11 Aug 2017
Open Mesh Fabrics from Mainland China: EU Industry Calls for United Front Against Allegedly Illegal Trade Practices
In a press release published on 20 July 2017, GlassFibreEurope, the European Glass Fibre Producers Association, and Tech-Fab Europe collectively called on all actors in the glass fibre value chain to stand united in the fight against mainland China’s alleged illegal trade practices.
Axel Jorns, Secretary General of GlassFibreEurope, stated that the glass fibre industry “must pull the entire value chain together to stop the virulent spread of illegal dumping and circumvention practices by [mainland] China” and “must demand that international trade rules are respected and enforced by the European Commission”. According to Jorns, the predatory dumping by exporting producers in mainland China is a recurrent and critical issue for both the upstream as well as the downstream industries in the European glass fibre sector.
These statements were triggered by the most recent development in the EU’s trade defence case against open mesh fabrics from mainland China. The anti-dumping investigation against open mesh fabrics was initiated on 20 May 2010, and the European Commission has been imposing definitive anti-dumping duties ranging from 48.4% to 62.9% on these products since 10 August 2011. While the duties were initially set to expire five years later, on 10 August 2016, a request for an expiry review was lodged on 4 May 2016 by the Alliance for the Defence of Open Mesh Fabrics, the association of EU producers. The expiry review has been ongoing since 9 August 2016, and the European Commission disclosed its findings to the involved parties on 26 June 2017.
According to the EU glass fibre manufacturing industries, the European Commission proposed the termination of the anti-dumping duties despite clear and irrefutable evidence demonstrating the likelihood of a continuation or recurrence of dumping and injury if the measures were to be removed. They argue that the analysis in the Commission’s disclosure is incomplete and does not consider all relevant evidence, which would support the continuation of the duties. As an example of a relevant factor which was not examined by the Commission when evaluating the likelihood that injury would recur, the EU producers refer to the fact that mainland China’s overcapacity of open mesh fabrics is equal to the EU’s total consumption.
The manufacturing industries emphasise the massive overcapacity which has been built up in mainland China over the past years, and the attractiveness of the EU market to the Chinese producers of open mesh fabrics. In order to substantiate the latter, they refer to the fact that Chinese producers rapidly obtained more than 50% of the EU’s market share before the EU imposed anti-dumping duties on imports of open mesh fabrics in 2011.
EU producers expect a significant increase in dumped imports from mainland China on the EU market if the measures were to be terminated, and argue that such an increase would have a devastating impact on EU producers of open mesh fabrics. Jorns also refers to mainland China’s “13th 5-Year New Materials Plan”, which he describes as a clear state-backed strategy to support Chinese producers by underwriting products being exported, below cost, to third markets (and in particular to the EU market).
Besides the initial anti-dumping investigation on open mesh fabrics from mainland China, three anti-circumvention investigations were initiated between 10 November 2011 and 10 April 2013. As a result, the anti-dumping duties were extended to imports of certain open mesh fabrics of glass fibres from Malaysia as of 25 July 2012, to such imports from Taiwan and Thailand as of 17 January 2013 and to such imports from India and Indonesia as of 21 December 2013.
In addition to the EU’s trade defence case against open mesh fabrics from mainland China, other trade defence measures are also in place against other types of glass fibre fabrics originating in mainland China. European glass fibre producers have played a major role in the imposition of such trade defence measures.
First, the European Commission imposed definitive anti-dumping duties (ranging from 7.3% to 13.8%) on imports of certain continuous filament glass fibre products originating in mainland China from 16 March 2011. Due to a partial interim review, the level of the duties was altered from 24 December 2014, ranging from 4.9% to 10.3%. While the duties were initially set to expire on 16 March 2016, the measures were re-imposed on 25 April 2017 following an expiry review. The anti-dumping duties, ranging from 0% to 19.9%, are now set to expire on 25 April 2022. The initial anti-dumping proceeding, the partial interim review and the expiry review were all initiated by the European Glass Fibre Producers Association.
Second, the European Commission imposed definitive countervailing duties (ranging from 4.9% to 10.3%) on imports of certain filament glass fibre products originating in mainland China on 24 December 2014. This anti-subsidy proceeding was also triggered by the European Glass Fibre Producers Association. The measures are currently set to expire on 23 December 2019.
Despite its disclosure to interested parties, the European Commission has not yet published its final decision on the expiry review against open mesh fabrics originating in mainland China. While the Commission appears inclined to terminate the anti-dumping duties, it is, theoretically, not excluded that the Commission may decide to impose the definitive anti-dumping duties for an extended period of time.