EUROPEAN COMMISSION Directorate-General for Trade

Brussels, 9 April 2003 Ref. 199/03

[Public] [[PPuubblliicc]]

Report for the 133 Committee –

Overview of third country trade defence actions (anti-dumping, countervailing and safeguard cases)

against the Community

OVERVIEW OF THIRD COUNTRY TRADE DEFENCE ACTIONS AGAINST THE

COMMUNITY

(STATISTICS UP TO 31 DECEMBER 2002 BUT COMMENTARY ON CASES AND TEXT IS

UPDATED UNTIL 15 MARCH 2003)

Contact:

Neil MacDonald Tel. 295.75.36 Stephen Gospage Tel. 295.73.98 Alberto Spagnolli Tel. 296.38.59

Leif Hein Jørgensen Tel. 295.58.60 Graciela Quintá Garcia Tel. 299.89.05

Report for the 133 Committee DG Trade.B.2. 28 March 2003

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Index

Page Introduction 3 Actions in the steel sector 5 A. United States 6 B. India 15 C. China 18 D. Central and Eastern European Countries (CEECs) 21 E. Russia and Ukraine 26 F. Turkey 29 G. Latin America 30 H. Australia 33 I. Other countries 35

Annexes Annex 1 Measures in force at end 2001 and 2002 38 Annex 2 Investigations ongoing at end 2001 and 2002 39 Annex 3 Definitive measures imposed in 2002 40 Annex 4 Provisional measures imposed in 2002 41 Annex 3 Investigations in progress end 2002 42 Annex 6 Summary of all definitive measures in force

on 31 December 2002 44 Annex 7 Statistics of Member States affected by definitive measures

on 31 December 2002 49

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Introduction Purpose The purpose of this report is to provide an overview of current third country commercial defence actions [anti-dumping, countervailing and safeguard cases] against the Community. The Report is presented by country, focusing on the most notable of these cases (see Index to this Report, which also specifies the information contained in the Annexes). Overall trends and recurring problems Compared with previous years (see last Report dated 30 April 2002), the year 2002 confirmed the increasing trend in the number of commercial defence cases being opened against Community exporters. The number of definitive measures against the Community has increased from 160 at the end of 2001 to 174 at the end of 2002. It should be noted that most third countries usually initiate against individual Member States but some countries initiate against the Community as a whole. The US had the largest number of measures in force (47) against the Community at the end of 2002, followed by India (26). India, at the end of 2002, had the largest number of on-going investigations (11) against the Community, followed by Russia (8). As already noted in previous reports, more and more countries, mainly developing and “transition” countries, are becoming active users of commercial defence instruments. In this respect, the increased use of the safeguard instrument continues to be a particular concern. The safeguard instrument, which contrary to the anti-dumping and anti-subsidy instruments counters “fair trade”, is viewed as easier to use and demands less expertise and resources than the other instruments and thus for certain new users, e.g. developing countries and countries such as Russia and Ukraine, it is the most frequently used instrument. It is also more “cost effective”, as it covers all imports rather than those of selected countries. Recent WTO panels (most of them at the initiative of the Community) have, however, confirmed very high standards for safeguards and it is to be hoped that this will reduce the non-justified use of this instrument. Some of the larger developing countries continue to make considerable use of the other commercial defence instruments (anti-dumping and anti-subsidy) and here the standards applied often appear to be low, both in terms of initiation and the subsequent investigation. The United States continues to be a particular problem as demonstrated by the significant number of panels it has lost in cases involving all three commercial defence instruments in the past two years. Although its investigations are very open, they are also very costly and burdensome for exporters. Recurring problems include weak initiation standards and questionable investigation practices, which are in large part driven by the lobbying power of the domestic industry. Although there are variations from country to country, some problems can be identified which are common to these third country cases. On the procedural level, the basis for

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initiating an investigation is often low and there is a recurring problem of lack or insufficient disclosure of information by the investigating authorities, thereby making it nearby impossible to analyse and evaluate on what grounds the investigation was opened in the first place. This lack of disclosure is even more apparent and serious regarding the justification of imposition of measures or the rejection of evidence submitted by Community exporters. Some industries have also pointed to the fact that confidentiality rules are not well respected by some countries with the result there is a a strong disincentive for Community exporters to co-operate, especially in anti-dumping investigations. As to the substance of these third country investigations, the most common deficiency noted is the lack of in-depth analysis of injury and causality, in particular the neglect of “other factors” which may, and clearly often are, causing injury. This means that the measures imposed are frequently disproportionate to the injury allegedly suffered by the domestic industry. As a result of these deficiencies, interested parties are prevented from properly defending themselves in these cases. There are also indications that some countries apply trade defence instruments as a form of retaliation against cases legitimately opened by the Community. Actions in the steel sector Any report on trade defence activity for 2002 would be incomplete without a special mention of the steel sector. In March 2002, the United States imposed safeguard measures on imports of fourteen steel products. These measures, which affected billions of dollars in trade, put a huge strain on the world steel market impacting mainly on the Community, Japan, Korea, Australia, New Zealand and, to a lesser extent, Russia, China, Brazil, Norway and Switzerland. As was to be expected the measures gave rise to fears of huge trade diversion and as a result, within a very short time, other WTO Members, the Community included, were forced to take action. The Community considers that the US measures are not in accordance with the WTO Safeguard Agreement and are in fact a protectionist measure to help a domestic industry which has failed to restructure and adjust to increased competition. Consequently, a number of WTO Members challenged these measures including the European Communities, Japan, Korea, the People’s Republic of China, Switzerland, Norway, New Zealand and Brazil. The panel decision is expected in April 2003. In addition, the Commission participated in all other safeguard and anti-dumping cases initiated by other WTO Members as a result of US measures, with a view to ensuring that any action was justified and was the minimum necessary to avoid any trade diversion caused by the US measures. The Community itself, when taking measures following the US action, decided that they should be as narrow as possible in terms of product scope and should not roll back the import levels prevailing prior to the said measure. The Commission intervened strongly with all other countries having taken similar actions to ensure that the same principals were adhered to. The summary table which immediately follows this section sets out, in tabular form, the various world-wide actions on steel which are considered to be as a direct result of the US safeguard measure. These are described in more detail in the specific country parts of the report.

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TRADE DEFENCE ACTION ON STEEL - DOMINO EFFECT FOLLOWING THE US STEEL SAFEUARD ACTION

- SUMMARY TABLE- TIMETABLE

COUNTRY PRODUCT COVERAGEInvestigation Initiated Provisional Measures Definitive Measures

(actual or planned)

EU trade affected

(estimate)

United States Flat/Pipes & Fittings/Long/Stainless/Tin Mill 22/06/2001 none

Increased tariffs Slabs - Tariff rate quota

20/03/2002 (several products excluded)

€1700m

Bulgaria Flat (hot+cold rolled, coated)/Long (bars+rods) 26/07/02 none €1m

Canada Various Flat/Long/Tubular 21/03/2002 none 5 of 9 products found to be injurious/final decision still pending €100m

China Various Flat/ /Stainless 20/05/2002 Tariff Rate quota 24/05/2002

"EU-type" TRQ - 20/11/2002 Exclusion process ongoing €138m

Chile Hot-rolled coils and sheets/Bars and rods 05/04/2002 none 16/07/2002, Tariffs €3m

Czech Republic* Welded tubes and pipes 06/03/2002 none €53m

Czech Republic Flat (hot+cold rolled, not plated or coated)/Long (excluding wire)/Tubular 28/08/2002 none €146m

Hungary Flat(hot+cold rolled, including plated, coated sheets)/Long(including wire)/Tubular (welded only)/cloth, grill, netting and fencing) 22/05/2002

"EU-type" TRQ (avg, 1998-2000) in force since 03/06/2002

EXPIRED on 18.12.02

Proposal for definitive measures ("EU-type" TRQ) on 7 of 15 products

presented to Commission

€72m

India NOTE: AD Action but expressly stated by India as resulting from

US action Flat (Hot + rolled cold/ electrical sheet/ plate/ coil)

25/09/2002 none €40m

Indonesia Flat (hot +cold rolled coil and plate) November 2002 - Increased tariffs within bound rates (not a safeguard action -) €21m

Malaysia Certain steel products November 2002 - Increased tariffs within bound rates (not a safeguard action) €22m

Mexico Certain steel products Increased tariffs to bound rates (not a safeguard action - does not apply to EU) none

Poland Pig iron/Flat (hot+cold rolled, galvanized, organic coated)/Long (excluding wire)/Tubular (seamless+welded) 08/06/2002

"EU-type" TRQ. In force for 200 days since 19/08/02 - on 10 out

of 12 products investigated

"EU-type" TRQ - 08/03/2003 applies to 8 of 12 products investigated.

(large number of products excluded by decision 21/01/2003)

€359m (includes products under

exclusions thought to be substantial)

* Unsure if this is related to US action 17 March 2003

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A. UNITED STATES 1. Introduction At the end of 2002, the US had a total of 47 trade defence measures in force against imports from the Community. The majority of the measures take the form of anti-dumping duties (31), while 13 are countervailing measures and 3 are safeguard measures. The figure at the end of 2001 was 41, 43 at the end of 2000 and 61 at the end of 1999. The drop in 2000 was due to the expiry of a number of measures under the “sunset provisions”, which were introduced in the Uruguay Round and which the US began to implement with effect from 1 January 2000. During the year 2002, a total of 2 new investigations (1 anti-dumping and 1 anti-subsidy) were opened while 6 measures were imposed (3 anti-dumping duties, 2 countervailing measures and 1 safeguard measure). It should be noted that the steel safeguard measures imposed in March 2002 concern several separate steel products. If these are taken individually, the number of safeguard investigations and measures is much higher, i.e. 14. This compares with 9 initiations and 3 definitive measures in the year 2001. The US continues to maintain its position as the major user of trade remedies to protect its domestic producers from alleged unfair trading practices or rising imports in the case of safeguard action. Furthermore, it has also become clear that a number of these measures raise questions as to their compatibility with international rules. This resulted in an increasing number of WTO dispute settlement cases against specific measures (such as for steel) as well as against more general legislative provisions such the Byrd Amendment under which the anti-dumping or countervailing duties collected are distributed to domestic complainants. This includes the US steel safeguard measures which was addressed extensively in the previous report, and the developments since are set out in the section of the report covering US dispute settlement cases. A major problem is that the US has so far not implemented panel rulings either in spirit or in fact. For instance, in the British Steel “privatization” case, it did not comply with the panel and Appellate Body’s ruling, but simply created a new methodology which was equally WTO-inconsistent and was once again condemned by the WTO Appellate Body in December 2002 (see below for more details). This attitude appears designed to prolong the process and to prevent Community exporters from obtaining appropriate relief. Moreover, when a particular practice is deemed WTO incompatible by a panel, as was the case with the EC’s practice of “zeroing” in the Bed Linen panel, the US does not feel bound to correct the practice in question if it is not a party to the case. The US view appears to be that another panel has to be brought. It appears that the issue of “zeroing” directly or indirectly affects most US anti-dumping cases. As regards the sectors of the European industry that have been most affected, the steel industry was and remains the main target. Other industries largely affected were the chemical and agricultural sectors. 2. Some notable cases This section addresses the most important cases which the US has opened recently and where the Commission and Member States have been active in defending European exporters.

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Anti-dumping investigation on sulphanilic acid from Portugal

On the 8 November 2002, the US imposed definitive anti-dumping measures of 74.14% on imports of sulphanilic acid from Portugal. The investigation was initiated in October 2001, and in the preliminary determination a dumping margin of 75.52% was established. In the final determination changes have been made to the dumping calculation and the dumping margin was found to be 74.14%. The main issue followed by the Commission related to the Department of Commerce (DOC) cost allocation methodology, notably the depreciation period and SG&A. The Community producer requested DOC to adjust the depreciation period for calculating constructed normal value, because the accelerated depreciation used by the company was not consistent with the average useful life of assets. The company’s arguments (small production of the product under investigation, start-up situation) were apparently accepted during the on-spot investigation and DOC asked the company to present a 10 years depreciation scenario. However, despite the presentation of this scenario and various arguments, at the time of the final decision, no adjustment was made in order to be consistent with the assets’ average useful lives. This practice caused a significant increase in cost of production and consequently the constructed normal value. The depreciation methodology applied in this case could be advantageous in case of an administrative review, since the high accelerated depreciation charge will soon disappear, thus reducing normal value considerably. The company is considering to request an administrative review, in the medium term, when it will be likely that its costs have decreased. The Commission will support any company’s request for an administrative review and continue to monitor this case, notably regarding US cost allocation practice.

