X-Ray Scanners – WTO panel rules on EU-China dumping row

March 5, 2013 — Leave a comment
Nuctech Fast Scan Vehicle and Container inspection system

Nuctech Fast Scan Vehicle and Container inspection system

Part of the problem here is that the Chinese have a significant market share in this type of equipment. In a short period of 10 years they have outstripped some of the more fancied American and European players in this business. While the dispute in question raises ‘ethical’ questions of the Chinese, it does seem to be a matter of sour grapes.

China’s anti-dumping duties on imports of x-ray security scanners from the EU violated global trade rules, according to a WTO panel ruling that was issued yesterday. [WTO Dispute Settlement, DS425]

Brussels brought the dispute in July 2011 after Beijing imposed duties ranging from 33.5 to 71.8 percent on the x-ray scanners. (See Bridges Weekly, 25 January 2012) The EU exports approximately €70 million of these scanners to China annually.

China imposed the duties after the EU had applied anti-dumping duties on Chinese cargo scanners one year earlier, which some viewed at the time as a “tit-for-tat” move.

The panel report primarily focused on procedural issues in Beijing’s investigation, specifically regarding how China calculated the anti-dumping margin, loosely defined as the difference between the price – or cost – in the foreign market and the price in the importing domestic market.

Beijing included more expensive “high-energy” scanners – which do not “look remotely like” the cheaper scanners, according to the panel report – in calculating the average domestic price, even though only cheaper “low-energy” scanners were exported. The panel found that this price comparison was “not consistent with an objective examination of positive evidence” required under WTO rules.

The panel also found that Beijing did not comply with certain due process and transparency requirements before imposing the duties.

The panel did not rule with the EU on all points, however, noting that Brussels had not established that Beijing had acted inconsistently in certain other procedural matters.

“I expect China to remove the measures immediately,” EU Trade Commissioner Karel De Gucht said on Tuesday in response to the panel ruling. “I will not accept tit-for-tat retaliation against European companies through the misuse of trade defence instruments.”

Under WTO rules, both sides have 60 days to appeal the ruling. In a statement, China’s Ministry of Commerce indicated that they would make a serious assessment of the case and reserved the right to appeal.

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