EU’s tough anti-dumping rules worry Russia

Amiti Sen New Delhi | Updated on October 30, 2020

Asks why India, South Korea were not investigated for market distortions

Russia is unhappy with the European Union (EU) for marking it out, along with China, for the application of tougher anti-dumping methodology on the grounds of market distortion in prices, and has dragged India and South Korea into the fight by alleging that significant market distortions also existed in the two countries which hadn't been identified for investigation by the bloc.

At a recent meeting of the WTO’s Committee on anti-dumping practices, Russia pointed out that it had systemic concerns with the EU's new anti-dumping regulation and with the recent amendments to the regulation, which set out the concept of “significant distortion”, according to a Geneva-based official.

Anti-dumping duties are imposed on imports when it is established that the export price is lower than the normal price in the markets of the selling countries; causing injury to domestic producers in the importing country.

“Russia was unhappy that the EU had come up on October 23 with a report on Russia and the market distortions it found there that would be used as the basis for the application of its 2017 methodology against Russian firms,” the official added. Russia also demanded to know why the EU was not producing reports on countries such as India and Korea and alleged that significant market distortions also existed in those countries, the official said.

Beijing, too, complained about the EU's report on market distortions in China and noted that these reports were only against two countries.

Dealing with distortions

The EU established its new anti-dumping methodology in 2017 to deal ‘head-on’ with the market distortions which may exist in countries where reported prices or costs, including the cost of raw materials and energy, are not the result of free market forces and are affected by substantial government intervention. Such prices can’t be accepted for calculating anti-dumping margins, it said.

Per the new rules, the European Commission would draft reports for countries or sectors where it will identify distortions and the evidence collected will be available for future investigations. The industry in the EU would rely on these reports to make the anti-dumping cases against the concerned countries where distortions existed.

EU finding new excuses

Russia accused the EU of finding excuses to come up with new practices to adjust exporters' reported costs to ensure the application of duties, and said these were against the WTO rules.

The EU said it had already given a reply explaining how its new rules were consistent with the WTO norms. It added that all information in the country reports could be contested by any interested party.

On why other countries like India and Korea had not been selected for examination in new reports, the EU said any such decision will be based on the same criteria of government distortions, which were used as the basis for initiating the Russia and China reports.

Published on October 30, 2020

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