Anti-dumping and anti-subsidy investigations on low enriched uranium from France, Germany, the Netherlands and the United Kingdom

In December 2000, the USA opened two parallel highly controversial anti-dumping and anti-subsidy investigations against low enriched uranium (LEU) from France, Germany, the Netherlands and the United Kingdom. The initiation of these investigation was problematic since the petitioner USEC (the US enrichment company) did not appear to have “standing” to lodge a complaint. It is essentially a sub-contractor which processes the product for US electricity utilities, which were opposed to the investigation, and could be viewed as a service provider rather than a producer of goods. This “goods vs service” issue is in front of US Courts and a decision is expected during 2003/2004. On 13 February 2002, the US DOC imposed definitive countervailing duties of 12.15% on imports from France (company Eurodif) and of 2.23% on imports from UK, Germany and the Netherlands (company Urenco). DOC also imposed definitive anti-dumping duties of 19.95% on imports of LEU from France, but terminated the case against Germany, UK and the Netherlands because of de minimis dumping margins. The Commission followed both US investigations closely and intervened several times during the process, but unfortunately, the end results were disappointing since the main concerns expressed by the Commission do not appear to have been taken into account. The Commission raised concerns in particular as regards the standing of the petitioner to file a complaint, as explained above. In addition, the Commission strongly criticised the treatment by the US Department of Commerce of the price of electricity used in the 8

enrichment of uranium both for the purposes of the calculation of the amount of the subsidy and for establishing the constructed normal value used in the calculation of the dumping margin. The Commission also pointed out during the investigation that Urenco had paid back part of the alleged subsidy and that the repayment should have been taken into account when assessing the benefit conferred to the company; the “international consortium provision” also posed a problem for Urenco. The International Trade Commission's (ITC) definitive findings on injury also involved the cross-cumulation of dumped and subsidized imports, which appears not to be permitted by WTO rules. As regards injury, ITC had not properly analysed the effects of other factors, notably Russian imports, on the domestic industry. After the US decided to impose measures, the Commission has examined with the Member States options for further action, including at WTO level. However, any further action has been put on hold pending the outcome of the “goods vs services” issue in the US courts. An administrative review of the measure against France has been requested and will start in March 2003.

Anti-dumping investigation on stainless steel bars from France, Germany, Italy and the United Kingdom; anti-subsidy investigation on same product from Italy

On 24 January 2001, the US initiated an anti-dumping investigation against imports of stainless steel bars from France, Germany, Italy and the United Kingdom. In parallel, the US launched an anti-subsidy investigation against Italy. The Commission intervened at several stages in both proceedings to defend the interest of the Community. On 15 January 2002, the US DOC issued its final determination in the case of the anti-subsidy investigation on stainless steel bars from Italy. The result was relatively satisfactory. With the exception of one ex-Ilva firm privatized in 1994 (Cogne), for which the countervailing duty is 13.7%, the countervailing rate of all the companies under investigation was determined to be either zero or de-minimis. It should be noted that the “subsidies” for Cogne are based on the WTO inconsistent “same person” methodology on privatization and therefore should not have been countervailed. On 7 March 2002, the US issued its final determination in the anti-dumping case and imposed duties ranging from 3.9% to 71.83% for France, from 4.17% to 32.32% for Germany, 2.5% to 33% for Italy, and from 4.48% to 125.77% for the UK. The principal European stainless steel bar producers are subject to relatively modest duties. In fact, the anti-dumping margin for the French company Ugine (Arcelor Group) is only 3.9%, for Corus (UK) 4.48% and for the Italian producer Valbruna 2.5%. The 33% high duty for the Italian company Cogne (the largest producer of the product concerned in Italy) was due to non-cooperation. Also, three of the four German producers received a quite high anti-dumping margin. The Commission has raised its concerns at the US application of the zeroing methodology in this case, which was already found to be WTO inconsistent in the “bed linen” panel. In addition, this product is subject to a 15% duty in the context of the Section 201 steel safeguard measures. The Commission has urged the US to remedy what amounts to a double protection of domestic producers and to take appropriate actions in the context of dumping calculations in forthcoming administrative reviews.

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Anti-dumping investigation on certain cold-rolled carbon steel products from Belgium, France, Germany, the Netherlands, Spain and Sweden; anti-subsidy investigation on same product from France

On 18 October 2001, the USA decided to open this anti-dumping case against 20 countries including the following Member States: Belgium, France, Germany, the Netherlands, Spain and Sweden. In parallel, the US launched a countervailing case against imports from France. Irrespective of any alleged dumping or subsidy practice, the case was of particular concern since the US industry in question was already heavily protected via the steel safeguard measures applied in March 2002. This point was made strongly to the US authorities. Eventually, and although DOC found dumping to exist for several Community exporters, the outcome was positive: the ITC found that imports from all the countries included in the scope of the investigation did not cause injury to the US domestic industry based on the fact that these products were already subject to 30% additional tariff imposed in the context of Section 201 safeguard measures. The ITC concluded that the safeguard additional duties had already offset the injury caused by imports from these countries. Although this case in the end turned out well for the Community companies, the Commission is concerned that this case was started in the first place given the existence of the safeguard protection. The cost for Community exporters in defending themselves was considerable.

Anti-dumping investigation on oil country tubular goods (OCTG) from Austria, France and Germany; anti-subsidy investigation on the same product from Austria

On 18 April 2002, the US initiated a new anti-dumping investigation against Austria, France and Germany. In parallel, it launched an anti-subsidy case limited to Austrian imports. As regards the subsidy case, DOC decided to initiate the investigation despite the fact that during consultations held on 12 April 2002, the Community clearly demonstrated that all the alleged subsidies either did not exist or had already expired. The DOC chose to ignore the compelling arguments made by the Community and Austria during pre-initiation consultations. The main arguments against the opening of these cases, however, was the lack of injury. At the time of the Section 201 safeguard investigation on steel, OCTG were excluded from measures. The OCTG industry in the US was found by ITC to be not even threatened with serious injury by imports from all sources. The Commission therefore argued that the initiation of such an anti-dumping case could not be justified. Eventually, the ITC, in its preliminary examination, confirmed its previous findings in Section 201 and determined, on 10 May 2002, that there was no reasonable indication of material injury. As a result of these negative determinations, the investigations were terminated.

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Anti-dumping and anti-subsidy investigation on carbon and alloy wire rod from Germany

Another successful result was obtained in a case concerning imports of wire rod from Germany. On 2 October 2002, the US ITC issued its final determinations on injury on the above case. ITC found that imports from Germany were negligible and therefore they could not have caused injury to the US domestic industry, and the case was terminated without measures. This nullified US DOC’s positive findings when imports from the two German companies had been found to be subsidised and/or to be dumping the US market. The Commission had strongly criticised these findings which were clearly inconsistent not only with the SCM and AD Agreements, but also with the US own trade law and practice. The Community, during pre-initiation consultations, had demonstrated that import levels were negligible (well below de-minimis), a view eventually supported by the US in its final decision. Therefore, the initial US decision to open this case looks even more regrettable, since it has imposed a heavy and unjustified burden (money and time spent) on the companies subject to the investigation. Cases subject to WTO dispute settlement procedures As mentioned in the introduction, the Community has resorted to dispute settlement action involving several US measures against the Community.

Safeguard measures on steel (201 safeguard) (DS248)

On 5 March 2002, by Presidential Proclamation No 7529, the US decided to impose safeguard measures on many steel products which became effective as from 20 March 2002. For almost 70% of the Community exports to the US, these measures take the form of a tariff increase of 30% and consequently imply a substantial closing of the US steel market. The Community, in conjunction with a number of WTO Members (Korea, Japan, China, Switzerland, Norway, New Zealand and Brazil) initiated WTO dispute settlement proceedings against the US measures on 7 March 2002. A panel was established on 3 June 2002. The Panel Report, scheduled to be released in April 2003, is expected to rule against the US steel safeguards, where the US flatly repeated most of the basic flaws which have already lead to the condemnation of the 6 US safeguard measures brought to WTO so far. Taking into account a likely appeal, the final WTO verdict is not expected before September 2003. In parallel, the Community exercised its WTO right to suspend “substantially equivalent concessions” to re-balance the adverse trade effect of the US measures. Accordingly, the Community notified to the WTO on 14 May a list of products imported from the US and worth more than € 2 billion on which additional duties will apply automatically once the US steel safeguards have been condemned by the WTO. On 13 June 2002, the Council unanimously adopted a Regulation to that effect. In addition, WTO rules provide for an “immediate” re-balancing action against the US measures, to the extent that they have not been based on an absolute increase in imports. In this context, the Community notification to the WTO and Regulation also comprised a shorter list of products worth € 379 millions for which it was envisaged to impose

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additional duties even before WTO rulings, subject to a separate decision by the Council on the basis of a proposal from the Commission. However, since then the US decided to exclude certain steel products from the scope of its safeguard measures. Product exclusions in favour of Community exporters amounted to nearly $ 650 million, i.e. around 30% of the $2.3 billions of Community steel exports hit by the US measures. As a result, compared to the $ 4 billion of total Community steel exported to the US in 2001, almost 60% of total Community steel exports now escape the US measures. In this context, following the recommendation from the Commission, the Council decided, on 30 September 2002 not to apply the “immediate” re-balancing measures at this stage. The US exclusion process started again in November 2002, for decisions to be taken in March 2003. In addition, a mid-term review was announced by the ITC on 14 March 2003. The ITC’s report to the President is due by 19 September 2003, i.e. approximately the same date at which the final WTO ruling is expected. Public hearings are scheduled for July 2003. The Community will of course carefully monitor this process to attempt to ensure that legitimate requests from Community exporters are satisfied.

Privatisation methodology (countervailing duties) (DS212)

This case is the follow-up of a previous WTO case “Lead Bar from UK” also known as “British Steel” (DS 138). In the British steel case, the AB found, in May 2000, that the US change in ownership methodology was WTO inconsistent because the investigating authority did not evaluate the nature of the privatization. The AB also found that a privatization at arm’s length and for fair market value eliminates the benefit to the privatized firm of all the subsidies previously bestowed. The US, instead of implementing the WTO ruling, refused to revise the previous cases where the change in ownership methodology was used and, in January 2001, developed a new methodology, the so-called “same person” approach, to be applied to all the new investigations (or reviews). This new methodology was also clearly WTO-inconsistent, and after a long series of meetings and discussions with the US which failed to lead to any change in their approach, the Community had no choice but to request a new Panel. The complaint brought by the Community in this case concerned the methodologies, the US law governing changes in ownership (Section 1677(5)(F)) and the decision of the US authorities to impose or maintain countervailing duties in 12 cases involving the following firms: Usinor and GTS (France), Dillinger (Germany), Corus (United Kingdom), AST, Ilva and Cogne Acciai Speciali (Italy), SSAB (Sweden) and Aceralia (Spain) The panel was established on 10 September 2001. The Panel ruled (31 July 2002) against the US on all counts. It confirmed the “British Steel” WTO ruling that a privatization at arm’s length and for fair market value eliminates the benefit of prior subsidies. In these circumstances, any countervailing duty against the privatized firm is illegal. It then found that both DOC methodologies are WTO incompatible, because they both preclude an examination of the nature of the privatization. Furthermore, the US legislation was found to be WTO-incompatible. The AB (9 December 2002) substantially confirmed the Panel ruling. It found that the US acted inconsistently with the SCM agreement, by imposing and maintaining 12 countervailing measures against privatized European steel companies without

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determining whether a benefit continues to exist. The AB confirmed the panel’s findings against the two methodologies, but reversed the Panel’s ruling on the US legislation, finding it not mandatory and therefore not in breach with the SCM Agreement. Regarding implementation, the Community has requested the US to replace without delay its change in ownership methodology with a new and fully WTO compatible approach. The Community is now in discussions with the US on a reasonable period of time under Article 22 of the DSU.

