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

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.

Ready for a cock-fight?

Brazil has taken the first legal step at the World Trade Organisation to challenge South Africa’s use of anti-dumping measures on shipments of Brazilian poultry meat, the global trade body said in a statement on Friday. Brazil has “requested consultations” with South Africa over South Africa’s accusation that Brazilian imports were “dumped”, or sold at an unfairly low price that damaged South Africa’s own poultry sales, the WTO said. If the consultations fail to resolve the issue, in 60 days’ time Brazil could ask the WTO to set up a panel to adjudicate.

The statement did not give any more details, but South Africa’s International Trade Administration Commission (ITAC) has imposed anti-dumping duties on frozen chickens and chicken meat imported from Brazil after investigating suspected dumping in 2008-2010. In 2010, Brazil accounted for 94.2% of South Africa’s total 26,916 tonnes of boneless chicken imports and 44.6% of the total 29,039 tonnes of whole chicken imports, ITAC’s investigation report said in January.

After calculating the extent of the unfair competition, South Africa put a provisional anti-dumping duty of 62.93% on whole chickens and 46.59% on boneless cuts from Brazil, except for boneless cuts from Aurora Alimentos, which would incur a duty of 6.26%.  The dispute is the first between Brazil and any African country and only the fourth brought against South Africa at the WTO.

All of the previous three cases, brought by India, Indonesia and Turkey, also concerned South Africa’s use of anti-dumping measures to protect its market from unwanted imports. None of those three disputes advanced to the panel stage. India and Turkey did not press their cases and Indonesia withdrew its challenge after South Africa withdrew its anti-dumping measures. Source: News24