I thank the Chairman and members of the committee for inviting me to attend. This is my first time appearing before the committee and it is the first time I have presented information on this sphere of activity to an Oireachtas group. I hope to explain it in the best way possible. There is considerable detail here but the essence of the matter is relatively straightforward.
The matter before the committee concerns proposed amendments to the basic trade defence legislation of the European Union, otherwise known as the anti-dumping regulations. The EU legislation has been in force since 1996 and this instrument plays a key role as a trade policy tool. Other World Trade Organisation members use similar instruments which are designed to counter unfair trade practices. Therefore, the EU basic legislation incorporates provisions from the World Trade Organisation Uruguay Round agreement on anti-dumping measures.
A company in Ireland, or another member state of the European Union, which feels that a third country importer is practising unfair pricing by having items dumped into the Community market can invoke these rules and regulations and go to the European Commission to commence an investigation into those anti-dumping procedures. When an investigation of that nature occurs member states are represented on a consultative committee. This is informed of the detail of the investigation undertaken by the Commission on behalf of the Community producer, or producers, and in that investigation the Commission must indicate if there is a finding of dumping, where the product is dumped; if there has been material injury to Community producers in that regard; if there is a causal link between the injury to the Community producer and the dumped product, and more broadly, if there is a Community interest in this area. In other words, if anti-dumping measures are to be taken, which are normally duties to be applied, the difference between the dumped product price and the product price on the European market is the margin of anti-dumping duty that would be applied to bring the product back up to a fair price. The Commission in doing this must take account of a range of factors, not just the producer interest but also the user interest. There may be users of this type of material and consumer interest as well. It must take account of the broad Community interest and indicate whether this would be best served by implementing that measure.
The document before the committee changes that basic regulation in one respect, namely the voting. This amendment to the basic regulation has in mind a situation whereby if seven member states vote in favour of an anti-dumping measure and six against, and there are two abstentions, the abstentions are counted as "No" votes. If one were to ignore abstentions and look at the vote from a simple majority point of view, seven in favour and six against would suggest that the Commission proposal to introduce anti-dumping measures would be agreed and adopted. That is not the case in trade defence instruments because the voting arrangements are such that abstentions, which mean that a member state has not decided for or against, are categorised as "No" votes.
The Commission has recently lost two such cases, one concerning carbon black imported from Russia and the other steel items from Egypt, due to the number of abstentions in those cases. It contends therefore that this brings the anti-dumping regime into disrepute. The use of abstentions when a state does not take a decision one way or the other leaves the state open to political lobbying and the current proposal from the Commission being examined by the Council is that these abstentions would in effect be nullified and have a neutral effect on future voting. As we have stated, and as the most recent amendment, No. 799, states, the two abstentions would be disregarded and the decision would be made by simple majority. If seven members were in favour and six were against the proposal, it would be adopted by the Council on the basis that abstentions are regarded as neutral. This is the essence of the matter.
Reference was made to COM2003/799, which is a work in progress. It is a follow on in the ongoing discussions on this proposal since the original proposal was presented to Council members in June of last year. However, there is a large measure of support in respect of further amendments associated with COM2003/799. Should this support solidify, it is likely that the proposal will be adopted by Council quite soon. I hope this outlines to members what is involved. I am available to answer any further questions.
