Replies of interested parties on Commission draft guidelines - Summary -

Contents A. UNION INTEREST TEST ........................................................................................................................ 2 B. EXPIRY REVIEW.................................................................................................................................... 9 C. INJURY MARGIN ................................................................................................................................ 16 D. ANALOGUE COUNTRY ....................................................................................................................... 20

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A. UNION INTEREST TEST Following the public consultation on draft guidelines between 12 April 2013 and 31 July 2013, 98 associations and companies made submissions on different aspects of the drafts. The Union Producers were the largest group among the respondents (40%). They were followed by Trade Associations representing Union Producers (25%). The remaining (35%) was made up of nine smaller groups of which the largest four were the Trade associations representing at the same time Union Producers and Importers (6%), Trade associations representing Importers (5%), Importers (5%) and Other (10%).

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I. INTRODUCTION

A large number of respondents, mainly Union producers and some importers, asked for postponing the adoption of guidelines until the legislative proposal entered into force. They stressed that guidelines should reflect the Institution’s consistent practice, avoiding unpredictability. It was crucial that the adoption of the modernisation measures took place as a single package, since the approved version of the legislative proposal may have implications on the guidelines; it must be avoided that guidelines introduced new practices, or practices that had been used only once and/or new elements, concepts or notions that were not clearly disciplined by the Basic Regulations.

§ I.1 Numerous stakeholders believe that the following text in §I.1 “The EU only imposes AD or AS measures if they are not against the interest of the EU” was a complete reversal of the rationale and of the burden of proof. They therefore suggested its removal. Three parties comprising Union producers and associations claimed that with regard to the Union Interest test, it should be made clearer, i.e. in the first thematic statement, that proven injurious dumping should be corrected as the normal course of matters. In contrast, while not directly linked to the guidelines in question, they found “any prospect of a “lesser duty” rule unacceptable and contrary to the existing Basic Regulations. The presumption for the need to apply AD/AS measures "was entirely correct”.

§ I.2 One Union producer and one association requested §I.2 to be deleted since, as already shown in § II, this wording changed the principle expressed in Article 21 of the AD Basic Regulation (Article 31 AS) which states that “Measures, as determined on the basis of dumping/subsidisation and injury found, may not be applied where the authorities, on the basis of all the information submitted, can clearly conclude that it is not in the Community interest to apply such measures”.

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II. All INTERESTS OF EUROPEAN ECONOMIC OPERATORS ARE TAKEN INTO ACCOUNT

§ II Many Union producers and trade associations representing Union producers wanted Section IV to be included after the introduction or after paragraph II. It was important to them to recall the very strict circumstances under which the UI assessment could lead to the non-imposition of measures.

§ II.5 A large number of Union producers, some trade associations representing Union producers, users and importers criticized the text in §II.5 that stated: “individual traders and importers, including those related to exporters”, have standing under the UI test. According to them, exporting producers did not have standing, as stressed in §II.6. Consequently, for the sake of consistency traders and importers related to them should be taken off the list in §II.5.

§ II.6 A large number of Union producers, some trade associations representing Union producers, users and importers highlighted that the list of parties was non-exhaustive. They suggested that the list in point 5 of the guidelines should be exhaustive, as allegedly was the list in Articles 21 and 31 of the Basic Regulations.

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III.METHDODOLOGY

§ III.8 and § IV.14 An overwhelming number of Union producers, some trade associations representing at the same time Union producers and users criticized the 5th sentence of the first indent which made reference to “the future perspective of the Union industry”. This notion does not belong to current practice. Therefore, either the EU should clarify what “future perspective” means, indicate what criteria substantiates it and how this was to be notion applied to SMEs and to “niche” sectors, or the EU should delete it.

§ III.8 A large number of Union producers and associations and some importers referred to the part of the guidelines that referred to the inquiry as to “how would measures impact on value chains” of importers and traders. They believe that the EC already analyses implications on traders/importers in terms of cost increases, overall profit margin and profit margin of the product concerned. The assessment of their value chains is a new element in the TDIs framework and they therefore wanted the reference to be deleted. A large number of Union producers and associations took issue with §III.8 that suggests to consider the existence of “a direct economic link between the product subject to investigation and other EU policies”. Under usual circumstances and current practice the EC assesses AD in connection with tariff related-policies. Providing political consideration to broader policy areas (e.g. foreign policy, labour or environmental standards, energy policy) goes beyond current practice and would be extremely dangerous. As a result, they asked for the deletion of the reference.

