The Gazette 1987

"Pressure on the Screwdrivers" A recent development in the Anti-Dumping law of the European Communities.

Background — E.C. Trade Protection Framework Article 3 (b) of the Treaty of Rome sets out as one of the objectives of the E.C. "the establishment of a common customs tariff and of a common commercial policy towards third countries." Ar +i cle 113 of the Treaty dealing with the Common Commercial Policy (C.C.P.) is the legal basis for E.C. trade protection measures. The Community has had exclusive responsibility for the implementation of the C.C.P. since 1st January 1970 (the end of the transitional period). The Court of Justice has ruled that this consolidation of power in the hands of the Community precludes member states from implementing or adopting measures different from those which the Community seeks to adopt in relation to third countries. 2 The Community has adopted four instruments of trade protection: — (1) Anti-dumping measures: Regulation 2176/84 3 herein- after called the Regulation), Decision 2177/84 4 and Reg- ulation 1761/87; (2) Countervailing Measures: Regulation 2176/84 and ECSC Decision 2177/84; (3) Safeguard measures: these authorises safeguard measures where a product is being imported into the territory of that contracting party in such increased quantities and under such conditions as to cause or threaten serious injury to domestic producers in that territory of like or directly competitive products. (4) The New Commercial Policy Instrument. Since 1984 the Community has been empowered to take measures measures are authorised under various regulations, notably Regulation 288/82. 5 These regulations represent the implementation of Article XIX of GATT which

The economic s t r eng th of Japan and its cur rent large t r ad i ng surplus w i t h the rest of the Wo r ld has caused conce rn among its p r i nc i pal t r ad i ng par t ners i.e., t he US and EEC. Japanese I ndus t ry has been p r oduc i ng on a mass i ve scale and has dumped mu ch of its surplus in the EEC. Dur i ng 1 9 84 the EEC passed t ough an t i - dump i ng measures in order t o counter this f l ood of Japanese me r chand i se. Howeve r, t he Japanese ma n a g ed t o c i r c um v e nt t he a n t i - d ump i ng r u l es by e s t ab l i s h i ng a s s emb ly on ly ope r a t i ons ( " s c r ewd r i v er ope r a t i ons ") w i t h i n t he EEC. Du r i ng t he s ummer of 1 9 8 7, t he EEC amended its t r ade p r o t ec t i on code in order t o b r i ng these ope r a t i ons w i t h i n t he scope of t he an t i - dump i ng f r amewo r k. The cases aga i nst t he Japanese Co r po r a t i ons men t i oned in t h is ar t i c le are t he f i r st t o be t aken under t he new l aw. The ar t i c le analyses t he t ext of t he " s c r ewd r i v e r" l aw, t he new " A r t i c le 13 of Regu l a t i on 2 1 7 6 / 9 4 " , as amended by Regu l a t i on 1761 / 87 . 1 The con t en ts of t he Commi ss i on Not i ces concern i ng the proposed investigations are also d i scussed.

September 1st 1987 saw the opening of a new and vigorous chapter in the European Community Trade Protection Pro- gramme. On that day the law agreed by member states last July which allows the Community to impose anti-dumping duties on unfairly under-priced non- Community products assembled inside the EC was invoked for the first time. The measure is designed to prevent non-Community manufacturers from establishing plants within the EC to assemble products which are the subject of definitive anti-dumping duties. The action is being taken against Japanese firms, Brother Industries Limited, Canon Corporation, Matsushita Electric Company Limited, Tokyo Electric Company Limited, Sharp Corporation and Silver Seiko in relation to Electronic Typewriters. Tokyo Electric Company is also facing anti- dumping duties concerning electronic scales originating in Japan. The threatened imposition of measures described in a Financial Times article as "one of the toughest anti-dumping laws in the world" has caused grave concern in Japan. The Keidanren (Japanese Industry Confederation) has warned that this extension of anti-dumping rules could lead to a

reduction in Japanese investment in the Community (currently estimated to be two billion dollars worth of plant employing 72,000). The importance of the present investigations is increased as they could be just the first in a series of such moves by the Commission's External Relations Directorate. Other possible targets are Japanese backed operations

by CATHAL T. O CONAILL B.C.L., Solicitor

producing photocopiers, mechanical excavators and electric motors. It is envisaged by Commission sources that definitive anti- dumping duties will be imposed in the present cases within the next three months which is considerably quicker than the time for conventional anti-dumping duties. Indeed lawyers acting for the Japanese corporations involved have been quoted as saying that the Commission is trying to make their defence unnecessarily difficult by setting an unreasonably short time (1 5 days) to respond to the case.

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