Industrial minerals industry welcomes new EU anti-dumping rules

By IM Staff
Published: Friday, 15 December 2017

The European industrial minerals industry has reacted positively to the European Union Council of Ministers’ formal approval on December 4 of new anti-dumping rules.

BY LIZ NEWMARK in Brussels

Scheduled to come into force on December 20, they may help the EU impose anti-dumping duties against dumped industrial mineral exports from China.

"We are in favor of anything that helps the internal market," European Industrial Minerals Association (IMA Europe) secretary general Dr Roger Doome told Industrial Minerals, emphasizing, "with magnesium, a critical raw material, there is a clear position of anti-dumping."

"If the new rules improve anti-dumping measures, then this is a good development," Doome made clear, adding, "It is always good to have corrective measures."

The crux of the changes to the anti-dumping rules is the introduction of a new "non-standard anti-dumping methodology" (NADM). This will allow anti-dumping duties to be imposed on imports from non-EU countries, where export industries benefit from significant market distortions or where their government has a pervasive influence on the economy. While it is not named, China is a clear target of these reforms, given its insistence on being treated as a free market country at the WTO, despite the often over-weaning impact of the Chinese state on its industry and economy.

The new anti-dumping system "will identify and redress cases where prices of imported products are artificially lowered due to state intervention," the Council said on December 4. In the industrial minerals sector, potential targets for anti-dumping duties against China, along with magnesium and magnesite, are graphite and chromite.

The dumping regulation change comes as the EU has agreed broader reforms to its collective trade defense instruments (TDIs), a deal being reached by the Council, European Parliament and European Commission the next day (December 5). This includes amendments to how the EU imposes countervailing as well as anti-dumping duties. In some cases, this will mean the EU can impose higher duties on dumped products in future by waiving the EU’s "lesser duty rule", which has in the past insisted that protection is limited to levels that would prevent harm to EU mineral and other producers. Now duties can match the level of dumping, even where EU producers do not need that level of protection to stop losing money because of cut priced import competition

The new TDI rules contain improvements such as a minimum target profit of 6% when calculating injury margins (so any less profit can be deemed to be a commercial problem). They also shortened the current nine-month investigation period, "to impose provisional measures and make the system more transparent," a Commission press note said. There will be an early warning system to help companies adapt to the new situation and smaller firms will be assisted by a special help desk.

"Together with the recently-agreed changes to the anti-dumping methodology, the EU’s tool box of trade defence instruments is in shape to deal with global challenges," EU trade commissioner Cecilia Malmström said, adding a sentiment echoed by all industries: "better late than never."

The negotiations on these TDI reforms have taken four years, while this is the first major overhaul of the EU’s anti-dumping and anti-subsidy instruments in 15 years, the Commission admitted.

Unsurprisingly, after all this time, the minerals industry is keen to see what happens in practice before making final judgements. "We are withholding any comment on the TDI agreement until the final text has been published," one executive, who requested anonymity, said.

"It is very difficult to draw conclusions about the future impact of the new rules for the EU industry as a whole, even more difficult to draw conclusions for one particular sector," he argued. "But we are hopeful that these new rules will allow the Commission to maintain the same level of efficiency as today and that it will not lead to a higher standard to open new cases and to lower duties."

And AEGIS Europe, an alliance of 29 companies representing EU manufacturing interests, and including Euromines, the European association of mining industries, metal ores and industrial minerals, and ceramic industry association Cerame-Unie, said on November 16 that "to be truly effective, EU industry depends on the Commission to vigorously apply and enforce the new rules".

The Commission said the anti-dumping measures "are formulated in a country-neutral way and in full compliance with the EU’s WTO [World Trade Organisation] obligations." However, most discussions surrounding the change, however, focus on China – that, from December 11, 2016, under the protocol of China’s accession to the WTO, is now seen formally as a market economy.

Mrs Malmström assured MEPs at the November 16 Parliament plenary debate that the system did not target China. But a Chinese ministry of commerce official based in Brussels disagreed, arguing "the new law granting separate treatment for imports under 'significant market distortions’ does not comply with WTO rules."

China will raise the matter with the WTO to "protect the rights of Chinese companies," he said, adding the move had already been questioned by many WTO members, including China.

And a manager from Spanish minerals company, who also requested anonymity, that told Industrial Minerals that when considering market distortions, it was "not just China," Russia and Turkey were also important mineral-producing countries.

For her too, success of the new system will "depend on how the European Commission implements it," she said. "We need to wait and see the different reports on different sectors and countries."

The Commission is currently carrying out economic assessments of China to see if there are "significant market distortions", but sectoral analysis is only provided for ceramics, steel, aluminium (in development) and chemicals.

Industrial mineral experts singled out ceramics and tableware - finished products made of industrial minerals - as important to the debate. On November 23, anti-dumping measures on Chinese imports of ceramic tiles were renewed for another five years.

But generally, "We are not suffering from massive imports," IMA-Europe’s Doome said. "Most minerals we deal with are either produced in the EU or exported, for example by [global material solutions company] Sibelco, while China tries to keep its minerals inside the country. We do not have many minerals 'long distance travelling’."

As for actual anti-dumping cases, "legally speaking, no comments can be made on any potential requests to launch trade defence proceedings until they are actually launched," a Commission source said. Investigations have been made into dumping of magnesia bricks and graphite electrode systems, but these terminated in 2011. Minerals industry experts also told Industrial Minerals "any ongoing cases are confidential."

At present, trade in minerals between the EU and China is healthy, judging by statistics from EU statistical agency Eurostat. The EU imported €337.7 million’s ($398 million) worth of salt, sulfur, earths and stone, plaster materials, lime and cement from China in 2016, a slight decrease on 2015’s trade level (€372.4 million).

Breaking this down, the EU imported a substantial €91.14 million’s worth of magnesium and magnesite materials from China in 2016, although this is less than the €129.96 million recorded in 2015.

Natural graphite imports were about three times as much: €31.96 million’s worth in 2016 and €32.1 million in 2015.

Trade of minerals to China is also buoyant – with a global €446.8 million’s worth exported in 2016 and €432.4 million in 2015.

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