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IV.MEASURES ARE NOT TO BE IMPOSED IF THEY ARE CLEARLY NOT IN THE UNION INTEREST

§ IV 11 and 12 Some Union producers and associations made reference to the provision on Non-Imposition of Measures. They agreed that the standard to not impose measures for Union interest reasons was high – and had to remain high, i.e. the presumption was that injurious unfair trade was normally corrected. With regard to “disproportionate negative consequences for the user industry”, this should be quantified and specific. “Macro-economic factors such as consumer choice, employment or subjective views on “future perspectives” were minor compared with the direct factors/ contributions and /or problems of the principal interested parties”.

§ IV.14 More than half of the Union producers and associations representing Union producers asked for the deletion of the “example” which provided for generic, or policy, criteria that was not consistent with current practice.

V.UNION INTEREST CONSIDERATIONS MAY INFLUENCE THE SELECTION OF THE TYPE OF MEASURES

A great many Union producers and associations of Union producers as well as some importers suggested that this part of the guideline text heavily conflicted with Article 21 of the Basic Regulation. Union interest considerations should not have implications on the type of measures to be chosen. Therefore it should be deleted. Some Union producers and trade associations representing Union producers stressed that AD/AS measures should be based only on facts and not on political considerations.

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VII.PROCEDURE FOR ESTABLISHING UNION INTEREST

§ VII.20 More than half of the Union producers and trade associations representing the Union producers as well as some importers argued that importers related to exporting producers should not be part of sampling. It was important to explicitly mention in the guidelines the criteria for sampling. Furthermore, “Article 21 did not give sampled parties any right to have the EU make individual findings in relation to them, such as it is the case in findings of dumping/subsidies and injury caused thereby in relation to specific parties. There was no corresponding individualization in relation to the Union interest”. Some stated that the sampling criteria for each subject also needed specifying so that the result of the Union Interest Test was not unilateral and subjective. For example, when applying sampling to importers, the Commission needed to select the reply of not only large scale importers but also small scale importers to get the objective and reasonable collective comments.

GENERAL COMMENTS

One Union producer and one trade association representing Union producers put forward that they agreed on the publication of Guidelines, provided that their aim was simply to reflect current practices in order to increase predictability for economic operators. They did not want the Guidelines to introduce any policy changes nor to be interpretative or bring in policy choices. In their opinion, efforts had to be made to integrate in these Guidelines the practices that had been used in the vast majority of cases to reflect a “consistent” practice. Some Union producers from one Member State defended the idea that despite the fact that they were introduced many years ago, the regulations that were currently in force did in fact meet the needs of Europe, both in essence and conceptually, relative to the defence of those principles for which they were striving. The problems against which they had argued in the anti-dumping dossiers and in the public consultation held in 2012 were not in fact conceptual in nature, but arose instead from a level of practical management that had been unsuccessful. In their view the main problems arose from the manner in which measures AD and AS were applied in practice.

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The documents that were currently undergoing public consultation relative to the revision of the TDI neither attenuated nor resolved any of the problems in question. In fact they believed that the opposite was true, because they both aggravated and increased their effects: A. They furthermore complained that no initiative or decision existed that would make the level of information and work demanded of companies and their representatives either more simple or less onerous. Proposals included an attempt to persuade companies to make additional efforts in managing the complexity of the problem, which was precisely the opposite of what was required. B. Moreover, they were critical of the fact that there was nothing in the proposal to deal with the arbitrary nature of the political decisions which had characterized the actions of the European Union. Instead, the EU proposed the creation of guidelines - a highly undesirable innovation - which would permit much greater levels of discretion as they would not fall under the scope or framework of legislation, so that the application of the aforementioned guidelines would by its nature be subjective. Given the above-mentioned points, they proposed that: 1. concrete measures were adopted leading to the simplification and reduction of the amount and level of information required of European companies as part of the investigations relative to AD and AS; 2. the decision-making process be altered, with much more importance being given to the Commission's technical proposal when making the political decision, in order to ensure a greater level of objectivity and appropriateness to the reality and effectiveness of the measures; 3. guidelines were not adopted separately. They recommended that one single legislative package was put into place, a package that would possibly also include the aforementioned guidelines; 4. Positive discrimination was introduced in favour of industrial SMEs over commercial SMEs, given that the former were the ones that were truly affected in commercial terms, and were therefore those that required a greater level of defence. If the proposals that they suggested were not adopted, the process of European re-industrialization would be at risk, and the levels of industry that currently existed would continue to abate.

