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Turkey Imposes Definitive Anti-Dumping Measures on Chinese-origin Welding Machines

Hong Kong traders with an interest in the Turkish market may like to know that Turkey imposed definitive anti-dumping duties on certain welding machines originating in mainland China. This is laid down in Decree No. 2015/44 on the Prevention of Unfair Competition from Imports, published in the Turkish Official Journal, No. 29447, dated 16 September 2015. It may be recalled that Decree No. 2009/9 on the Surveillance of Imports had already put in place an import monitoring on 9 August 2009 of imports of welding machines with a value of less than 20 USD/kg.

The rates that are imposed within the framework of Decree No. 2015/44 for certain welding machines are illustrated in the following table. These are applicable to imports from mainland China as from 16 September 2015:

Table: Rates of anti-dumping measures
Table: Rates of anti-dumping measures

 

The dumping investigation had been initiated (see: Decree No. 2014/27 on the Prevention of Unfair Competition from Imports, published in the Turkish Official Journal, No. 29071, dated 25 July 2014) following a complaint filed by Magma Mekatronik Makine Sanayi ve Ticaret A.Ş. and supported by Nurkay Makine ve Elektronik Sanayi ve Ticaret A.Ş.

Interestingly, Kaynak Tekniği Sanayi ve Ticaret A.Ş., both importer and producer of the product concerned, challenged the admissibility of the complaint. Nevertheless, its argument was not accepted since the production volume of the complainant and supporting producers accounted for more than 50% of the production volume of the supporting and opposing producers as provided by Article 20(3) of the Regulation on the Prevention of Unfair Competition from Imports.

The Ministry had determined twenty-one exporters in mainland China; however, only the six cited in the above table cooperated in the investigation. Among these, all except for Zhejiang Kende Mechanical & Electrical Co., Ltd. (“Zhejiang Kende”) admitted not to have operated under market economy conditions and applied for an individual dumping margin calculation based on the comparison between the constructed normal value and their own export prices determined on the basis of their individual export sales to Turkey. Zhejiang Kende, on the other hand, opposed the selection of Turkey as the chosen analogue country and proposed Ukraine instead. This argument was rejected on the grounds that Turkey was a market economy country, verification of the data collected from the Turkish industry would be easier and the selection of Turkey as the analogue country had already been announced in the initiating Decree.

Normal value calculations were consequently made on the basis of the data collected on the Turkish market whereas companies’ own data were used for the determination of the export price.

Upon comparison of normal value with the export price, the cooperating companies’ dumping margins were determined, as illustrated in the following table. However, the dumping margins mentioned below, calculated during the investigation, are higher than the actual duties that have been imposed since lower duty rates were considered sufficient to remove the injury to the local Turkish industry:

Table: Cooperating companies dumping margins
Table: Cooperating companies dumping margins

 

Hong Kong traders may also like to know that imports of welding machines from mainland China accounted for almost 100% of total imports of the product concerned between 2011 and 2013. The volume of imports from mainland China was 3,293 units in 2011, 1,172 units in 2012 and 2,364 units in 2013. As for the unit price, Chinese exporters charged an average unit price of 289 USD in 2011, 323 USD in 2012 and 194 USD in 2014. These facts, when considered together with the performance of the domestic industry, led to the finding of injury to the Turkish welding machine industry.

The investigating authority, i.e. the Ministry of Economy of the Republic of Turkey, observed a significant decline in the domestic production and domestic sales of the product concerned. The decline in production negatively affected capacity utilisation, and the slowing sales caused an accumulation of stocks. Furthermore, increasing costs of production affected domestic unit prices that were being charged on the Turkish welding machine market.

After the final disclosure, two substantial arguments were raised concerning other reasons which might have caused injury to the domestic industry:

  • In September 2009, welding machines other than those equipped with PFC (Power Factor Correction) were banned from the Turkish market. This new technical requirement was reflected as an increase in producers’ costs and therefore in the domestic sales price of the product concerned. Similarly, increasing stocks were explained by returns of the products without PFC which were no longer permitted on the market.
  • Competition among domestic producers was raised as an argument to explain the loss of market share of the domestic industry.

The investigating authority admitted that the abovementioned points contributed to the injury to a certain extent; however, these points were not considered strong enough to break the causal link between the Chinese-mainland origin dumped imports and material injury being suffered by the domestic industry.

Content provided by Picture: HKTDC Research
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