In parallel with the entry into force of Regulation 2017/2321 amending EU anti-dumping and subsidy rules (see here for further details), the Commission released its first country report on December 20, 2017.  Unsurprisingly, the Commission has chosen China as the subject of this first report.  In the accompanying Q&A document, the Commission stresses that this choice “merely reflects the fact that investigations and measures against China account for the largest proportion of the EU’s anti-dumping investigations and trade defense measures”.

Regulation (EU) 2017/2321 introduced a new methodology for the calculation of the normal value in anti-dumping investigations for products from countries with “significant distortions”.  To assess whether significant distortions exist, the Commission may rely on any information brought by industry or which comes to light during an investigation.  (See our previous posts for further detail on the final text of the regulation and the political agreement on the new methodology.)

Furthermore, the Commission may draft country or sector reports in the event it has “well-founded indications of the possible existence of significant distortions”.  These reports will be made publicly available and will become part of the evidence on file in any anti-dumping investigation into that country or sector.  These reports are important as complainants will be able to rely on the evidence in these reports in an anti-dumping investigation or review.  Interested parties will have the opportunity to rebut, supplement, comment or rely on these reports and the evidence on which it is based in each investigation in which such report or evidence is used.  However, the actual probative value of the reports as the underlying proof for a claim regarding the existence of significant distortions is unclear.

The approximately 450-page report examines the existence of distortions in China. It first offers a general description of the current shape and structure of China’s economy, and subsequently sets out the main production factors used in all manufacturing processes.  Finally, it provides an in-depth description of four key sectors: the steel, aluminum, chemical and ceramic sectors.  It concludes that the Chinese state exerts a decisive influence on the allocation of resources and prices, leading to significant market distortions in these four key sectors as well as in the Chinese market as a whole.

The Commission stresses that this report is not indicative of any political views, preferences or judgements, and that the report does not imply that the alternative methodology will be automatically applied to China or any other country.

The Commission has announced that its next country report will concern Russia.

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