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B. EXPIRY REVIEW

Following the public consultation on draft guidelines held between 12 April 2013 and 31 July 2013, 78 associations and companies made submissions on different aspects of the drafts. The Union Producers were the largest group among the respondents (36%). They were followed by Trade Associations representing Union Producers (27%). The remaining (37%) was made up of nine smaller groups of which the largest two were the Trade associations representing Importers (7%) and Trade association representing Union Producers who also have import activity (6%).

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I.TRIGGER FOR AN EXPIRY REVIEW

§ I.1 and § I.3 Some Union producers and one importer stressed the fact that they were not given the opportunity to provide their views on the duration of measures with the public consultation on MTDI launched by the Commission in 2012. Other Union producers and associations asked for the provision of Art. 11.2 of the Basic Regulation (BR) “Such an expiry review shall be initiated on the initiative of the Commission, or upon request made by or on behalf of Community producers, and the measure shall remain in force pending the outcome of such review” to be incorporated in the draft guidelines. Many put forward the idea that although it had not been used in practice, the possibility for the Commission to initiate expiry reviews was provided for in the BR. However, they believe that this did not mean that the EU would open an expiry review “only in exceptional circumstances”. Therefore, they request that the sentence “However, the EC would only do so in exceptional circumstances” be deleted. Moreover, they argued that the EU should automatically initiate expiry reviews in case of structurally distorted markets in the exporting country that warrant continued protection of EU industry, especially when the latter has taken all the necessary measures to adapt.

III.LIKELIHOOD OF CONTINUATION OR RECURRENCE OF DUMPING

§ III.9 A substantial number of Union producers and associations stated that the current wording appeared to be in breach with the BR and should be amended as follows: “If it is established that there is a continuation of dumping during the review investigation period, the European Commission will conclude that such dumping would continue if measures were repealed”. The reference to “significant quantities”, according to them should be deleted because it was not a legal requirement.

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§ III.11 An overwhelming majority of respondents representing Union producers and some importers claimed that the new provision “sustainability of dumping practices” went against common practice. They rather prefer a list of factors to be given consideration in the analysis of recurrence of dumping. This should be a positive list, and counter-indications of recurrence of dumping should be removed. One governmental body suggested that the antidumping measures should be subject to an absolute time limit of five years. If they were to be re-imposed, a complete new investigation would have to be launched with the proper establishment of dumping and injury absent to measures.

V.LIKELIHOOD OF CONTINUATION OR RECURRENCE OF INJURY

§ V.16 Some Union producers stressed the fact that the reference to only 2-3 years to examine the situation of the Union industry was not comprehensive or reflective of long-term deep structural unresolved problems in exporting countries. It should rather be mentioned that the EU industry could supply evidence over 10 or even more years. This was a feature in certain industrial sectors.

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VIII.DURATION OF AD AND AS MEASURES

§ VIII.21 A lot of parties representing Union producers defended the idea that the sentence “AD and AS measures shall expire five years” might be read as those measures could be renewed only once. They suggested the use of the wording of the AD/CVD Basic Regulations “a definitive AD measure shall expire […] recurrence of dumping and injury” (Article 11(2) BR AD, and Article 18(1) BR AS).

§ VIII.22 The vast majority of Union producers and associations as well as some importers and users asked for the deletion of the paragraph VIII.22 since the Basic Regulations clearly stated that “A definitive antidumping [countervailing] measure shall expire five years from its imposition”. According to them, expressions like “specific grounds or circumstances” or “clearly warranting such shorter duration” revealed that the EC wanted to establish new practices to carry out interim reviews prior to the normal 5-year expiry review. On the contrary, the guidelines should only codify the consistent and general practice, not cases of exceptional nature.

IX. RELATIONSHIP BETWEEN INTERIM AND EXPIRY REVIEWS

§ IX Some representatives of the Union industry and some importers made reference to the possible combination of the two types of review (interim and expiry) on the occasion of the renewal of the measures, since currently the level of duties may change only as a result of an interim review; this would make the possibility of extending duties more complex. It would reduce the duties’ average period of validity and allow changes in the level of the duties, weakening their overall effect. Therefore they recommended deleting the paragraph. A group of mainly Union producers stated that the title of paragraph IX should be changed into “interim reviews” and § X.25 should include the exact wording of the AD/AS regulations: “it shall expire five years from the date of the conclusion of the review”.