Safeguard measures on line pipe and wire rod (DS 202/214)

On 10 September 2001, a WTO panel was established at the Community’s request in respect of two safeguard measures applied by the US against imports of line pipe and wire rod. They have in fact been in force since March 2000 but dispute settlement action was delayed for some time while a number of discussions took place with the US to try and find an amicable solution. By the summer of 2001 little progress had been made and a panel was requested in August 2001. The wire rod case was successfully concluded by an agreement in November 2001. This measure expired on 15 March 2003. A separate panel on the US measure on line pipe had been established on 23 October 2000 at the initiative of Korea. The Community participated in that proceeding as third party. The Community challenged both US measures on a number of grounds, relating inter alia to the exclusion of Canada and Mexico from being subject to remedy, the lack of a finding of “unforeseen circumstances”, the lack of increasing imports and the absence of injury caused by imports, and the disproportionate level of the measures imposed. The Korean panel concluded that the US measure was in breach of the WTO Agreement on Safeguards on several grounds, largely reflecting the grounds on which the Community had based its own panel request. Both the US and Korea appealed the panel ruling. On 15 February 2002, the Appellate Body confirmed most of the panel findings and declared the US measure incompatible with WTO safeguard rules. Talks resumed between the US and Korea as well as between the US and the Community in order to settle the case. The Community decided to suspend its own panel proceeding pending the result of these consultations. Following an agreement between US and Korea, the US decided on 28 August 2002 to modify their measure in raising the quota for Korean imports. The quota for Community exporters was not modified but this was considered to be acceptable given the changed market circumstances, on condition that the US respect their commitment to let the measure expire at its original deadline, i.e. on 1 March 2003. This commitment has been respected.

Countervailing measures on corrosion-resistant carbon steel flat products from Germany (DS213)

The complaint brought by the Community in this case concerned the decision of the US authorities to continue the countervailing duties for corrosion-resistant steel products from Germany. This decision was based on the DOC's final determinations of 2 August 2000 that subsidisation would be likely to continue at a rate of 0.54%. The original definitive measure dated back to 1993, prior to the entry into force of the WTO. The

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original countervailing duty rate was 0.60%, which would have been de minimis under the SCM Agreement. The Panel held that the 1% de minimis threshold provided for in Article 11.9 of the SCM Agreement for new investigations equally applies to sunset reviews and that, therefore, the US law, which provides for a de minimis threshold of 0.5% in sunset reviews, was in breach of the SCM Agreement. The Appellate Body, however, reversed this finding. The Panel and the Appellate Body furthermore found that Investigating Authorities are entitled to self-initiate a sunset review without any evidence. Nonetheless, the Panel held that the likelihood determinations in the case at hand did not rest on an adequate factual basis. This finding was not appealed by the US. The Panel and Appellate Body reports were adopted on 19 December 2002. Regarding implementation, the Community is now in discussions with the US on a reasonable period of time under Article 22 of the DSU.

The Dumping and Subsidisation Offset Act (DS217/234) On 28 October 2000, the US Congress enacted the Dumping and Offset Act (CDSOA – also known as the Byrd Amendment). According to this legislation, proceeds of anti-dumping and countervailing orders are redistributed to the domestic petitioners. The Community, with a large number of other WTO members, considered that this legislation was incompatible with Article 18(1) of the Anti-dumping Agreement and with Article 32(1) of the Agreement on Subsidies and Countervailing measures, since it constitutes a specific action against dumping or subsidisation which is not permitted by the WTO agreements.

Along with a number of other countries, the Community initiated WTO dispute settlement proceedings against the US, case (WT/DS217/5) and (WT/DS234/14). A panel was established on 23 August 2001. On 16 September 2002 the final panel report was published. The Panel upheld the EC arguments that the CDSOA was a non-permitted action against dumping and subsidization, and that it violated Articles 5.4 of the AD and 11.4 of the SCM Agreements on standing by providing an incentive to domestic producers to support complaints. Consequently, the US was asked to bring the CDSOA into conformity by repealing the CDSOA.

The US appealed with the panel’s findings on 18 October 2002. On 17 January 2003, the AB upheld the panel’s ruling that the CDSOA was a non-permitted response to dumping and subsidization. Regarding implementation, the Community is now in discussions with the US on a reasonable period of time under Article 22 of the DSU.

Anti-dumping and countervailing measures on cut-to-length plate and corrosion-resistant carbon flat products (DS262)

In 1993 the US imposed definitive anti-dumping and countervailing duties on imports of cut-to-length plate from Germany and on import of corrosion-resistant carbon steel flat products from Germany and France. Following a sunset review, the US found that revocation of the anti-dumping and countervailing duty orders would be likely to lead to continuation or recurrence of dumping, countervailing subsidies and injury. Therefore, it was decided to maintain, for a further 5 years, the original duty orders issued in 1993. The US findings were in practice based on an in-built presumption that dumping, subsidy and injury will continue or recur, rather than on a positive determination. With regard to

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injury, the case turned on ITC’s refusal to consider significant changes of circumstances since the original investigation, notably the increased integration of the Community market, leading to large fall in export potential. Thus, the likely impact of German and French exports on the US industry was assessed cumulatively with imports from all countries subject to the same initial order. In this particular case, had conditions for cumulation been addressed and German and French imports been analysed on their own, it is highly unlikely that German and French imports would have been found to lead to the continuation or recurrence of dumping, subsidy or injury, and the case would probably have been terminated. The US recourse to cumulative assessment of the likely impact of exports on the domestic industry has become a recurring problem which prevents Community exporters escaping from duties in spite of the fact they have changed their behaviour. In view of the important issues arising in this case, dispute settlement consultations were requested with the US and a first round of consultations was held in September 2002.

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B. INDIA 1. Introduction At the end of 2002, India had a total of 26 trade defence measures in force against imports from the Community. The majority of the measures take the form of anti-dumping duties (23) while 3 are safeguard measures. This compares to 19 measures in 2001, 14 measures in 2000 and 6 measures in 1999. During the year 2002, a total of 11 cases were opened (10 anti-dumping and 1 safeguard) and 9 measures were imposed (8 anti-dumping and 1 safeguard). This compares to 9 initiations and 5 measures imposed in 2001. As regards the sectors of the European industry that have been affected, the chemical industry is the main target, followed by the steel sector. India has, in recent years, sharply increased its use of trade defence measures and it is now one of the major users of the commercial defence instruments. On a world-wide basis, India has, since 2001, overtaken the US in terms of initiations of new anti-dumping cases. At the end of 2002, India had the largest number of on-going investigations against the Community. Most of those cases would appear difficult to justify given the very high import protection that already exists in that country. India still maintains high import tariffs for many products, which in certain cases would seem to have the perverse effect of forcing foreign companies to dump in order to enter the market, with the result of exposing them to anti-dumping actions. This high import protection is making the Indian industry very uncompetitive. In fact, the very high amounts of duty imposed, which are usually set at levels which reflect Indian cost of production, confirms this. Most of the Indian measures also raise questions on their compatibility with international rules both on procedural as well as substantial grounds. Indian actions are, in nearly all cases, only affecting limited trade volumes from the Community, due to the high import tariffs applicable. In spite of this “natural” weakness, which should normally lead to a more detailed investigation than normal, Indian injury findings often lack any real depth. In nearly all cases the causation analysis is rather cursory with only a perfunctory attempt made to link the injury to imports. Also, there is usually no investigation on factors other than imports which may have been the real cause of injury such as excess capacity, inefficiencies, product quality, declining demand, etc. These are normally referred to briefly alleging that no evidence had been produced to substantiate such factors whilst ignoring the fact that the onus is on the investigating authority to prove its case. Finally, Indian proceedings appear to lack the required openness and transparency in that disclosure documents and public notices lack most of the details which would be necessary to review dumping and injury findings. Often, confidentiality has been invoked for this absence of detail but in fact this cannot absolve the Indian authorities from the requirement to make available to the parties the basic information, in indexed form if necessary.

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2. Some notable cases Anti-dumping duty termination on catalysts from Denmark

On 17 January 2002, India initiated a sunset review of the definitive measures imposed in 1997. These initial measures were already in apparent breach of WTO standards on several grounds. In addition, and strangely enough, the review covered products for which no definitive measures had been imposed. This is a case where the Commission has been very active in recent years, as the original Indian decision to impose measures was very controversial, both in relation to the dumping calculation and the injury findings which were extremely weak. During the current review the Commission intervened at several stages with the Indian authorities to express its concerns and to invite the Indian authorities not to renew measures in this case. The Commission co-operated closely with the Danish exporter, which spent considerable efforts to defend itself throughout the procedure as well as resort to the Indian courts. After a high level intervention by the Commission, India eventually decided to terminate the case on 19 September 2002. This was a very welcome outcome for the Community and for the Danish exporter concerned.

Anti-dumping investigation concerning cold rolled flat products of stainless steel from the Community

On 21 August 2001, India initiated an anti-dumping investigation on cold rolled flat products of stainless steel from, inter alia, the Community. On 19 October 2002, India concluded its investigation by imposing definitive anti-dumping duties ranging from 50% to 90%. The Commission intervened with the Indian authorities on several aspects of this case. Firstly, the Commission noted that, as a general point, Community exporters selling in India face 40% ordinary import tariffs. Under these circumstances, sales at dumped prices were unavoidable because the export price had to be low enough to take account of the fact that a cost of 40% is added upon importation. However, high import tariffs should make it more difficult to establish that imports cause injury to Indian producers, because the duty-paid price of these imports will necessarily tend to be high. But, in this particular steel case, undercutting was alleged despite the existence of the 40% import tariffs. In fact, the non-injurious prices established by India found that duties exceeding 50% were necessary to remove injury for the Indian producers. These duties together with the 40% import tariffs means that prices in India are very high and must raise questions about the efficiency of the Indian producers. In a case like this where it is apparent, as just explained, that other factors and not imports must be the causes for the alleged injury suffered by the domestic industry, it is regrettable that the Indian investigation has made no attempt to identify any such factors. The Commission is still examining this case with a view to deciding whether further action, including at WTO level, would be warranted.

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Anti-dumping investigation concerning hot-rolled coils, sheets, strips and plates from the Community

Another steel case was initiated by India on 25 September 2002 concerning imports of hot rolled coils, sheets, strips and plates originating in the European Community and 7 other countries. The investigation concerns imports with a combined market share of only 3%. It seems therefore at least questionable that Indian domestic producers can be suffering material injury from such a small percentage of imports, when they already benefit from ordinary tariff protection at over 40%. In addition, by choosing an investigation period of 18 months ending one year prior to initiation, India disregarded the recommendation by the WTO Committee on Anti-dumping Practices regarding the periods of data collection for anti-dumping investigations which explicitly establishes that “the period of data collection for dumping investigations normally should be twelve months […] ending as close to the date of initiation as is practicable”. It is difficult to avoid the view that India selected this out-of-date period in order to maximise dumping and injury findings. The case also raises serious concerns regarding the product scope, with very distinctly different products all subject to a single investigation. In fact, each of those different products should have their own separate dumping and injury investigations. Although provisional findings are still to be communicated to interested parties the Commission services are analysing this case in detail and will closely monitor its out-come.

Anti-dumping investigation concerning X-ray baggage inspection multi energy systems from the Community

The Commission is also closely following the anti-dumping investigation initiated by India on 15 April 2002 regarding X-ray baggage inspection multi energy systems from the Community. The complaint was lodged by the sole Indian company selling these machines, which already benefits from 30% ordinary tariff protection. This company already had low capacity utilisation rates even when imports were practically non-existent. Thus it seems difficult to argue that injury is being caused by imports. It has also been alleged that this investigation was initiated when a considerably important tender was about to be launched by the Airport Authority of India for the procurement of such machines. Although no provisional measures have been imposed so far, the Commission is monitoring this case in co-operation with the exporters concerned.

