Dumping Investigation: Korean Whiteware
12 December 2000
DUMPING INVESTIGATION: KOREAN REFRIGERATORS AND WASHING MACHINES
The Ministry of Economic Development today launched an investigation into claims that Korean-manufactured refrigerators and washing machines are being dumped on the New Zealand market. The investigation follows applications from Fisher & Paykel Ltd, the sole New Zealand producer of household refrigerators and washing machines.
Fisher & Paykel claims that imported refrigerators and washing machines are being sold to New Zealand importers at prices lower than on the Korean domestic market.
Fisher & Paykel has said that the imports are undercutting its prices and are causing it material injury in terms of declines in profits.
The Ministry is satisfied there is sufficient evidence of dumping and injury to warrant an investigation. The investigation will be completed within 180 days when the Minister of Commerce will determine whether the goods are being dumped thereby causing or threatening to cause material injury to the New Zealand industry.
An information sheet is attached. For further information contact Rory McLeod, Manager, Trade Remedies Group, Competition and Enterprise Branch on (04) 474-2991.
Background on Dumping Investigations
Goods Under Investigation
Investigations have been initiated, into the alleged dumping of the following refrigerators and washing machines:
Household type combined refrigerator-freezers fitted with separate top and bottom external doors or drawers up to and including a total gross volume of 500 litres and single door refrigerators with a total gross volume of not less than 60 litres, the capacities determined by standard AS/NZS4474.1997.
Household fully automatic washing machines with a dry linen capacity not exceeding 10kg, the capacity determined by standard AS/NZS2040.
The application was lodged by Fisher & Paykel Ltd, the sole New Zealand producer of household refrigerators, refrigerator-freezers and washing machines.
Major exporters are understood to be Daewoo Electronics, LG Electronics, and Samsung Electronics.
Major importers of both refrigerators and washing machines are understood to be Email Appliances NZ) Ltd, Eurolife Ltd, LM Rankine Trading Co Ltd and Radiola Corporation Ltd. In addition, Casmor International Ltd, Fisher & Paykel Ltd and Whirlpool Australia Ltd are understood to be significant importers of refrigerators.
Fisher & Paykel claims that export prices to New Zealand of refrigerators, refrigerator-freezers and automatic washing machines are significantly lower than normal values in Korea. Fisher & Paykel claims that export prices are lower than normal values in Korea by amounts which represent from 17 to 41 percent for most refrigerators and from 9 to 49 percent for washing machines.
Goods are said to be dumped if the price at which they sold to New Zealand importers is less than their normal value in the country of export, in this case Korea.
Dumping is not illegal, nor is it inconsistent with the GATT and other World Trade Organisation Agreements. WTO members have agreed, however, that action may be taken against dumped goods which cause or threaten to cause material injury to a domestic industry.
Imports of Korean refrigerators and refrigerator-freezers increased from 11,645 units in the year ended March (YEM) 1999 to 15,416 units in the YEM 2000. At the same time, imports from other sources increased from 32,899 to 33,251 units.
Imports of Korean washing machines increased from 688 units in the year ended March (YEM) 1999 to 5,729 units in the YEM 2000. At the same time, imports from other sources increased from 39,749 to 48,054 units.
The Trade Remedies Group of the Ministry of Economic Development completes dumping investigations in terms of the Dumping and Countervailing Duties Act 1988 and consistent with the WTO Anti-dumping Agreement.
On initiation of investigations, known exporters and New Zealand importers are contacted by the Ministry and asked to provide information to assist the investigations. Investigations involve thorough checking of the evidence in the application document, and extensive gathering and analysis of industry and trade data to establish whether dumping is causing or threatening to cause material injury to the New Zealand industry.
Within 150 days of initiating an investigations, in this case by 11 May 2001, the Ministry is required to inform all interested parties of the facts and conclusions likely to form the basis for any final determinations.
The investigations must be completed by 180 days from initiation, that is by 10 June 2001. Within that time the Minister of Commerce must make a final determination of whether or not the goods are dumped and are causing or threatening to cause material injury to the industry.
Applicant industries may ask that provisional anti-dumping duties be applied to dumped imports. Provisional anti-dumping duties may be imposed after 60 days of investigation if they are needed to prevent injury during the rest of the investigation. Fisher & Paykel has asked that provisional anti-dumping duties be applied.
If the Minister of Commerce makes a final determination that dumping is causing or threatening to cause material injury to the New Zealand industry, the Minister may impose anti-dumping duties. Any duties would be set at a level calculated to remove the injury to the local industry – and as such can be lower than the margin of dumping.