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X.RESULT OF AN EXPIRY REVIEW

§ X.25 Many respondents comprising mainly Union producers stated that this paragraph might give the impression that the Institutions’ practice was not consistent with the letter of the AD/CVD regulations. For instance, in the third sentence, instead of “it will normally apply for another five years” the exact wording of the AD/CVD regulations should be used “it shall expire five years from the date of the conclusion of the review”. Finally, in cases where there were structurally distorted markets that warrant continued protection of EU industry - especially when the latter had taken all the necessary measures to adapt - then the EC should automatically initiate expiry reviews.

GENERAL COMMENTS

Some Union producers and trade associations representing Union producers requested that the status quo be maintained because it guaranteed the effectiveness of the instruments. One Far Eastern exporter stressed that while fully supporting the Commission’s desire to make the administration of its TDI practice more transparent, it would note that the four guidelines seem to offer relatively little that cannot be found in EU handbooks on EU anti-dumping law. Furthermore, it drew the attention to the fact that guidelines with regard to other – and very important - substantive issues such e.g. the calculation of dumping and subsidy margins were unfortunately lacking. Therefore it was hoping that the Commission might wish to consider also addressing these issues in future guidelines. One trade association representing Union producers highlighted that expiry review investigations entailed some uncertain projections into the future. Having a further insight on the methodologies that are used for the expiry review would certainly be useful for interested parties to understand the rationale of the final decision. It believes that AD/AS measures were introduced for, in most cases, a five year period and when an expiry review was initiated, it could bear disproportionate consequences as the existing measures were automatically extended for the 15 months required for the review. They therefore suggested that expiry reviews be conducted during the term of the original measures. Also, in exceptional circumstances, the Commission could open expiry reviews on its own initiative. They furthermore claimed that a clear definition of what constitutes an exceptional circumstance was necessary, as this left the Commission too much room for actions that may not be supported by the parties involved.

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One trade association representing Union producers and importers wanted to bring to the attention of the Commission that it was concerned that the Commission’s consideration of sales prices in the respective markets as a possible rationale for assessing the risk of renewed dumping was not very scientific, and open to a significant amount of speculation. It seemed unusual to suggest (as per the EU example in italics) that a low price in the European market implied the possibility that the exporter would only re-enter the EU market by under-cutting this price and by selling below European market prices and below their own home market rates. In its view, this showed a misunderstanding of the market. The vast majority of companies would probably decline to operate in the EU market if there were such tough market conditions, which would not offer short-term or strategic long-term value. According to this party it should also be noted that prices in foreign markets were not always a good indication of what actual prices should be in the EU, as a wide range of different factors were at play in the pricing decisions of companies. One governmental body argued that the extension of anti-dumping measures beyond five years should be possible only under very strict conditions. If measures were to be maintained, their duration should be set at 3 years with the possibility of extension with one further 3 year period which it believed was the maximum limit before measures must be repealed permanently. Furthermore, duties collected under the expiry review beyond the 5-year duration should be reimbursed if they were collected on unjustified grounds. Another element that was brought forward by the same governmental body was related to the de minimis rule. In its view the de minimis thresholds should be changed upwards. It believes that the de minimis threshold for dumping of only 2% gave room for measures on imports which most probably only marginally might contribute to injury, if any. On the other hand, a de minimis threshold for dumping (calculated using present praxis) of, for example 5% would focus on cases of higher importance and stop measures on marginally dumped imports. It states that if this avenue of reform was not feasible it would argue that the present antidumping regulation should be redrafted to make sure that antidumping measures only target anti-competitive practices by foreign firms, and not any import competition. Two important reforms would be to redefine the concept of dumping to only encompass predatory pricing, and to introduce the concept of “dominant position” into EC antidumping law. For two importers and one trade association representing importers it was essential to draw the attention to the fact that the reviews should take into account the level of duty applicable as well as the likelihood of dumping. They were of the opinion that markets change over the 5 year period and the relevance of the duty needed to be reviewed as a matter of course. For one trade association representing Importers “the opening paragraph of the guidelines refers to the fact that a notice of impending expiry is published in the Official Journal around nine months from the date of normal expiry; thereby giving interested parties the chance to request an expiry review by the three month deadline stipulated in the following paragraph. Whilst this does create a certain amount of predictability for those interested parties wishing to file a request (i.e. the EU producers) this is not the same for importers, retailers and users”.

