22 nd International Iron Ore Symposium Trade defence investigations affecting steel industry views of a legal practitioner Yuriy Rudyuk Partner, VAN BAEL & BELLIS (Brussels, Belgium) Berlin 6 June 2016
ABOUT VAN BAEL & BELLIS Van Bael & Bellis is a leading independent law firm based in Brussels and Geneva. Established in 1986, the firm houses a multinational team of nearly 70 lawyers from over 20 different countries. Van Bael & Bellis is specializing in trade defence instruments and has handled more than 600 antidumping and anti-subsidy investigations world-wide, many of which involved steel and steel products (such as HRC, CRC, G.O.E.S, Re-bars, Stainless Steel, Seamless Tubes, etc.). 2
Protectionism is like cholesterol. The slow accumulation of restrictive measures has clogged the trade flows. -- Philip Kucharski, Chief Operating Officer, International Chamber of Commerce The best market is a market that is as free as possible from artificial restrictions within the rules of the World Trade Organization. -- Edwin Basson, Director-General, World Steel Association 3
TYPES OF AVAILABLE TRADE DEFENSE INSTRUMENTS (TDI) PERMITTED UNDER THE WTO RULES Anti-dumping measures Designed to counteract dumped imports (i.e. unfair trade practice); Grounds for imposition of anti-dumping measures: Dumping + injury + causality Countervailing (anti-subsidy) measures Designed to counteract subsidized imports (i.e. unfair trade practice); Grounds for imposition of anti-dumping measures: Subsidy + benefit + injury (adverse effects/serious prejudice)+ causality Safeguards measures Designed to counteract surge in imports (i.e. fair trade practice); Grounds for imposition of safeguard measures: Surge in imports + unforeseen developments + serious injury or threat thereof 4
TRADE DEFENSE INVESTIGATIONS GLOBALLY Anti-dumping investigations have been increasing since 2011 world-wide: Anti-dumping investigations initiated globally 400 359 372 350 300 250 200 150 157 226 246 264 296 311 234 220 200 203 165 218 217 173 165 208 287 236 233 100 50 0 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Source: Cliff Stevenson www.antidumpingpublishing.com 5
TRADE DEFENSE INVESTIGATIONS IN STEEL INDUSTRY Anti-dumping investigations targeting specific countries and industries: Main Targets of AD initiations, 2015 China 74 Korea 17 India 15 Taiwan 10 Vietnam 9 Japan 8 Brazil 7 Russia 7 Turkey 7 Indonesia 6 Mexico 6 Source: Cliff Stevenson www.antidumpingpublishing.com 6
TRENDS IN APPLICATION OF TRADE DEFENCE MEASURES Countervailing investigations in 1995-2015 and key targeted industries: Source: Cliff Stevenson www.antidumpingpublishing.com 7
TRENDS IN APPLICATION OF TRADE DISTORTING MEASURES Countervailing investigations in 1995-2015 involving steel industry: Source: Cliff Stevenson www.antidumpingpublishing.com 8
NEW PROTECTIONIST MEASURES AGAINST STEEL IMPORTS GLOBAL TREND Source: Eurofer 9
OVERCAPACITY IN CHINA IS THE MAIN DRIVING FORCE OF THE PROTECTIONIST MEASURES 10
RECENT AND ONGOING TDI CASES IN THE EU Year of initiation Steel and steel-related products Inv. type Exporting countries 2016 Rebars (certain) AD Belarus 2016 Hot-rolled flat steel products AS China 2015 Hot-rolled flat steel products AD China 2015 Tubes and pipe fittings of stainless steel AD China, Taiwan 2015 Cold-rolled flat products AD China, Russia 2014 Rebars (high fatigue performance steel concrete reinforcement) AD China 2014 Grain-oriented flat-rolled products or electrical steel (G.O.E.S.) AD China, Russia, USA, Korea, Japan 2014 Stainless steel cold-rolled flat products AD China, Taiwan 11
NEW POTENTIAL CASES IN THE EU IN THE NEXT SIX MONTHS: Hot-rolled flat steel products from Russia, Ukraine, Brazil, Turkey and Iran 2015 Value, Quantity, MT Unit price RUSSIA 662,670,375 1,714,111 387 CHINA 642,271,305 1,585,337 405 UKRAINE 401,484,438 1,084,470 370 IRAN 374,675,844 1,015,089 369 TURKEY 229,801,841 583,127 394 Steel Wire Rod from Belarus, Russia, Ukraine and Turkey 2014 Value, Quantity, MT Unit price UKRAINE 133,554,640 305,617 437 RUSSIA 47,531,011 112,777 421 MOLDOVA 88,798,618 200,607 443 TURKEY 77,235,801 160,806 480 Source: Eurostat 12
HRC LAST SIX MONTHS: Country Investigation type Exporting countries USA India Turkey EU On March 15, 2016 preliminary findings announced by Commerce in the on-going investigation into imports of HRC On 14 April 2016 initiation of a new AD investigation into imports of HRC On 20 April 2016 anti-dumping proceeding into HRC terminated 13 February 2016 AD proceedings against HRC and Heavy Plates initiated On 13 May 2016, AS investigation into HRC initiated AD AD AD AD/AS Australia, Brazil, Japan, Korea, the Netherlands, Turkey, the UK China, Japan, Russia, South Korea, Brazil and Indonesia China, France, Japan, Romania, Russia, Slovakia and Ukraine China 13
ON-GOING DISCUSSIONS ON THE MET STATUS OF CHINA Strong EU lobby of frequent AD users against MET status of China; EU Parliament adopted a resolution on 12 May 2016 calling the EU Council of Ministers not to grant MET to China; Big debate over a very technical and legal issue; EU Commission aims to conclude its assessment by summer break; Likely outcome? 14
EU LAUNCHED SURVEILLANCE OF STEEL IMPORTS: MONITORING TO ALLOW A QUICK RESPONSE On 24 May 2016, Commission Regulation (EU) 2016/670 on surveillance of steel imports published in the OJ - entered into force on 3 June 2016 and will remain applicable until May 2020; Vast product covered (CN headings 72 and 73); Surveillance document required for each customs clearance declaration; Detailed requirements for obtaining surveillance document; Low volume tolerance (+5%); Many importers complain about complex and burdensome procedures. 15
CONCLUSIONS Regular use of trade defence actions affecting steel imports will have an important effect on steel industry; Last six months show increasing AD/AS actions against HRC products; Clients from steel sector increasingly seek legal support in TDI investigations initiated in Pakistan, India, Turkey, China; China is likely to remain the main target of AD actions in the EU (with no-met in steel sector or with MET but important cost adjustments). 16
Thank you for your attention! CHAUSSEE DE LA HULPE 166, BRUSSELS 1170, BELGIUM T +32 (0)2 647 73 50 F +32 (0)2 640 64 99 yrudyuk@vbb.com WWW.VBB.COM