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C. CHINA 1. Introduction 2002 was China's first full year as a WTO member and the first time that it was obliged to comply with WTO rules in its trade defence actions. On 1 January 2002, China implemented new anti-dumping and safeguard legislation in order to meet with their multilateral obligations. This legislation has been examined in the Transitional Review Mechanism in the context of the WTO in order to ensure that it is WTO compliant. In addition the Commission has followed the Chinese cases closely in order to ensure that the instruments are applied correctly. Any proceedings initiated after 1 January 2002 were done so under the new legislation. During 2002, a total of 3 investigations (2 anti-dumping and 1 safeguard) were opened against Community exporters. It should be noted that China initiated a total of 9 anti-dumping cases overall in 2002 representing an increase of 33% over 2001 levels. By the end of 2002, a total of 2 trade defence measures were in force against imports from the Community (1 anti-dumping and 1 safeguard), compared to none in 2001. It should be noted that the safeguard measures in force concern five separate steel products, and should therefore be counted as being five separate measures. While the safeguard measures were applied under China's new legislation, the anti-dumping measure on methylene chloride was imposed under its old legislation. In fact, the experience with China is that they are making efforts to apply WTO standards in their trade defence instrument cases. Nevertheless, there are still problems with certain aspects of their practices and their system is still somewhat opaque and disclosure needs to be improved. 2. Some notable cases Safeguard case on steel

In its first ever safeguard case, China imposed definitive safeguard measures on five steel products with effect from 20 November 2002. The products were non-alloy hot-rolled sheets and coils; non-alloy cold rolled sheets and coils; organic coated sheets; non-grain oriented electrical sheets; stainless non-alloy cold rolled sheets and coils. For three of the five products there are specific quota allocations for the main exporting countries. Germany is the only Community Member State to benefit from a country specific quota for the stainless steel products. For the remaining two products the quotas are allocated on a first-come-first served basis. The quotas will be increased in the second and third years by amount ranging between 3% and 15%. Duties ranging between 10.3% and 23.2% (weighted average 18.26%) will be applied to imports above the quota depending on the product and these duties are set to reduce in the second and third years. The Commission intervened at various stages in the proceeding to point out the apparent WTO shortcomings in the Chinese action. In particular, the fact that Chinese producers are increasing their market shares in the context of a rapidly growing domestic market would make it impossible to find injury caused by imports. Even the Chinese claim that injury could come from steel diverted from US and Community into the Chinese market could not possibly be substantiated. The inclusion of stainless steel products in the 19

Chinese measures is of particular concern not least because of the substantial trade interest involved but also because neither the US nor the Community imposed safeguard measures on these products. As a result the Commission concentrated its efforts on having these stainless steel products excluded from the Chinese measures. This yielded some positive results between the provisional measures (imposed May 2002) and the definitive measures when certain hot-rolled stainless steel products were excluded representing an important share of Community exports to China. The Commission continued to try to persuade China to further reduce the negative impact of the measures for Community exporters. After the imposition of definitive measures, negotiations were held in Beijing between November 2002 and January 2003. As a result of the considerable pressure exerted by the Community, China indicated that it would initiate an exclusion process for exporting companies whereby they could apply to have certain products excluded from the measures. China also excluded a certain number of products already on the basis that there was no, or insufficient supply in China. The deadline for the exclusion process was 15 March by which time a number of Community exporters have filed exclusion requests. The Chinese authorities will examine these requests on the basis of whether or not the product is sufficiently available on the Chinese market. The Commission is monitoring the exclusion process in conjunction with industry and the Delegation in Beijing.

Anti-dumping investigation on catechol from the Community

On 1 March 2002, China initiated an anti-dumping investigation on imports of catechol originating in the Community, on the basis of a complaint lodged by Lianyungang Sanjili Chemicals Co. Ltd. On 4 November 2002, MOFTEC and SETC ( the Chinese investigating authorities) published their preliminary determination on the investigation and imposed anti-dumping duties ranging between 50% and 92% on imports from the Community. This was the first case against the Community under the new anti-dumping legislation. The Chinese investigating authorities carried out on-spot verification visits at the premises of the co-operating Community exporters in December 2002, after the imposition of provisional measures. While this practice is not against the WTO rules, the Community always carries out on-spot verification visits prior to the imposition of provisional measures which can generally be more beneficial to the exporters. The Commission continues to encourage China to change its practice on this issue. The Commission followed developments in this case and worked very closely with the Community industry in this context. The Commission had a number of concerns regarding the Chinese handling of the case particularly relating to the standing of the complainant, procedural deficiencies (recourse to best information available without adequate notification to the exporters concerned), injury findings, the obligation to use Chinese lawyers and the requirement for questionnaire replies to be made in Chinese. One issue of major concern was a request from the Chinese authorities to have certain highly sensitive commercial information made public in non-confidential documents filed with the authorities. Such a requirement is clearly in breach of the rules relating to confidentiality in the WTO agreement and the Commission is pursuing this matter vigorously. Definitive disclosure is expected between March and September 2003 (the Chinese authorities having extended the period of the investigation). The Commission will continue to monitor developments in the case.

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Anti-dumping investigation on caprolactam from Belgium, Germany and the Netherlands

China initiated on 7 December 2001 an anti-dumping investigation on imports of caprolactam originating, inter alia, in Belgium, Germany and the Netherlands. Although it was under no WTO obligation in this case, given that the date of initiation was prior to their WTO accession, China indicated that they would follow WTO anti dumping rules.

On 5 December 2002, MOFTEC announced an extension of six months for the investigation. In January 2003, MOFTEC announced the imposition of provisional measures ranging between 6% and 38% for the Community Member States concerned. On-spot verification visits took place in late February (after the imposition of provisional duties). The Commission will continue to monitor developments.

Anti-dumping investigation art paper from Finland

China initiated an anti-dumping investigation on imports of coated art paper originating in Finland, Korea and Japan on 6 February 2002. Provisional measures were imposed in February 2003 on Korea and Japan but not Finland on the basis that imports from that country were less than 1.5% of total imports during the investigation period.

Anti-dumping investigation on methylene chloride from France, Germany, Netherlands and the United Kingdom

China initiated an anti-dumping investigation on imports of methylene chloride originating inter alia in the UK, Netherlands, France, Germany in December 2000. Provisional measures were imposed in August 2001 on all the countries concerned ranging between 39% for the UK and 75% for France. At definitive stage (June 2002) these measures were confirmed (with minor reductions) except for France, which was no longer subject to the measures.

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D. CENTRAL AND EASTERN EUROPEAN COUNTRIES (CEECs) 1. Introduction Five Central and Eastern European countries - Bulgaria, Slovakia, the Czech Republic, Hungary and Poland - had made use of commercial defence instruments by the end of 2002, concerning almost exclusively erga omnes safeguard actions. At the end of 2002, they had 8 safeguard measures in force – 3 by the Czech Republic, 2 by Bulgaria, 1 by Hungary (provisional), 1 by Poland (provisional) and 1 by Slovakia. This compares to 5 measures (4 safeguard and 1 anti-dumping) in 2001 and 3 in 2000. It should be noted that the large steel safeguard actions initiated in 2002 concern several separate groups of steel products. If these are taken individually, the number of safeguard measures applied in 2002 is much higher, as provisional measures imposed on steel products by Hungary and Poland concern 25 product groups. There was also one anti-dumping measure introduced in 2000 and still applied by the Czech Republic regarding salt originating in the Community. In 2002, 13 cases were initiated by these countries (5 by the Czech Republic, 3 by Poland, 3 by Bulgaria, 1 by Hungary and 1 by Slovakia). This compares to 5 initiations in 2001. 2 of these cases as well as another 2 initiated prior to 2002 were terminated without imposition of measures. The 2002 new initiations are of course much higher in number (49) if the steel safeguard actions are counted by individual product groups concerned. CEEC countries have thus clearly made a greater use of safeguards in 2002. For those countries amongst them who are to join the EU in 2004, any measures will obviously be of short duration, given that they will automatically lapse on the date of accession. Nevertheless, the Commission will have to see that these countries do not initiate further trade defence proceedings in the run-up to accession in a last attempt to protect their domestic industry before joining the Community single market. CEECs have generally respected their bilateral obligations under the Europe Agreements vis à vis the Community and bilateral consultations have been held on several occasions with the Czech Republic, Hungary and Poland. There are concerns, however, that the standards for injury and causation applied by these countries when it comes to imposition of safeguards do not always meet those required by the WTO Agreements. With regard to the Accession Countries, there is now an understanding that no more anti-dumping and anti-subsidy cases will be initiated by them against the Community and vice versa. 2. Some notable cases Czech safeguard investigations on steel pipes/tubes and wire ropes/cables

On 27 February 2002, the Czech Republic initiated a safeguard investigation into stranded wires, ropes and cables and on 6 March 2002 a further one into steel pipes and tubes. In terms of trade interest, Community exports in the wire case are ± € 6 million, while for the pipes and tubes they amount to ± € 53 million. At the end of 2002 the Commission discussed with the Czech authorities the findings of these investigations and the level of possible measures, with a view to avoiding cutbacks 22

in the Community exports. The investigation into wire ropes and cables did not establish a need for measures and was terminated on 19 February 2003 without imposition of measures. For steel pipes and tubes the case for measures was more convincing, although doubts could be raised as to the existence of unforeseen development. Measures in form of tariff quotas with additional duties applied outside the quota ranging between 17% and 23% were therefore applied on 1 March 2003. The Commission did not object to these measures but made sure that the level of quotas applied were satisfactory for Community exporters.

Czech safeguard investigation on certain steel products

On 2 September 2002, the Czech Republic initiated a safeguard investigation into 8 steel product groups, being hot and cold-rolled flat products, hot-rolled bars and rods, angles/shapes/sections, seamless tubes/pipes. This proceeding is to be seen as one within the “chain reaction” that followed the US steel safeguard. Unlike Poland and Hungary, the Czech Republic did not apply provisional measures. Community trade interest in this case amounts to ± € 146 million. The Commission services had several contacts with the Czech authorities to monitor developments in this investigation. Definitive findings are expected to be discussed in the spring 2003.

Hungarian safeguard investigation on certain steel products

On 22 May 2002, Hungary initiated an investigation into 15 steel product groups, being hot and cold-rolled flat products, hot and cold-rolled bars, rods, angles, shapes, sections, welded tubes and pipes, and wires, ropes, cables. This investigation was launched partly as a response to the US safeguard measure imposed in March 2002. On 3 June 2002, Hungary applied provisional safeguard measures for all products subject to the investigation. The measures consisted in tariff quotas calculated on the basis of average imports over the 3 year period 1998-2000 increased by a percentage of 10%. Community exports affected amounted to ± € 188 million. Consultations between Hungary and the Commission were held prior to the adoption of the provisional measures. The Commission expressed particular concern at the fact that products not targeted by the US measure were included in this investigation and urged Hungary to avoid unnecessary protection. Also, for some products it would appear that the conditions for imposing measures would not be met, namely because imports did not increase or for lack of injury. Hungary pursued the investigation after the expiry of provisional measures on 18 December 2002. Further consultations between the Commission and the Hungarian authorities took place in February 2003 on the final conclusions of the investigation and definitive measures proposed. The Commission collected the views of the Community industry concerned and was able to negotiate an acceptable result for Community exporters. Definitive measures in the form of tariff quotas are to be expected in the second half of March 2003. They should apply to less than half of the products that were subject to provisional measures, affecting Community exports of ± € 72 million. The level of quotas as agreed with the Commission should not be of particular concern to Community exporters.

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Polish safeguard investigation on certain steel products

On 8 June 2002, Poland initiated a safeguard investigation into 12 steel product groups, being pig iron, hot and cold-rolled flat products, hot-rolled bars and sections, electrical sheets, and seamless and welded tubes. Shortly after, Poland submitted a proposal for provisional measures in the form of tariff quotas, which would seriously affect Community exports of ± € 400 million. The Commission reacted promptly and, after an intensive negotiating process, provisional measures were applied at substantially less restrictive levels on 19 August 2002. The measures consist in tariff quotas calculated on the basis of average imports over the 3 year period 1999-2001 increased by a percentage of 10% to 35% depending on the product group. Two product groups, hot-rolled bars in coils and roll formed sections, were not subject to the provisional measures but remained in the scope of the investigation.

Although the Polish measure was introduced mostly as a response to the US measure, the products covered extend beyond the scope of the US safeguard. As in the Hungarian case, the Commission expressed concerns and urged Poland to refrain from any unwarranted protection. The Commission also pointed out that certain WTO requirements concerning in particular the existence of unforeseen development and the causal link between imports and injury would be difficult to demonstrate. On numerous occasions in the course of the proceeding, further discussions between the Commission and Poland took place on the question of product exclusions requested by the Community exporters and on problems relating to the management of the tariff quotas applied. The exclusion process was launched in August 2002, and has been monitored by the Commission in very close co-operation with the Community industry. On 21 February 2002, Poland published a decision by which a large number of specific products are excluded from the measure. The Polish decision meets most of the requests made by Community exporters. As regards implementation of the measures, Poland was found to apply burdensome and time-consuming licensing procedures that severely hinder imports under the tariff quotas. Moreover, many European exporters complained that the quota allocation was made in a non-transparent way. The Commission has repeatedly raised these questions with the Polish authorities who admitted these deficiencies but were unable to offer an immediate solution due to constraints of the Polish legislation. Poland agreed to consider improvements in the system for the definitive stage. Consultations between the Commission and Poland on definitive measures took place in February and March 2003. Throughout the discussions, the Commission remained in very close contact with the Community industry and ultimately managed to obtain a result which satisfies Community exporters. Definitive measures in the form of tariff quotas were confirmed for 8 product groups (out of 12 investigated and 10 subject to provisional measures). In order to take account of the exclusions granted, quotas were fixed at levels that are between 5 and 10% lower than the provisional ones. These levels appear to be reasonable if exclusions are deducted from potential Community exports. Additional duties to be applied above the tariff quotas were reduced in comparison to the provisional measures, ranging between 10% and 20%. Furthermore, Poland gave assurances that it would improve quota management by streamlining the relevant

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procedures and by granting import licences of a longer duration (minimum of 6 months as opposed to 3 at the provisional stage). Definitive measures entered into force on 8 March 2003.