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For the association, this was unacceptable. It argued further that “if no request has been received at the time of the three month deadline, it is known by the Commission that no review will occur. Of course, if a request has been filed then the Commission is bound to assess the evidence therein and this is likely to take some time”. However, the association “believes that this period is likely to be somewhat less than three months. Therefore, it claims that “once it is known that the measures will expire on the expected date that fact should be published at that time”. However, research conducted by the association (1999-2009) shows that “this notice frequently occurs on the day of actual expiry and on a number of occasions after that date. On those occasions when the Commission finds that duties should not continue and an expiry review is terminated, clear reasons for the termination are detailed in the notice of termination. This is clearly good practice. However, when an expiry review is terminated following the withdrawal of the request for the review by the complainants, no reasons are given; only a statement that such termination is not against the Union interest”. The association considers this to be a failing of the system and requests that detailed reasons for the withdrawal are given in the notice of termination. The guidelines note that the Basic Regulations do not contain an explicit reference to the Union interest test when conducting an expiry review. Whilst the trade association appreciates “that the Commission does conduct such a test, it would be more appropriate, and would create greater legal certainty were this to be rectified. Of course, the failings of the current Union interest test need to be addressed before this is enacted. The closing paragraph of the guidelines also clearly notes that there is no limitation to the number of expiry reviews that may be conducted”. It wants this to be changed and believes that no more than two expiry reviews take place. “This should also come with a one year moratorium on the filing of a fresh complaint for an investigation against the same product from the same country”. Finally, “the association questions the value of the guidelines when the Commission has stated clearly that it is not bound to follow the conditions therein; this permits the Commission to use any method it deems necessary to reach a desired conclusion without being subject to any possible legal recourse. It is also disappointing that the Commission has chosen to retain current practice rather than offer any progress”.

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C. INJURY MARGIN

In total, 77 respondents commented on the Guidelines on the determination of the profit margin used in establishing the injury margin. The Union Producers were the largest group among these respondents (38%). They were followed by Trade Associations representing Union Producers (27%). The remaining (45%) was made up of nine smaller groups of which the largest three were the Trade associations representing Importers (8%), Union Producers and Importers (5%) and Other (8%).

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II.DETERMINATION OF THE PROFIT MARGIN

§ II.4 The majority of respondents did not agree with the statement in the guidelines on the target profit margin not necessarily being identical with the one desirable to ensure the survival of the Union industry and/or adequate return on capital. They stated that instead, the guidelines should read that "the normal profit is the minimum amount necessary to account for reinvestment in the industry”. Some importers and one Government Institution were of the opinion that the efficiency of the European Union manufacturers is not sufficiently assessed in the current method for calculating the injury margin. They feared that the method of calculation could benefit non-efficient Union producers.

III.METHODOLOGY TO DETERMINE THE PROFIT MARGIN

§ III.5 More than two thirds of the respondents (of which three quarters were Union Producers and Associations representing Union Producers) stressed the importance of taking into account all relevant costs (such as investments and capital employed), when calculating the non-injurious price.

§ III.6 The same respondents considered that the period of four years prior to the investigation period to calculate the profit margin is insufficient and should be extended. The concern raised by these respondents was that the profit margin may be impacted by dumping or subsidization earlier than four years prior to the investigation period.

§ III.9 Three respondents (i.e. one Association representing Importers, one respondent with both a Union Producer and Importer profile, and one Association representing both Union Producers and Importers) disagreed with the Commission having the option to "use any other reasonable method" for determining the Profit Margin, in the event that none of the methods described in the guidelines can be used. These respondents argued that "any other reasonable method" was too vague and should therefore be further defined. This would eliminate uncertainty as regards the methodology chosen by the Commission.

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IV.FURTHER CONSIDERATIONS

§ IV.12 In contrast to the aforementioned views, the majority of the respondents stated that the guidelines should explicitly mention the option for the Commission to use another method, if appropriate, besides basing the target profit calculation on the turnover. This latter group of respondents (mostly Union Producers) stressed that particularly for capital intensive industries it is important to incorporate all relevant costs in the analysis.

