research that has been performed on protectionism and the crisis to find whether these possibilities give rise to more petitioning of AD cases and in the end more AD duties. This part will thus perform a literature review that will form the background and theoretical basis for the research and the hypotheses.
1.5 Protectionism and the crisis
Although AD duties are in place to counter unfair trading practices, labeled as injurious dumping, it is suspected that AD duties are being used to protect certain industries against more competitive rather than dumped imports (Bekker 2006, 501) The paradox in this suspicion is the fact that, the founding reasons for AD can create new problems on its own. With the use of AD as a form of protection, the AD measure instead of the dumped imports would be the injurious factor. Injurious pricing should mean injurious to the market, not injurious to a certain industry. Nevertheless, some economist, argue that in the use of AD the protection of certain industries is more important than keeping a properly working market. This Keynesian influence also finds support in the EU (Bekker 2005, 509). At first, every legitimate advantage in price due to lower production cost, either due to better resources or cheaper labour, may run the risk of being characterized as unfair trade by the competitors in the internal market. Additionally, after an accusation has been made, and thus a case has been filled by an industry, the political willingness to support the European competitiveness is so broadly represented that in the legislative investigatory process protection for fair competition is deemed necessary. This endangers misuse of AD Regulations. Together with the
manipulation of the legislative process this system in the end may sum-up to AD protectionism (Davis 2009, 2-4).
In the end, building a hypothesis fully on suspicion would be an irrational thing to do.
are any measures installed to protect the market from competition, fair or unfair, and to keep a certain sector or industry safe from cheaper imports or other external threats.
In relation to AD measures this would thus mean that the goal of an AD measure is not only to prevent injurious pricing but also to protect an uncompetitive market from external threats. The result of this measure is thus not necessarily better for the free market but still will pass through. Necessary for the finding of protectionism is thus an external threat or perception thereof and a form of protection that does not solely have a justification on the basis of the ground idea behind anti-dumping to restore free trade’s market equilibrium.
1.6 Protectionism and crisis theory
Economic theory in general predicts that in times of economic downturn governments tend to remorse their path of trade liberalization and greatly resort to protectionist measures in several ways. Even the in words, greatest promoters of free trade, the EU and the United States of America still have numerous ways of protection in place. Anti-dumping protection seems to be the easiest form of protection to use while it has a certain mark of legitimacy placed on it via the institutional set-up of the WTO. Therefore, many authors predicted an increase in the use of AD measures during the recent economic crisis (Cheng 2001)(Bown 2009)(Bussiere 2011)(Konings 2010). The crisis potentially creates some observable evidence of hard times for domestic industries, thus generating incentives to protect the sectors hit by these hard times. Indicators such as import surges: rising unemployment and dwindling revenues are all used to demonstrate injury that justifies restricting trade as one way to provide relief to an industry (Pelc 2011,8).
To predict the use of protectionism by certain countries, endogenous theory (domestic theory) is most often used. This type of theory links the rising demand for protectionism to the economic welfare of a certain country. According to Pelc, the use of trade policy like AD is an expected response to the demands of interest groups harmed by economic downturn (2011, 7-10). One of these endogenous theories by Magee describes the connection between hard economic times and protection seeking as a compensation effect. This effect shifts the time and effort from certain sectors from economic activity to rent seeking by political lobbying to find protection (Magee 1991, 168). The theory is elabourated upon by Grossman and
Translated to AD this regularly comes down to general rent seeking behavior by interest groups. The interest groups, often being a domestic import competing sector that is hit by the lack of tariffs to protect the market, may invest money in lobby activities to create outcomes that result in a better position for the producer group (Bloningen 2001, 16). This tendency is mostly discovered in the steel and chemicals industry, mainly because many labourers work in these sectors, which creates incentives for governments to protect these markets
(Vandenbussche 2008, 99).
Another theory on protectionism during times of crisis is the idea of the safety valve. Using AD as a safety valve means that AD can be used in times of need creating a certain insurance against competitors outperforming the producers within the EU (Mastel 1999)(Moore 2005) (Niels 2006). Furthermore, a theory accounting for the use of protectionism during hard times is the theory by McKeon which argues that politicians, to win votes during unpopular times of crisis, use protectionism to show that they care about the domestic industries and people that are hurt by the crisis (1983, 75-78). Tacacs even links this point to direct selling of votes by large groups of producers and their employers, creating a great incentive to, for instance, vote in favour when it comes to definite duties in the Council of ministers (Tacacs 1981, 687). A macroeconomic reason for the use of AD filings is linked to the fact that in times of crisis the success rate for petitioners of AD is much higher than during times of flourishing trade. A slump in economic activity in the importing country makes it more likely that domestic firms perform poorly which may facilitate a finding of material injury, thus improving the odds for a final measure. Furthermore, exporters like China could set lower prices for economies faring badly, either to keep their exports similar compared to the pre-crisis times or to
outperform the domestic industries. If this is indeed the case, this could easily result in pricing below fair value according to the EU’s AD system (Knetter 2000, 2). Furthermore, this lower pricing could be the result of a crisis within the own country creating lower domestic demand, which increases the incentives for a producer to export. This incentive will finally result in a price that can attract AD duties because it is often lower than the price of the importing industry (Bown 2013, 53, Crowley 2007).
Nevertheless, crisis does not always result in protectionism by AD. One of the reasons why this does not always happen is the community interest clause of the AD Regulation.