Polish safeguard investigation on water heaters

On 28 May 2002, Poland initiated a safeguard investigation into water heaters. Although erga omnes, this investigation targets almost exclusively Community exports (amounting to ± € 15 million). The Commission held discussions with the Polish authorities and expressed particular concerns at this fact. The Commission has further taken contact with the Community industry to collect their views and discuss the approach to take in this case. The Polish authorities are expected to present their findings in the first half of 2003. Consultations with the Commission are due to take place before a final decision.

Safeguard proceedings regarding urea and/or ammonium nitrate carried out by Poland, Bulgaria, the Czech and the Slovak Republic

Investigations Between January 2002 and the beginning of 2003, Bulgaria, the Czech Republic, Hungary and the Slovak Republic have initiated safeguard investigations into ammonium nitrate and/or urea fertilisers. Bulgaria initiated an investigation into ammonium nitrate on 29 January 2002, applied provisional measures in July and definitive ones on 29 December 2002. A further investigation into urea initiated by Bulgaria on 18 June 2002 is still on-going. The Czech Republic initiated an investigation into ammonium nitrate on 14 August 2002 and applied provisional measures on 10 February 2002. The Slovak Republic initiated an investigation into ammonium nitrate on 2 October 2002, which has not reached any conclusions yet. Finally, on 2 January 2003, Hungary initiated a broader investigation into urea, ammonium nitrate and various mixtures thereof, and applied from 1 February provisional measures only for ammonium nitrate, while pursuing the investigation for the rest of the products.

This surge of protective activity regarding fertilisers was commonly admitted to be due to problems all these countries encounter with very low priced imports coming from their eastern neighbours (mainly Russia and Ukraine). The Community itself is well aware of these problems, given its own anti-dumping duties on Russian and Ukrainian imports for these products.

Community trade interest

The Community has various trade interests in these cases: Exports to Bulgaria are at negligible levels (less than € 10,000), which should not be affected by the applied tariff quota.

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Trade interest regarding the Czech Republic is much higher (± € 400,000), but the measures taken by the Czech authorities apply only to exports beneath a certain price threshold and should not affect Community exports, which are made at a much higher price. The Slovak proceeding could potentially affect Community exports of ± € 200,000. No provisional measures are applied in this case. In the Hungarian proceeding, the Community has a clear trade interest only in urea and in a specific mixture of ammonium nitrate, which are still investigated but not subject to provisional measures.

In all these cases the Commission is monitoring developments attentively in close contact with the Community industry, taking the view that, given the well identified source of the problem in these cases, any measures should not penalise Community exports which are clearly not the origin of the difficulties encountered by the domestic industries concerned.

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E. RUSSIA AND UKRAINE 1. Introduction At the end of 2002, Russia and Ukraine had a total of 6 definitive safeguard measures in force against the Community (5 by Russia and 1 by Ukraine). Both countries have, in the past year, significantly increased their level of trade defence activity. In 2002, Russia initiated no fewer than 9, and Ukraine 5, new safeguard investigations which represents a very significant jump from the previous year where only 1 new investigation was opened by Russia. The majority of these investigations will be concluded during 2003. A possible explanation for this development could be the Russian currency crisis in 1998 which caused severe disruptions in foreign trade including in the rest of the CIS countries. Imports of foreign goods into Russia and Ukraine plunged in 1998/1999 and have only started to return to normal levels in the last 2 years. This could in part account for the number of new investigations opened recently and for the provisional measures already imposed. In addition, the impending accession of these two countries to the WTO can also be viewed to have an effect on the upsurge in trade defence actions. The growing number of trade actions taken by both countries raises questions as to the standard of initiation applied by these countries when opening and conducting investigations which, in the view of the Commission, is often done on the basis of weakly founded complaints by the domestic industry. Furthermore, the standards applied by these countries fall short of those required under WTO rules, notably with respect to disclosure of information, demonstration of substantial injury and of causal link. Finally, it is also a concern that these countries resort only to the safeguard instrument although some cases (e.g. ball bearings and instant coffee) clearly show that the injury or threat of injury originates from particular countries and therefore could be dealt with by e.g. an anti-dumping investigation provided that dumping is taking place. There is also considerable doubt as to the conformity of these safeguard actions with the provisions set forth in the Partnership and Co-operation Agreements (PCA) signed with each of these countries, most notably regarding procedural requirements. On several occasions, the conditions for imposing measures have not been completely respected, notably in the case of agricultural products where Russia on several occasions has failed to respect the requirement for disclosure and formal consultations. The Commission has on several occasions raised these issues with both the Russian and Ukrainian authorities and there seems to be some inclination towards a better implementation of the provisions of the PCA. In addition, both countries are in the process of adopting new legislation on TDI which would be more in line with the applicable provisions in the WTO. 2. Some notable cases Russian safeguard investigation on ball and tapered roller bearings

The investigation into imports of ball and tapered roller bearings was initiated by Russia on 13 March 2002. Total Community exports to Russia amounted to 10.6 million Euro in 2001 and originated mainly from Sweden and Germany. The industries concerned (SKF and FAG) have co-operated extensively with the Russian investigating authorities and have provided them with all requested information of relevance to the investigation. 27

The Commission is closely following the proceedings in co-operation with Community industry and has requested the Russian authorities to make additional information available in accordance with the provisions of the PCA. The conclusion on the investigation was expected in mid December 2002 as such investigations according to Russian legislation must be concluded within a 9 month period, but there has to date been no communication by the Russian authorities on the issue.

The Commission would regard any imposition of measures against Community exports as unjustified in so far as the volume of exports to Russia is very low compared to total domestic consumption. In addition the export price of Community produced bearings is significantly higher (up to 9 times) than that of Russian bearings. This would strongly indicate that Community produced bearings are of much higher quality and not directly competing with Russian bearings. This element is also confirmed by the growing opposition from the Russian user industry to any restrictive measures on Community manufactured bearings on the grounds that these are not substitutable with Russian products for reasons of quality and dependability.

Russian safeguard investigation on wallpaper

This investigation was initiated on 6 September 2002 and is by far the most important in terms of economic interest. Community wide exports of wallpaper and wall coverings amounted in 2001 to 112 million Euro, of which two thirds were exported by Germany followed by the United Kingdom, Italy and France. For many Community exporters, the Russian market represents not only the most important but also the fastest growing export market on a world wide basis, and the investigation is therefore causing serious concern for the companies that could potentially be affected. The Commission is doubtful as to whether any injury ostensibly suffered by the domestic industry can be caused by increased imports from the Community. The exports of wallpaper from the Community to Russia have remained well below the level reached before the Russian currency crisis of 1998, and their market share has decreased. In addition, the wallpaper exported by Community companies is of a technical standard not yet used in the Russian wallpaper manufacturing process, which supports the view that there is no direct competition between the two. Rather, it would appear that the threat to the domestic industry is due to a threefold increase in imports from Ukraine over the last three years. The Commission is monitoring this investigation very closely, and a Note Verbale was sent to the Russian authorities in December 2002 requesting additional information but there has so far been no reaction by Russia. The Commission is planning to hold talks on an informal level with the Russian authorities in the early spring if no further information is made available.

Ukrainian safeguard investigation on instant coffee

With respect to Ukraine, the most significant investigation to date concerns imports into Ukraine of instant coffee. This investigation was initiated on 7 October 2002 and involves mainly exporters from Germany, the United Kingdom and France. Community exports of instant coffee totalled 9.6 million Euro in 2001. The Community industries concerned by the investigation (Kraft and Nestlé) are co-operating in the proceeding.

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The Commission has transmitted some preliminary comments on the complaint lodged by the domestic industry and is awaiting the outcome of the public hearing to be held during February 2003. The Commission considers it doubtful that measures could be warranted as Community products are substantially higher priced than domestic products, and given the fact that there appear to be no convincing elements demonstrating substantial injury or threat thereof nor the presence of a causal link between increased imports and injury.

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F. TURKEY 1. Introduction Turkey has not been an active user of trade defence instruments against the Community. In fact, the only recent case, described below, concerns imports of polyvinyl chloride from Belgium, Finland, Germany, Greece, Italy and the Netherlands. This case involves significant Community trade interests. The fact that the number of Turkish cases against the Community is low is not surprising. The Customs Union with Turkey has created increased integration of the markets which has lessened instances of price discrimination and the need for trade defence instrument cases. 2. A notable case Turkish anti-dumping investigation concerning polyvinyl chloride from Belgium, Finland, Germany, Greece, Italy and the Netherlands

Turkey initiated on 2 December 2001 an anti-dumping investigation into polyvinyl chloride (PVC) originating in Belgium, Finland, Germany, Greece, Italy and the Netherlands. The Community exports targeted by this proceeding amounted, in the reference period, to € 97 million. No provisional measures were applied.

The Commission has been following this case consistently from its start, in close contact with Community exporters who co-operated in the proceeding. On 12 September 2002, the Turkish authorities disclosed their definitive findings. Dumping and injury margins were set at high levels, and Community exporters were threatened with very high duties (from 15% to 30%). The Turkish disclosure revealed a number of flaws in the way the investigation had been carried out, notably concerning some aspects of the dumping calculation methodology used by the Turkish authorities and the way they evaluated injury, in particular its true causes. The Commission reacted promptly, expressed strong criticisms and contested the investigation findings on a number of occasions and at various levels. The outcome of this effort was positive. Turkey introduced from 6 February 2003 definitive measures that are substantially below the dumping/injury margins found: all co-operating companies are charged with an average duty of 4.5-5%, non co-operating ones with some 9-9.5%. These levels are clearly a relief for all Community exporters targeted by the proceeding.

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G. LATIN AMERICA 1. Introduction During the year 2002, Latin American countries opened 5 new anti-dumping cases (2 by Brazil, 1 by Argentina, 1 by Mexico, and 1 by the Andean Community), and imposed 3 new definitive anti-dumping measures (2 by Brazil and 1 by Argentina). There was only one new anti-subsidy investigation (by Peru), and 4 new safeguard investigations (2 by Chile, 2 by Venezuela) with 3 new safeguard measures imposed (2 by Chile and 1 by Brazil). Activity by important users such as Argentina and Brazil, at least as regards actions directed at Community exports, seems to be slowing down. As regards Argentina, this can be explained by the dramatic events of the past years whereby changes in macroeconomic policy and currency devaluation have naturally raised new barriers to imports. It is worth noting that due to these new barriers, products previously subject to anti-dumping duties are now in practice shut out from the Argentinean market. Conversely, some other countries such as e.g. Peru and Venezuela are emerging as new and/or frequent users of trade defence instruments. In general, 2002 has confirmed the tendency by Latin American Countries, including new users, to target Community exports of basic or transformed agricultural products, which benefit from assistance in the framework of the Common Agricultural Policy. In fact out of 38 definitive measures in force at the end of 2002, 16 are directed at agricultural products (3 new definitive measures imposed on these products). 2. Some notable cases Mexican anti-dumping investigation on ceramic tiles from Spain

In May 2002, Mexico initiated an anti-dumping investigation on ceramic tiles from Spain, on the basis of a petition presented by Lamosa Recubrimentos S.A. de CV, Manufacturas Vitromex, S.A. de CV, Porcel, S.A. de CV an Porcelanite S.A. de CV. This investigation raises serious questions: Mexico is traditionally an important export market for Spanish producers of tiles, which already face import barriers such as high customs duties and/or minimum import prices. The combined effect of these measures is significant and highlights what seems to be an unduly protectionist stance regarding the Mexican domestic industry, which already controls 94% of the domestic market. The Commission is closely following this case since its initiation, in co-operation with representatives of the industry concerned, and will continue to do so in order to ensure the rights of community exporters.