V.PROCEDURAL ISSUES

§ V.14 It was emphasized by one Union Producer that it is important that the Commission consults Union producers on the appropriateness of the target profit margin, while little over half of the respondents stated that it is unnecessary to have in the guidelines that interested parties have the opportunity to provide their views on the level of the profit margin. These respondents argued that such a statement in the guidelines is redundant, since all interested parties already have the possibility to present their views as provided for in the basic Regulation. However, when it comes to the methodology used, these same respondents were of the opinion that the guidelines should be more explicit on whether the method of calculation is subject to verification as well by all interested parties. Most of the respondents providing the aforementioned comments were Union Producers and Associations representing Union Producers, supported by a couple of Union Producers who also have activities as Importer and/or User. A few respondents (mainly Importers and one Government Institution) expressed the view that the Commission should aim at establishing the target profit through public and transparent sources and that calculations, formulas and data used should be made public in so far as possible.

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GENERAL COMMENTS

One Importer suggested having a system of disclosure of confidential information under some form of administrative protective order (APO). Such a system would, according to this respondent, increase the confidence in the conclusions following Trade Defence Investigations by the Commission. Some respondents (five Importers and one Government Institution) underlined that it is important to also examine factors not attributed to the dumped imports to come to a fair and correct injury margin. One respondent (association representing both Union producers and Trade association representing importers) wondered how, for example, price variations within an investigation period, costs allocation to a product mix and differences in product specifications for "a like product" are dealt with. Another respondent (Government Institution) remarked that business cycles and variations in exchange rates can have an influence on the profit margin, which should be taken into account when determining the target profit and injury margin. One Union Producer, who is also an Importer, commented that the entire concept of determining a target profit margin for a particular type of product or industry in a market economy is unconventional and argued that the concepts of target profit and reasonable profit are open to interpretation. An Association representing Importers questioned the value of the guidelines, since the guidelines will not be binding. This respondent also expressed disappointment in the fact that the guidelines describe current practice and do not propose any changes. However, it was underlined by two respondents (one being an Association representing Union Producers, the other being an Association representing both Union Producers and Importers) that the guidelines should in fact not introduce changes to the current approach for determining the injury margin, but should simply aim at describing the current practice. Another respondent (Importer) found the guidelines not sufficiently detailed and therefore, according to this respondent, the guidelines did not contribute enough to the modernisation of the Trade Defence Instruments (TDI). Concerns as regards the timing of the approval of the guidelines vis-à-vis the adoption of the legislative proposal was expressed by one respondent (an Association representing both Union Producers and Importers). Finally, one of the respondents commented that the guidelines describe a realistic approach to the determination of the target profit and injury margin, while another respondent underlined that an appropriate calculation of the injury margin is important to restore the conditions for the Union industry that will allow it to recover from dumping.

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D. ANALOGUE COUNTRY

A little over one third (34%) of all respondents (77) were Union Producers, though in addition to this, 9% belong to both the profile of Union Producer and another profile (i.e. Union Producer and Other (3%), Union Producer and User (1%) and Union Producer and Importer (5%)). The second largest group consists of Trade associations representing Union Producers (29%), which is followed by Other (9%), Trade association representing Importers (7%) and Trade association representing both Union Producers and Importers (6%).

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I.LEGAL BASIS

§ I.3 Regarding the paragraph on the determination of the normal value, three respondents (one Union Producer and two Associations representing Union Producers) were under the impression that the wording used in the guidelines (which is quoted from the basic Regulations) was more restrictive than the wording used in the existing Basic Regulations.

II.SELECTION CRITERIA

§ II.6 Over half of the respondents thought that the following sentence "It is for the institutions, whilst taking into account the possible alternatives, to use its best efforts to find a third country in which the prices for a like product are determined in circumstances which are as similar as possible to those in the country of export, provided it is a market economy country " should be removed and replaced by “It is for the Institutions to use their best efforts to consider a set of objective selection criteria and find a third country that meets them. These criteria include:…”. These respondents suggested placing the proposed sentence before paragraph 7, in which a non-exhaustive list of selection criteria is given. Over 80% of this group of respondents were Union Producers and Associations representing Union Producers.