1.6.1 The Community Interest
it would seem contradictory to create a condition, like the EU did, and not follow it. Yet, this is precisely what the EU seems to be doing. Nevertheless, as this thesis argues, it could be in the community’s interest to protect the own market for a certain period of time, bearing the losses of this protection, and later on creating a better economic outcome for the market. One thing that can be deducted from the community interest is that if more weight is given to the importance of domestic firms profit than to consumer prices, a measure doing this is
protectionist because the measure is only installed to protect the industry’s interest and not those of the complete community (Cheng 2001 640). In most cases, not much attention is given to the sake of the consumer. The focus tends to be entirely on the firm’s/industry’s side. This view is supported by the work of Davis and Newman (2009) (2007). Davis also casts doubts whether consumers’ and users’ interest is taken into account. Although every
interested party, thus also consumer organizations, may hand in economic evidence of injury, they hardly do so in reality. The main reason for this seems to be the very complicated submission process. Furthermore, hardly any notice of investigation is presented to the consumer and user parties, which leaves them with insufficient time to present a clear case (Davis 2009, 5, Newman 2007). This raises the question whether the EU purposely protects domestic industries. Several papers have concluded that the EC indeed does so (Eckhardt 2011, Bruce 2001, Zeng 2005). A striking example seems to be the ongoing solar panel case, in which, against all advice and stakes of the community in, regarding for instance the battle against global warming, the EC tries to protect the internal solar panel market. If
protectionism, for certain strategic industries, is made possible by the EU then we should expect to see more AD investigations in times of crisis. Therefore, the following part will give an overview on protectionism during times of crisis.
1.6.2 Times of Crisis
When assessing the trade policy response to the current economic crisis with a focus on the use of protectionism it is logical to look at AD cases. With the liberalization of tariff levels the use of AD measures and other safeguards tends to be on the rise (Hoekman 2001). History provides us with clear-cut examples of protectionism during the great recession. Economic evidence from historical data finds a strong link between the use of trade remedies, like AD, and times of economic downturn (Knetter, 2000, Irwin, 2005). Nevertheless, recent research on the current crisis and the use of AD does not supply us with the same information. Indeed, the effort to track, assess, and examine the impact of the spread of protectionism in the form of AD cases during the current global economic crisis is complicated (Bown 2009, 3).
studies look at the total share of the EU’s import being charged with a duty. These studies thus investigate the size of the imports that is prevented or downgraded by a duty. One could also look at a change in the targeted industries. If more industries are being targeted, this could mean an increase in protectionism in industries their market that used to be healthy and now are protected against the dumping of exporters outside the EU.
Work by Chad P. Bown, the most important author on the use of AD and founder of the anti-dumping database at the World Bank has performed much research regarding the crisis and the resort to protectionism (Bown 2009, 2011(1), 2011(2)). When looking at the use of AD measures by WTO members (not specifically EU) two things can be concluded: we see a certain rise in the number of AD cases being filed. Furthermore we find that 79% of all the investigations initiated resulted in definite AD duties compared to 60 to 70 percent before the crisis. A note to be made is that in general, the EU has a lower number of cases resulting in a final duty (55-60%). When looking at a projection of the use of trade remedies (see figure 2), of which 92% are AD cases, we see that a general rise in the use of AD during the crisis seems to be prevailing. Worldwide, an increase of more than 12% is expected.
Figure 2 Newly imposed import-‐restricting trade remedies at the product level, including projections for 2010 (Bown 2009,6)
One could deduce from this information that there is a particularly strong desire to stop the imports of cheap products from China in order to protect the market. The overall increase in AD filings against China suggests a general tendency to stop cheap imports from China. A good reason for this could be the large influence on the global market that China poses in certain industries like the base metals sector, chemicals sector, textiles sector and plastic sector (WTO 2009)(Kang 2012,1002). In times of crisis, ruling out competitors tends to be a good way to protect the own internal market (Vandenbussche 2010, 670-674).
In this regard it is interesting to look at the work of Vandenbussche and Zanardi who explored the use of AD measures by the EU before and during the crisis (1995-2009). One particularity that clearly came to the fore was the fact that the EU mainly targets exporters that have a similar export product mix as the production of the member states. A large exporter such as China that produces a large amount of commodities thus has more chance of facing AD duties because they export more products that are also produced within the community. Especially during the crisis this product mix became more important, resulting in more sectors of industry being targeted by AD measures than before the crisis. Nevertheless, their paper also estimates that there is no evidence of a major change in the EU’s trade policy and the use of this policy since the outbreak of the crisis. They also found that the share of imports from China covered by AD duties remained relatively modest. No real rise in the number of AD duties could be investigated at the outbreak of the crisis. The number of cases rose a little, but compared to the general trend that started in 2004, the number of AD cases has not been significantly different than before the crisis (Vandenbusche 2010). Remarkably these findings directly oppose the basic idea behind this research. Therefore, this research will have a renewed look at the AD investigations on the level of member-states instead of the EU as a complete union to find how the crisis influenced the use of ad and the general stances on AD for some countries and sectors of industry.
1.7 Conclusion
Anti-dumping law by the WTO and EU are put in place to protect the market against injurious dumping. One thing that became clear is that the legislative system of the EU regarding anti-dumping leaves open many possibilities to make use of AD for a different purpose than its intentional use. The discretionary powers that are given to the EC give the EC the possibility to decide what is in the community’s interest or not. Furthermore, the special features of the EU’s AD Regulation regarding NME make the finding of injury more a rule than an