Peruvian anti-subsidy investigation on olive oil from the Community

On 29 August 2002, Peru opened a controversial anti-subsidy case on olive oil from the Community. Despite numerous interventions by the Commission, Peru adopted a provisional countervailing duty of US$1.09 per kilo on olive oil originating in the Community.

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The way this CVD investigation is conducted raises serious concerns. To start with, the initiation standard applied by Peru seems inadequate, since the petitioners did not submit sufficient evidence with regard to the existence, amount and nature of the alleged subsidy. Furthermore, the decision to impose provisional measures can be criticised on several grounds. First of all, there was no demonstration on the benefit eventually conferred by the alleged subsidies to olive oil producers. Secondly, injury and causality determinations are largely based on unsubstantiated statements. Finally, the Community and the Member States were not given adequate opportunity to submit information and make comments, since the provisional duties were imposed even before the deadline set for the Community response to the questionnaire. The Commission is actively participating in the investigation and has, since its initiation, pointed out to the Peruvian investigating authorities the shortcomings of its action. In particular, the Commission has protested strongly about the Peruvian decision to impose provisional measures.

The Community trade interest in this case is rather limited, but there is a risk of a snow-ball effect with other countries in the area taking similar actions. In fact, Argentina already has CVD measures in force on olive oil from the Community, and other countries such as Chile and Brazil are important markets for Community olive oil. In order to clarify the situation and maintain the pressure on the Peruvian authorities, the Commission has requested bilateral consultations with Peru, under Article 13.2 of the SCM Agreement. Depending on the results of these consultations and on the future developments of this case, further steps may be considered.

Andean Community anti-dumping investigation on sorbitol from France

On 12 August 2002, the Secretary-General of the Andean Community decided to initiate an anti-dumping investigation on imports of sorbitol originating in France. Under Andean Community legislation, a member of the Andean Community may request the initiation of anti-dumping investigations to counter dumped imports from third countries. The Commission has informed the investigating authorities that it has serious doubts about the legality of this proceeding. First of all neither the constitution of the Andean Community nor any other rules, including those relating to anti-dumping action, have yet been notified to the WTO. Moreover, there are serious doubts as to whether the Andean Community can be considered a Customs Union, since GATT requirements and in particular those established by GATT Article XXIV.8(a) do not appear to be fulfilled. In addition, for the product in question, there is as yet no common external tariffs at Andean Community level. Customs duties applied are 15% in Ecuador and Colombia, 10% in Venezuela and Bolivia and 4% in Peru. The Commission will continue to monitor developments in the proceeding.

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Cases subject to WTO dispute settlement procedures Minimum price duty on ceramic floor tiles (DS189)

On 12 November 1999, Argentina imposed a minimum price duty against imports of ceramic floor tiles from the Community. Even a cursory examination of this case was sufficient to show that Argentina had acted inconsistently with WTO rules and the Community referred the matter to a panel. This panel upheld all the claims submitted by the Community and the Dispute Settlement Body report was adopted on 5 November 2001, as Argentina did not appeal. On 26 April 2002, upon expiration of the period agreed for compliance with the panel ruling, Argentina published a regulation which terminates all anti-dumping duties on the Italian exports. This was an important success for the Community, not only for having forced Argentina to repeal unwarranted measures, but also because it clarified a number of issues relating to the standards of an investigation (rejection of information submitted by exporters, errors in the calculation of the dumping rates, lack of disclosure). In particular, the findings will have an impact on new users of commercial defence instruments whose standards do not always meet those required by the WTO Agreements.

Safeguard measures on canned peaches (DS238)

In August 2001, Argentina imposed a definitive safeguard measure on imports of canned peaches, in spite of the apparent shortcomings with respect to the required WTO standards as pointed out by the Community. In December 2001, Chile requested the establishment of a panel concerning the definitive safeguard measures imposed. Chile challenged the measure on a number of points, most of which are in line with the views of the Community. For example, the lack of a finding of an emergency arising from “unforeseen developments”, the lack of an increase in imports as well as deficiencies in the investigation with regard to injury and causality. Furthermore, Chile contested the level of the measure on the grounds that it would exceed the level necessary to prevent or remedy the alleged serious injury. In order to defend its legitimate interests in this case the Community has registered as a third party and has sided with Chile along the proceeding. The panel report was issued on 14 February 2003 and its ruling corroborates the arguments presented by Chile which the Community supported. The Commission will continue to monitor this case attentively.

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H. AUSTRALIA 1. Introduction At the end of 2002, a total of 9 trade defence measures were in force against imports from the Community. The majority of these measures take the form of anti-dumping duties (6), while 3 are countervailing measures. During the year 2002, 4 new anti-dumping investigations and 1 anti-subsidy investigation were opened. 2 anti-dumping measures and 2 countervailing measures were repealed during 2002. No measures were imposed during 2002. This compares to 2 measures imposed in 2001. Australia is one of the traditional users of trade defence instruments, and has in recent years imposed a number of measures against the Community. Australian anti-subsidy cases have often concerned support under the Common Agricultural Policy. 2. A notable case Review of countervailing measures and new investigation on imports of canned tomatoes from Italy

Australia initiated this sunset review at end of 2001. The measures were due to expire on 28 April 2002. Australian countervailing measures with respect to Italian canned tomatoes were first imposed in 1992. They were taken on the grounds of Community aid granted to tomato processors and export restitution payments. The measure takes the form of a minimum price, which was fixed at the lowest non-injurious level for the domestic industry.

In the sunset review, the Commission argued that, following a revision of the Community aid scheme in 2000, the production aid is no longer paid to producers of canned tomatoes. It is now paid to tomato growers, who obviously do not produce canned tomatoes. Therefore, Australia is required to positively demonstrate that the aid has benefited the canners, not the tomato growers. In the absence of such a positive demonstration of an upstream benefit to the canners, Australia should conclude that there is no subsidy to the imported product under the new Community aid regime. The export restitution has been reduced in compliance with the WTO Agriculture Agreement.

In their conclusions, the Australian investigating authorities maintained that subsidisation of canned tomatoes is continuing in the Community, on the grounds that aid is granted to the producers of fresh tomatoes only upon presentation of contracts concluded with the processing industry. They also established continuation of the export restitution. Australia therefore decided on 28 April 2002 to continue the measures for 5 more years.

However, following a legal challenge in Australia by the Italian exporters, a Federal Court order of 25 September 2002 set aside the decision to continue the countervailing duties, with effect from 28 April 2002.

On 1 October 2002, Australia self-initiated a new investigation. It appears, however, that the conditions of Article 11.6 of the SCM Agreement, governing self-initiation of new investigations, are not met. In order to initiate a new investigation under this provision

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two conditions have to be fulfilled. Firstly, “special circumstances” have to be identified, and secondly, the investigating authorities must have in their possession the same standard of evidence as required for an official complaint lodged by the domestic industry. For instance, there has to be evidence that the alleged injury to a domestic industry is caused by subsidised imports through the effects of subsidies pursuant to Article 11.2(iv) of the SCM Agreement.

The Commission considers that, following the court decision, there was no prima facie evidence of the alleged subsidisation, and that there was no prima facie evidence of material injury or threat of injury. In fact, it was concluded in the sunset review that the Australian canned tomatoes industry was not currently suffering material injury.

The Commission has made several submissions to the Australian investigating authority. However, on 3 March 2003, the Australian investigating authority issued a statement of essential facts, in which it found that the production aid system is a form of price support as referred to in Article XVI of the GATT 1994 that confers a benefit in relation to the exported goods. It was also found that the exports were causing material injury. It is therefore anticipated that the Australian investigating authority will recommend to the relevant Minister the imposition of countervailing measures.

The Commission will monitor the development of this case closely.

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I. OTHER COUNTRIES 1. Introduction At the end of 2002, a total of 38 trade defence measures were in force against imports from the Community by other countries (see annexes). The most part of the actions are anti-dumping measures, but there has been an increasing use of the safeguard instrument, mainly by the new users. 2. Some notable cases Canadian safeguard investigation on steel

On 22 March 2002, the Canadian Government requested the Canadian International Trade Tribunal (CITT) to conduct a safeguard investigation on certain steel products. The Commission intervened strongly including attending consultations, and conducted other bilateral meetings with the CITT.

On 20 August 2002, the CITT announced its final determinations on remedy (determinations on injury were published on 4 July 2002) in the above safeguard case and submitted its final report to the Canadian Government.

In its report, the Tribunal recommended the imposition of safeguard measures for five steel products (out of nine originally investigated): discrete plate; cold-rolled sheet and coil; angles, shapes and sections; reinforcing bar; and standard pipe.

For 4 out of 5 products, CITT recommended the imposition of tariff quotas (discrete plate, cold-rolled sheet, hot-rolled shapes and structurals, and standard pipe), while for reinforcing bars a straight 15% tariff was recommended.

CITT also recommended to exclude imports from developing countries and from some free trade area partners from the scope of the measure but to include imports from the United States.

Finally, CITT recommended to grant 215 out of the 280 product exclusions requested by the interested parties (exporters and final consumers) during the inquiry, since these products are not available from Canadian producers.

The Canadian Government is still evaluating the CITT recommendations although it is also possible that no measures will be taken. In fact, the Canadian steel industry seems to be performing quite well at present. The Commission will monitor further developments and consider further action as appropriate.

Jordanian safeguard cases

In 2002 Jordan initiated no less than 8 safeguard investigations into the following products:

− magnetic tapes, initiated on 24 January − pasta products, initiated on 18 May − ceramic sanitary items, initiated on 27 May − 2 investigations on cooking appliances, initiated on 29 May − ceramic tiles, initiated on 29 May

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− electric accumulators, initiated on 29 May − aerated waters, initiated on 17 September With the exception of ceramic tiles, for which Community exports amount to ± € 11 million, the Community has little trade interest in these cases. In the case of magnetic tapes, for which measures were applied on 1 May 2002, the Community interest was clearly negligible. However, in view of the number of cases (6) initiated in May, the Commission reacted by expressing its concerns at the proliferation of safeguard proceedings in Jordan, which appeared to contradict the exceptional nature of this instrument. In August 2002 the Jordanian authorities disclosed the preliminary findings on some of those investigations, in the form of reports that were fairly sketchy and lacked sufficient data for an appraisal of the cases concerned. The Commission submitted its comments and criticisms in writing asking Jordan to provide a more thorough analysis on each case. In October 2002, Jordan terminated 4 of the investigations in question without imposing measures: ceramic tiles, electric accumulators and cooking appliances (2 investigations). The non-imposition of measures on ceramic tiles was of particular importance for the Community, this product being the only one for which Community exporters had a real interest. In January 2003, after providing clearer evidence on injury and the need for measures, Jordan applied definitive measures on pasta and ceramic sanitary products. The investigation into aerated waters is still on-going.

South African anti-dumping duty on self-copy paper from Belgium, Germany and the United Kingdom

On 18 January 2002, South Africa imposed provisional anti-dumping duties ranging from 6,3% to 20,9% on imports of self-copy paper from Belgium, Germany and the United Kingdom. Definitive anti-dumping duties ranging from 6% to 55,7% were imposed on 1 July 2002 with retroactive effect to 18 January 2002.

The two main Community exporters have expressed their dissatisfaction with the final determination in this case.

In fact, it appears the measures could be criticised on several grounds. The existence of injury to the South African industry is questionable and it is even harder to establish any causal link with Community imports. There appears to be no overall price undercutting, no overall price depression and no overall price suppression. Although the profitability of the sole domestic producer may have declined a little, this producer invested in a huge increase in capacity just before the investigation, and any injury appears to be self-inflicted.

There are also concerns about the rights of defence for the exporters concerned, since their arguments were not adequately addressed, and the disclosure was not adequate.

The Commission is considering pursuing this matter and contacting the South African authorities with a view to clarifying certain of the above mentioned issues.

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Thai anti-dumping investigation on flat cold-rolled stainless steel from the Community

On 19 February 2002, Thailand initiated an anti-dumping investigation on imports of flat cold-rolled stainless steel originating, inter alia, in the Community. Provisional measures were imposed on 27 August 2002 ranging between 10.02% and 51.12%. On-spot verification visits took place in December after the imposition of provisional measures.

The Commission is actively following this case and has provided assistance to the Community exporters who co-operated in the proceeding, most notably in protesting against an attempt by the Thai authorities to disregard certain information from a Community exporter. This resulted in a significant drop in the dumping margin for the company concerned between provisional and definitive stage. Definitive anti-dumping duties were imposed on imports from the Community ranging between 10.02% and 25.57% in February 2003. The residual duty is significantly lower than that imposed on the other countries subject to the investigation.