§ II.7 Half of the respondents pointed out that the criteria on representativeness and the volume of domestic sales needed to be clarified. They were of the opinion that it is not clear from the current wording that the volume of domestic sales is generally considered representative if they account for at least 5% of the exports to the Union, since the word "Union" is missing. One respondent suggested defining in the guidelines detailed criteria for the exceptional cases (i.e. the volumes of domestic sales being lower than 5% of exports to the Union), whereby it needs to be determined whether the prices charged are still considered representative. This respondent also requested more guidance on the assessment of the size of the market as one of the selection criteria. According to this respondent, the market size of the analogue country should be equal to the one of the export country. Two other respondents made a similar comment stating that the guidelines should be clearer on the term of “size of the market”. This respondent also commented on candidate analogue countries having imposed trade defence measures on the imports of the product from the country under investigation; in the guidelines it is stated that this should not necessarily exclude its 21

selection as analogue country, as long as these measures comply with WTO rules. The aforementioned respondent wondered how it could be verified whether these trade defence measures are compliant with WTO rules. A few respondents (mainly Importers and Associations representing Importers) underlined that the level of development, income per capital, size of local producers, technology of production, etc. should be taken into account. A few respondents (two Associations representing both Union Producers and Importers, one Government Institution, one Importer and two with profile "Other") objected to the criterion as regards the extent of cooperation from local producers in the analogue country, since they feared that this criterion could lead to inadequate choices primarily based on willingness to cooperate with the Commission. One respondent added that when only one or a small number of companies in an analogue country take part in the investigation, the data submitted may not be representative and therefore, may not be suitable for the calculation of the normal value. This respondent also expressed concerns on producers in the analogue country having interest in high duties being imposed on imports from the non-market economy country. This respondent worried that this could lead to producers (in analogue countries) submitting data, which could artificially increase the normal value and lead to erroneous investigation results. Therefore, this respondent was in favour of removing the criterion on willingness to cooperate.

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III.OTHER CONSIDERATIONS

§ III.9 A few Importers commented that when only one local producer is willing to cooperate, this local producer cannot be related to one or more European Union producer(s). They were of the opinion that if there is any relation between the local producer and one or more EU producers, the country at hand cannot be chosen as an analogue country.

IV.PROCEDURES

§ IV.10 Several respondents suggested requiring complainants to provide at least 2 or 3 proposals for analogue countries, when submitting a complaint. These respondents (a mix of Union Producers and Importers) were of the opinion that this could help avoid disruptions later in the proceedings, should a change in analogue country be needed. A number of Importers and Associations representing Importers remarked that ten days for commenting on the analogue country provisionally selected in the initiation of an investigation is too short, because interested parties need (more) time to substantiate those comments with evidence.

§ IV.11 One respondent (a competition authority from a non-market economy country) commented that the proposal for an analogue country should clearly come from the Commission (as opposed to the complainant) and emphasized that the Commission should pro-actively gather additional information prior to deciding on an analogue country.

§ IV.12 Regarding a change in analogue country during the course of an investigation, some respondents requested that such a change is directly communicated to interested parties. This comment was made by both Union Producers and Importers.

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GENERAL COMMENTS

Two respondents (one Association representing both Union Producers and Importers, the other with profile "Other") considered that the guidelines should be nothing more than a reflection of current EU trade defence practices. It was stressed that the guidelines should reflect the objective of TDI (i.e. removing unfair trade practices) and should not reflect economic or political considerations. It was suggested by the same respondents to add definitions of "dumping" and "market economy" to the guidelines. One of the two respondents underlined that the TDI modernisation should serve as an opportunity to improve the transparency, the predictability and the efficiency of the instruments, especially by shortening the time currently needed for proceedings and the adoption of measures to avoid circumvention and retaliation from third countries. In contrast, another respondent (an Association representing Importers) questioned the value of the guidelines, since the guidelines will not be legally binding. Certain respondents proposed to add to the guidelines the option to base the normal value on companies from the non-market economy country concerned, if these companies received market economy treatment (MET). The respondents are of the opinion that in such cases, the data from these MET companies should be used, instead of data from an analogue country. Three respondents (two Associations representing Importers and one Union Producer which is also an Importer) argued against having a constructed normal value, as an alternative option, since in their view, normal value calculations in analogue countries should only be based on domestic prices or export prices to a third country. These respondents expressed concerns regarding the use of production costs in the constructed normal value, since to obtain these, there is a dependency on the willingness of such companies to cooperate with the Commission. These respondents stressed that differences in quality, brand names, production processes, production sales and technologies should be taken into account. One respondent (an Association representing both Union Producers and Importers) underlined that the guidelines are to reflect current practices only and should not introduce any substantial changes to the approach currently used by the Commission.

Disclaimer: This document does not present the official position of DG Trade or of the European Commission. It is designed to summarise the views of interested parties who gave comments on the draft guidelines. The suggestions in this document in no way prejudge either the nature or the form or content of any future action by the European Commission. 24