The proposal covers targeted amendments to Regulation (EU) 2016/1036 on protection against dumped imports from countries that are not members of the European Union (the Basic Anti-Dumping Regulation) and to Regulation (EU) 2016/1037 on protection against subsidised imports from countries that are not members of the European Union (the Basic Anti-Subsidy Regulation). The regulation aims to change the way for determination of normal value in the presence of market distortions: the Regulation stipulates the basis on which normal value should be determined in the case of imports from non-market economy countries.
For WTO members, the normal value is normally determined on the basis of the domestic prices of the like product or on the basis of a constructed normal value. There are circumstances, however, in which the domestic prices and costs would not provide a reasonable basis to determine the normal value. This could be the case, for instance, when prices or costs are not the result of free market forces because they are affected by government intervention.
In such circumstances, the Commission considers that it would be inappropriate to use domestic prices and costs to determine the value at which the like product should be normally sold. Accordingly, a new provision stipulates that the normal value would instead be constructed on the basis of costs of production and sale reflecting undistorted prices or benchmarks. For this purpose, the sources that may be used would include undistorted international prices, costs, or benchmarks, or corresponding costs of production and sale in an appropriate representative country with a similar level of economic development as the exporting country.
This methodology would allow the Commission to establish and measure the actual magnitude of dumping being practised in normal market conditions absent distortions.
For the sake of transparency and efficiency, the Commission services intend to issue public reports describing the specific situation concerning the market circumstances in any given country or sector. Such reports and the evidence on which it is based would also be placed on the file of any investigation relating to that country or sector so that all interested parties would be in a position to express their views and comments.
The proposal introduces specific disciplines ensuring that the entry into force of the new system would not create legal uncertainty for ongoing cases or unduly affect existing measures. Thus, the proposal makes clear that the new system would only apply to cases initiated upon entry into force of the amended provisions. Any given ongoing anti-dumping investigation at the time of entry into force would remain governed by the current disciplines.
The proposal also makes amendment to the Basic Anti-Subsidy Regulation as the experience shows that the actual magnitude of subsidisation is not always evident at the time of initiation. Yet, those subsidies clearly provide an unfair benefit the exporters concerned, which allow them to sell at injurious prices to the EU market.
For reasons of due process and transparency, the proposal clarifies that, when such subsidies are found in the course of any given investigation or review, the Commission will offer additional consultations to the country of origin and/or export concerned with regard to such subsidies identified in the course of the investigation. In these situations, the Commission will send to the country of origin and/or export a summary of the main elements concerning these other subsidies to ensure meaningful consultations.