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ANNEX 1

Measures in force end 2001 and 2002

AD CVD SG TOTAL Country

2002 2001 2002 2001 2002 2001 2002 2001 ARGENTINA 4 4 3 3 3 3 10 10

AUSTRALIA 6 9 3 5 0 0 9 14

BRAZIL 9 7 0 0 2 1 11 8

BULGARIA 0 0 0 0 2 0 2 0

CANADA 8 8 2 2 0 0 10 10

CHILE 0 0 0 0 5 5 5 5

CHINA 1 0 0 0 1 0 2 0

COLOMBIA 3 3 0 0 0 0 3 3

CZECH REP 1 1 0 0 3 2 4 3

ECUADOR 0 0 0 0 1 0 1 0

EGYPT 2 1 0 0 1 1 3 2

EL SALVADOR 0 0 0 0 0 0 0 0

INDIA 23 17 0 0 3 2 26 19

INDONESIA 1 1 0 0 0 0 1 1

ISRAEL 1 1 0 0 0 0 1 1

JAPAN 0 0 0 0 0 0 0 0

JORDAN 0 0 0 0 2 1 2 1

KOREA 1 3 0 0 1 1 2 4

LITHUANIA 0 0 0 0 1 0 1 0

MALAYSIA 2 2 0 0 0 0 2 2

MEXICO 3 3 1 1 0 0 4 4

MOROCCO 0 0 0 0 1 1 1 1

NEW ZEALAND 1 2 1 1 0 0 2 3

PHILIPPINES 2 2 0 0 0 0 2 2

POLAND 0 0 0 0 1 1 1 1

RUSSIA 0 0 0 0 5 4 5 4

SLOVAKIA 0 0 0 0 1 1 1 1

SOUTH AFRICA 11 13 0 0 0 0 11 13

THAILAND 0 0 0 0 0 0 0 0

UKRAINE 0 0 0 0 1 3 1 3

USA 31 28 13 11 3 2 47 41

VENEZUELA 1 1 3 3 0 0 4 4

TOTAL 111 106 26 26 37 28 174 160

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ANNEX 2

Investigations ongoing end 2001 and 2002

AD CVD SG TOTAL Country

2002 2001 2002 2001 2002 2001 2002 2001 Argentina 1 3 0 0 0 0 1 3

Australia 4 1 1 0 0 0 5 1

Brazil 2 2 0 0 0 1 2 3

Bulgaria 0 0 0 0 2 1 2 1

Canada 0 0 0 0 1 0 1 0

Chile 0 0 0 0 0 1 0 1

China 3 2 0 0 0 0 3 2

Colombia 0 0 0 0 0 0 0 0

Costa Rica 0 0 0 0 1 0 1 0

Czech Rep 0 0 0 0 4 3 4 3

Ecuador 0 0 0 0 0 2 0 2

Egypt 0 2 0 0 0 0 0 2

El Salvador 0 0 0 0 0 0 0 0

Hungary 0 0 0 0 1 0 1 0

India 10 11 0 0 1 2 11 13

Indonesia 0 1 0 0 0 0 0 1

Israel 0 1 0 0 0 0 0 1

Japan 0 0 0 0 0 3 0 3

Jordan 0 0 0 0 3 0 3 0

Korea 1 0 0 0 0 1 1 1

Malaysia 0 0 0 0 0 0 0 0

Mexico 1 0 0 0 0 0 1 0

Morocco 0 0 0 0 0 0 0 0

N. Zealand 0 0 0 0 0 0 0 0

Peru 0 0 1 0 0 0 1 0

Philippines 0 0 0 0 0 1 0 1

Poland 0 0 0 0 3 1 3 1

Russia 0 0 0 0 8 1 8 1

Slovakia 0 0 0 0 1 0 1 0

South Africa 0 6 0 0 0 0 0 6

Thailand 1 0 0 0 0 0 1 0

Turkey 1 1 0 0 0 0 1 1

Ukraine 0 0 0 0 5 0 5 0

USA 1 7 1 4 0 1 2 12

Venezuela 0 0 0 0 2 3 2 3

TOTAL 25 37 3 4 32 21 60 62

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ANNEX 3

Definitive Measures imposed in 2002

Country Product Member states concerned Type Date of

imposition ARGENTINA Washing machines Italy, Spain AD 2002/02/28

BRAZIL Canned peaches Greece AD 2002/04/26

BRAZIL Phenol Germany AD 2002/10/21

BRAZIL Coconuts EU SG 2002/08/05

BULGARIA Ammonium nitrate EU SG 2002/12/19

BULGARIA Crown corks EU SG 2002/06/01

CHILE Certain steel products EU SG 2002/06/28

CHILE Fructose and fructose syrup EU SG 2002/08/30

CHINA Steel products EU SG 2002/11/20

CHINA Methylene Chloride France, Germany, Netherlands, UK

AD 2002/06/20

CZECH REPUBLIC Cocoa powder EU SG 2002/06/16

EGYPT Lamps Spain, Italy AD 2002/09/05

INDIA Choline chloride EU AD 2002/01/14

INDIA High styrene rubber EU AD 2002/01/15

INDIA Vitamin AD3 EU AD 2002/05/21

INDIA Acrylic fibre (below 1.5 denier) Italy AD 2002/09/19

INDIA Flexible slabstock polyol EU AD 2002/09/19

INDIA Acrylic fibre Germany, UK AD 2002/10/09

INDIA Cold rolled flat products stainless steel

EU, Spain, Belgium AD 2002/10/19

INDIA Sodium nitrate EU AD 2002/10/28

INDIA Epichlorohydrin EU SG 2002/10/30

JORDAN Magnetic tapes EU SG 2002/02/05

RUSSIA Caramels EU SG 2002/01/25

RUSSIA Glucose EU SG 2002/10/16

RUSSIA Refrigerators parts EU SG 2002/08/02

SOUTH AFRICA Ropes & cables of iron or steel Germany, Netherlands AD 2002/02/22

SOUTH AFRICA Self-copy paper Belgium, Germany, UK AD 2002/07/01

SOUTH AFRICA PVC based roll goods Germany, Spain, UK AD 2002/08/28

USA Stainless Steel bars France, Germany, Italy, UK AD 2002/03/07

USA Low enriched uranium France AD 2002/02/13

USA Sulphanilic acid Portugal AD 2002/11/08

USA Certain Steel products EU SG 2002/03/05

USA Low enriched uranium France, Germany, Netherlands, UK

CVD 2002/02/13

USA Stainless Steel bars Italy CVD 2002/01/23

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ANNEX 4

Provisional Measures imposed in 2002

Country Product Member states concerned Type Date of

imposition BULGARIA Ammonium nitrate EU SG 2002/07/01

CHINA Steel products EU SG 2002/05/24

COSTA RICA Rice EU SG 2002/03/07

HUNGARY Steel EU SG 2002/06/03

INDIA Methylene chloride EU AD 2002/12/24

INDIA Phenol EU AD 2002/06/24

INDIA D (-)para hydroxy phenyl glycerine base (PHPG)-I

EU AD 2002/06/05

INDIA Vitamin A Palminate EU AD 2002/05/30

ISRAEL Hydrogenperoxyde EU AD 2002/01/15

JORDAN Magnetic tapes EU SG 2002/02/05

PERU Olive oil EU CVD 2002/11/29

POLAND Steel EU SG 2002/08/19

RUSSIA Butter EU SG 2002/09/24

RUSSIA Modified starch EU SG 2002/07/01

THAILAND Cold-rolled steel products EU AD 2002/08/27

VENEZUELA U&I sections of iron or steel EU SG 2002/10/17

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ANNEX 5

Investigations in progress end 2002

Country Product Member states concerned Type Date of

initiation ARGENTINA Unmodified starch Belgium, France, Italy,

Netherlands AD 2002/12/05

AUSTRALIA Dichlorophenoxy-acetic acid UK AD 2002/04/02

AUSTRALIA Dialysis bags Germany AD 2002/08/08

AUSTRALIA Thermoplastic polyurenthanes polyester

Germany, Italy AD 2002/09/26

AUSTRALIA Canned tomatoes Italy CVD 2002/10/01

AUSTRALIA High density polyethylene Sweden AD 2002/11/11

BRAZIL Cutting saw blades Italy AD 2002/10/23

BRAZIL Compounds containing a benzothiazole ring-system

Belgium AD 2002/02/19

BULGARIA Steel EU SG 2002/07/26

BULGARIA Urea EU SG 2002/06/18

CANADA Certain steel products EU SG 2002/03/25

CHINA Art paper Finland AD 2002/02/06

CHINA Catechol EU AD 2002/03/01

CHINA Caprolactam Belgium, Germany, Netherlands

AD 2001/12/07

COSTA RICA Rice Italy SG 2002/03/11

CZECH REPUBLIC Ammonium nitrate EU SG 2002/08/15

CZECH REPUBLIC Steel EU SG 2002/09/02

CZECH REPUBLIC Stranded wire, ropes and cables EU SG 2002/02/27

CZECH REPUBLIC Welded pipes and tubes EU SG 2002/03/06 HUNGARY Steel EU SG 2002/05/22

KOREA Ethythexyl alcohol France, Germany AD 2002/08/30

INDIA Vitamin A Palmitate EU AD 2002/02/24

INDIA Phenol EU AD 2002/02/15

INDIA D(-)para hydroxy phenyl glycerine base (PHPG)-I

EU AD 2002/02/08

INDIA X-Ray baggage inspection multi-energy system

EU AD 2002/05/15

INDIA Methylene chloride EU AD 2002/08/19

INDIA Hot-rolled coils, sheets, plates & strips

EU AD 2002/09/25

INDIA Caustic soda EU except from France AD 2002/11/08

INDIA Sodium hydrosulphite Germany AD 2002/12/14

INDIA Potassium carbonate EU AD 2002/12/19

INDIA Vitamin AB2D3K EU AD 2001/07/02

INDIA Vegetable oil (edible grade) EU SG 2002/05/27

JORDAN Aerated waters EU SG 2002/09/17

JORDAN Ceramic sanitary products EU SG 2002/05/27

JORDAN Pasta EU SG 2002/05/18

MEXICO Ceramic tiles Spain AD 2002/05/16

PERU Olive oil EU CVD 2002/08/26

POLAND Carbide of Calcium EU SG 2002/02/18

POLAND Steel EU SG 2002/06/08

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POLAND Waters heaters EU SG 2002/05/28

THAILAND Cold-rolled steel products EU AD 2002/02/19

RUSSIA Ball bearings and other taper bearings

EU SG 2002/03/13

RUSSIA Butter EU SG 2002/08/20

RUSSIA Crystal silicone EU SG 2002/03/13

RUSSIA Fluorspar EU SG 2002/11/05

RUSSIA Modified starch EU SG 2002/03/31

RUSSIA Poultry EU SG 2002/07/01

RUSSIA Sugar syrup EU SG 2002/11/05

RUSSIA Wallpaper EU SG 2002/09/06

SLOVAKIA Ammonium nitrate EU SG 2002/10/02

TURKEY PVC Germany, Italy, Belgium, Netherlands, Greece, Finland

AD 2001/11/0

UKRAINE Ammonium nitrate EU SG 2002/12/23

UKRAINE Biscuits EU SG 2002/12/06

UKRAINE Caustic soda EU SG 2002/10/07

UKRAINE Cotton and flex fabric EU SG 2002/12/06

UKRAINE Instant coffee EU SG 2002/10/07

URUGUAY Porcelain on-steel immersion heaters

Italy AD 2001/09/10

USA Polyvinil Alcohol Germany AD 2002/09/10

USA Oil country tubular good Austria CVD 2002/04/26

VENEZUELA Tyres EU SG 2000/03/08

VENEZUELA Shoes EU SG 2002/10/16

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ANNEX 6

All definitive measures in force on 31 December 2002

Country Product Member states concerned Type Date of

imposition ARGENTINA Coated paper and paperboard Austria, Spain, Sweden AD 2000/11/23

ARGENTINA Steel disc for agricultural machine

Spain AD 2001/07/31

ARGENTINA Twist drills Italy AD 1998/09/11

ARGENTINA Washing Machines Italy, Spain AD 2002/02/28

ARGENTINA Canned peaches EU CVD 1996/01/09

ARGENTINA Olive oil EU CVD 1998/06/25

ARGENTINA Wheat gluten EU CVD 1998/07/22

ARGENTINA Canned peaches EU SG 2001/08/08

ARGENTINA Footwear (sport footwear) EU SG 1997/01/25

ARGENTINA Motorcycles EU SG 2001/06/22

AUSTRALIA A4 Copy paper Germany AD 1994/02/17

AUSTRALIA A4 Copy paper Finland AD 1999/02/20

AUSTRALIA Air conditioners Italy AD 2001/04/20

AUSTRALIA Paper woodfree coated (75-150 gr.)

