The National Board of Trade observes in a new investigation that price dumping is evaluated differently depending on whether the product is manufactured in the EU or imported from third countries. What is considered to be price dumping when imported is considered normal competition for a product manufactured in the EU. This fact affects countries' abilities to compete on equal terms in the European market.
This year, for the first time in over ten years, the European Commission intends to evaluate and modernize the EU's use of trade defence instruments on imports from countries outside the EU. During the spring, as a result of the evaluation, The National Board of Trade will present a number of analyses in this area. "Paving the Way for Unfair Competition: The Imposition of EU Anti-Dumping Duties on Ceramic Tiles from China" is the first in the series.
At the moment, the EU is motivating the use of anti-dumping measures on imports from countries outside the EU with the need to eliminate trade-distorting competition. The National Board of Trade's investigation reveals, however, that what is referred to as price dumping in the anti-dumping context, takes place on the EU's internal market without violating competition law. This is partly due to the fact that the criteria for underpricing in the anti-dumping legislation are much lower than the corresponding criteria in EU competition law.
In order for a product to be defined as under-priced in accordance with the rules on competition as laid down in the EU's internal market, it is required that the company in question is in a dominant position (that it has for example, a market share of 40-50 per cent) and that the selling price is lower than the average variable cost of production. In order for anti-dumping measures to be imposed on the import of a certain product, it is required, however, only that the exporting country has a market share in the EU greater than 1 per cent. Price dumping is considered to occur even if the export price of the product is greater than the average total cost of production.
In the National Board of Trade's investigation, the EU's recently imposed anti-dumping duties on ceramic tiles from China are analysed from a critical perspective. The analysis shows that the anti-dumping legislation needs to be amended in several crucial areas if the objective of anti-dumping measures is to ensure effective competition. If no change to the regulatory framework takes place, anti-dumping duties only contribute to distort competition. This means that the EU's manufacturing industry will have a competitive advantage, but that prices for European consumers will be higher.
Report:
Paving the Way for Unfair Competition - The Imposition of EU Anti-Dumping Duties on Ceramic Tiles from China
Download (PDF)
If you have any questions, please contact:
Jonas Kasteng, National Board of Trade
Telephone: +46-8-690 48 45
E-mail: jonas.kasteng@kommers.se.
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