Finland AD 1998/09/10

AUSTRALIA Paper woodfree coated (90-150 gr.)

Austria, Finland, Germany AD 1998/05/09

AUSTRALIA Wound skin closure strips France AD 1998/12/17

AUSTRALIA Bottled brandy France CVD 2001/06/27

AUSTRALIA Bulk brandy France CVD 1990/02/27

AUSTRALIA Canned peaches Greece CVD 1992/02/19

BRAZIL Canned peaches Greece AD 2002/04/26

BRAZIL Cold-rolled stainless steel France, Spain AD 2000/05/26

BRAZIL Hydroethylcellulose The Netherlands AD 2000/04/19

BRAZIL Insulin Products France, Denmark AD 2001/02/12

BRAZIL Méthyl métacrylate France, Germany, Spain, UK

AD 2001/03/14

BRAZIL Milk powder EU AD 2001/02/23

BRAZIL Phenol Germany AD 2002/10/21

BRAZIL Polycarbonates Germany AD 1999/07/26

BRAZIL Sodium Tripoliphosphate UK AD 1999/08/05

BRAZIL Coconuts EU SG 2002/08/05

BRAZIL Toys EU SG 1996/06/18

BULGARIA Ammonium nitrate EU SG 2002/12/19

BULGARIA Crown corks EU SG 2002/06/01

CANADA Cigarette tubes France AD 1999/04/12

CANADA Cold-rolled Steel sheet Belgium AD 1999/08/27

CANADA Corrosion-resistant steel sheet Germany AD 2000/01/20

CANADA Hot rolled carbon steel Finland AD 2000/06/27

CANADA Hot rolled steel sheet France AD 2000/09/05

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CANADA Refined Sugar Denmark, Germany, Netherlands, UK

AD 2000/11/06

CANADA Stainless Steel round bar UK, Spain, Italy, Germany, France, Sweden

AD 1999/03/04

CANADA Steel plate Spain, Italy AD 1999/05/17

CANADA Canned ham Denmark, Netherlands CVD 1984/08/07

CANADA Refined sugar EU CVD 1995/11/06

CHILE Certain steel products EU SG 2002/06/28

CHILE Edible Vegetable oils EU SG 2000/01/22

CHILE Fructose and fructose syrup EU SG 2002/08/30

CHILE Socks EU SG 2000/11/08

CHILE Sugar EU SG 2000/01/22

CHINA Steel products EU SG 2002/11/20

CHINA Methylene Chloride France, Germany, Netherlands, UK

AD 2002/06/20

COLOMBIA Coffee grade Fertilizers Belgium AD 1999/10/06

COLOMBIA Orthophosphoric Acid Belgium AD 1998/07/13

COLOMBIA Tin plate The Netherlands AD 1999/12/03

CZECH REP Salt Germany AD 2000/10/11

CZECH REP Sugar EU SG 1999/09/15

CZECH REP Sugar substitute EU SG 2001/07/26

CZECH REP Cocoa powder EU SG 2002/06/16

ECUADOR Matches EU SG 2001/10/24

EGYPT Lamps Spain, Italy AD 2002/09/05

EGYPT Tires for motor cars EU AD 1999/10/04

EGYPT Milk powder EU SG 2001/04/12

INDIA Acrylic fibers Italy, Spain, Portugal AD 1999/01/22

INDIA Acrylic fibre Germany, UK AD 2002/10/09

INDIA Acrylic fibre (below 1.5 denier) Italy AD 2002/09/19

INDIA Acrylonitrile butadiene rubber (ABR)

Germany AD 1997/07/30

INDIA Aniline EU AD 2001/06/26

INDIA Caustic Soda France AD 2001/06/26

INDIA Choline chloride EU AD 2002/01/14

INDIA Cold rolled flat products stainless steel

EU, Spain, Belgium AD 2002/12/05

INDIA Flexible slabstock polyol EU AD 2002/09/19

INDIA Graphite Electrodes Spain, Italy, Germany, Austria, France, Belgium

AD 1998/05/05

INDIA High styrene rubber EU AD 2002/01/15

INDIA Hydroxyl Amine Sulphate EU AD 2001/03/28

INDIA Iso Butanol(1) 2-Ethyl Hexanol(2)

other Oxo Alcohols(3)

EU AD 2000/08/18

INDIA Photographic Paper UK, France AD 2000/12/21

INDIA Purified Therephtalic Acid (PTA) Spain AD 2000/05/30

INDIA Seamless tubes Austria AD 2000/06/21

INDIA Sodium Cyanide EU AD 2000/06/06

INDIA Sodium Ferro Cyanide EU AD 2001/05/10

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INDIA Sodium nitrate EU AD 2002/11/29

INDIA Theophilline & Caffeine EU AD 2001/07/30

INDIA Thermosensitive paper (TSP) EU AD 2000/04/06

INDIA Vitamin AD3 EU AD 2002/05/21

INDIA Vitamin C EU AD 2000/09/15

INDIA Acetone EU SG 2000/01/27

INDIA Epichlorohydrin EU SG 2002/10/30

INDIA Phenol EU SG 1999/06/30

INDONESIA Sorbitol EU AD 2001/03/12

ISRAEL Woven pile weather stripping Spain, UK AD 1998/11/15

JORDAN Magnetic tapes EU SG 2002/02/05

JORDAN Sweetened biscuits EU SG 2001/09/01

KOREA Carbonless self-copy paper Germany AD 1998/03/10

KOREA Garlic EU SG 2000/06/01

LITHUANIA Non-dried pastry yeast France, Germany, Italy SG 2001/11/01

MALAYSIA Paper corrugating medium EU AD 1998/04/03

MALAYSIA Paper self copy EU AD 1997/04/20

MEXICO Crystal polystyrene EU AD 1999/09/23

MEXICO Parathion Methyl Denmark AD 2000/05/31

MEXICO Sorbitol UPS grade France AD 1998/07/28

MEXICO Frozen Beef EU CVD 1999/06/03

MOROCCO Bananas EU SG 2001/02/21

NEW ZEALAND Canned peaches EU CVD 1998/03/09

NEW ZEALAND Canned Peaches Greece AD 1998/03/09

PHILIPPINES Magnesite based refractory bricks

Germany AD 1998/06/09

PHILIPPINES Newsprint EU AD 1996/12/26

POLAND Yoghurt EU SG 1999/09/17

RUSSIA Caramels EU SG 2002/01/25

RUSSIA Glucose EU SG 2000/04/16

RUSSIA Refrigerators parts EU SG 2002/08/02

RUSSIA Starch EU SG 2001/05/25

RUSSIA Sugar EU SG 2000/04/01

SLOVAKIA Cane and bear sugar EU SG 2001/05/01

SOUTH AFRICA Acetaminophenol France AD 1999/06/18

SOUTH AFRICA Cable super tension Germany AD 2000/03/31

SOUTH AFRICA Circuit breakers France, Italy AD 1997/08/08

SOUTH AFRICA Disposable hypodermic needles Belgium, Germany, Spain, Ireland

AD 1999/03/12

SOUTH AFRICA Disposable hypodermic syringes Belgium, Ireland, Germany, Spain

AD 1999/03/12

SOUTH AFRICA Uncoated woodfree paper Sweden AD 1998/02/13

SOUTH AFRICA PVC based roll goods Germany, Spain, UK AD 2002/08/28

SOUTH AFRICA Ropes and cables of iron or steel Germany, UK AD 2002/02/28

SOUTH AFRICA Surgical Sutures Germany AD 2000/05/12

SOUTH AFRICA Self-copy paper Belgium, Germany, UK AD 2002/07/01

SOUTH AFRICA Suspension PVC UK, France AD 1997/

UKRANIA Disposable syringes EU SG 2001/06/08

48

USA Anhydrous sodium metasilicate France AD 1981/01/07

USA Antifriction bearings France, Germany, Italy, UK AD 1989/05/15

USA Brass sheet & strip France, Germany, Italy AD 1981/03/06

USA Certain hot-rolled carbon steel flat products

The Netherlands AD 2001/11/29

USA Certain pasta Italy AD 1996/07/24

USA Corrosion resistant carbon steel flat products

France, Germany AD 1993/08/19

USA Cut-to-length carbon quality steel flat products

France AD 2000/02/10

USA Cut-to-length carbon steel plate Belgium, Finland, Spain, Sweden, UK, Germany

AD 1993/08/19

USA Cut-to-length carbon steel plate Italy AD 2000/02/10

USA Grain-oriented electrical steel Italy AD 1994/08/10

USA Granular polytetrafluorenthylene Italy AD 1988/08/30

USA Industrial nitro-cellulose France AD 1983/08/10

USA Industrial nitro-cellulose Germany, UK AD 1990/07/10

USA Large newspaper printing presses and components

Germany AD 1996/09/04

USA Low enriched uranium France AD 2002/02/13

USA Oil country tubular goods Italy AD 1998/08/11

USA Pressure sensitive plastic tape Italy AD 1977/10/21

USA Seamless line and pressure pipe Germany, Italy AD 1995/08/03

USA Sorbitol France AD 1982/04/09

USA Stainless steel angle Spain AD 2001/05/18

USA Stainless steel bar Spain AD 1995/03/02

USA Stainless Steel bars Germany, UK, Italy, France AD 2002/03/07

USA Stainless steel butt-weld pipe fittings

Italy AD 2001/02/23

USA Stainless steel plate in coils Belgium, Italy AD 1999/05/21

USA Stainless steel sheet and strip in coils

France, Germany, Italy, UK AD 1999/07/27

USA Stainless steel wire rod France AD 1994/01/28

USA Stainless steel wire rod Italy ,Spain AD 1998/09/15

USA Stainless steel wire rod Sweden AD 1998/09/15

USA Sugar Belgium, France, Germany AD 1979/06/13

USA Sulphanilic Acid Portugal AD 2002/11/08

USA Sulfur chemicals Germany, UK AD 1991/02/19

USA Brass sheet and strip France CVD 1987/03/06

USA Carbon steel flat products Belgium, France Germany, Spain Sweden, UK

CVD 1993/08/17

USA Certain pasta Italy CVD 1996/07/24

USA Cut-to-length carbon steel plate France, Italy CVD 2000/10/02

USA Grain-oriented electrical steel Italy CVD 1994/06/07

USA Low enriched uranium France, Germany, Italy, Netherlands, UK

CVD 2002/02/13

USA Oil country tubular goods Italy CVD 1995/08/10

USA Seamless line and pressure pipe Italy CVD 1995/08/08

USA Stainless Steel bars Italy CVD 2002/01/23

USA Stainless Steel plate in coils Belgium, Italy CVD 1999/05/11

49

USA Stainless steel sheet and strip in coil

France, Italy CVD 1999/08/06

USA Stainless steel wire rod Italy CVD 1998/09/15

USA Sugar EU CVD 1978/07/31

USA Certain steel products EU SG 2002/03/05

USA Line pipe EU SG 2000/03/01

USA Steel wire rod EU SG 2000/03/01

VENEZUELA Blue-veined cheese EU CVD 1997/01/07

VENEZUELA Gruyère-tipe cheese EU CVD 1997/01/07

VENEZUELA Semi-hard cheese EU CVD 1997/01/07

VENEZUELA Syringes Italy AD 1999/05/14

50

ANNEX 7

Member States Affected by Definitive Measures imposed up to 31/12/2002

AD CVD TOTAL EU 15 9 24

AUSTRIA 5 0 5

BELGIUM 10 2 12

DENMARK 4 1 5

FINLAND 5 0 5

FRANCE 28 7 35

GERMANY 29 1 30

GREECE 1 2 3

IRELAND 2 0 2

ITALY 23 10 33

LUXEMBOURG 0 0 0

NETHERLANDS 6 1 7

PORTUGAL 2 0 2

SPAIN 16 1 17

SWEDEN 5 1 6

UK 14 1 15

* Please note that Safeguard Measures are imposed against one product independently of the country of origin. Therefore, it can be considered that all the EU Member States may be affected by the safeguard measures imposed by third countries.