Anti-Dumping Duties Imposed On Korean Refrigerators

The Minister of Commerce has imposed provisional anti-dumping duties on refrigerators from Korea.

The duties will prevent material injury to Fisher & Paykel Ltd until a full dumping investigation can be completed.

Dumping investigations were launched by the Ministry of Economic Development late last year following claims by local producer Fisher & Paykel Ltd that Korean refrigerators and washing machines were being sold to New Zealand importers at prices lower than on the Korean domestic market.

The Ministry has reached preliminary conclusions that Korean refrigerators are being dumped and are causing material injury to the local refrigerator industry by undercutting prices, and that duties are necessary to prevent material injury being caused during the investigation.

The duties range from 25 to 71 percent depending on the Korean supplier and the size of the refrigerator.

Full details of the duties are shown in the background information attached.

Preliminary findings on Korean washing machines are expected shortly.

The Ministry’s investigations into both refrigerators and washing machines will be completed in early June.

An information sheet is attached.
For further information contact Martin Garcia, Acting Team Leader Investigations, Trade Remedies Group, Competition and Enterprise Branch on (04) 474 2183

BACKGROUND ON THE REFRIGERATOR DUMPING INVESTIGATION

Goods Subject to Provisional Anti-dumping Duties

Provisional anti-dumping duties will apply to the following goods:

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.

Rates of Duty

Duties have been imposed at full weighted average margins of dumping (see below for an explanation of “dumping”) at the following percentages of the value for duty at the time of importation.

Capacity (Litres) 60 - 100 101 - 200 201 - 300 301 - 400 401 - 500
Samsung 64 39 26 39 48
LG 71 39 25 59 48
Daewoo 62 39 25 47 48
Other suppliers 64 39 25 49 48

Note: Rates of duty have been set for all size ranges within the description of goods. The existence of a duty rate does not necessarily indicate that an exporter supplied refrigerators in that size range.

Completion of Investigation

The investigation will continue until early June. The Minister must make a final determination by 10 June 2001.

If the amount of any provisional duty paid by importers during the investigation period exceeds the amount, if any, of any final duty, the amount of the excess may be refunded.

Interested Parties

The application for investigation was lodged by Fisher & Paykel Ltd, the sole New Zealand producer of household refrigerators.

Major exporters are Daewoo Electronics, LG Electronics, and Samsung Electronics. Korean exporters declined to provide information.

Importers of refrigerators are Casmor International Ltd, Electrolux Home Products (NZ) Ltd, Fisher & Paykel Ltd, LM Rankine Trading Co Ltd and Radiola Corporation Ltd and Whirlpool (Australia) Pty Ltd. These importers co-operated with the investigation. Fisher & Paykel imports small bar type refrigerators from Korea to complement its range.

Dumping

The investigation to date has found that all Korean refrigerator imports are being dumped.

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. The difference is the margin of dumping, which has been found to range from 2 to 85 percent of export prices examined over a one-year period.

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.

Injury

The investigation to date has found that imports of Korean refrigerators and refrigerator-freezers have increased significantly. Fisher & Paykel’s prices have been undercut by most of the dumped imports, its prices have been suppressed and profits have declined.

Washing Machine Investigation

The Ministry is investigating concurrently whether Korean washing machines are being dumped and are causing material injury to the New Zealand industry. Preliminary findings on that investigation will be made shortly, followed by the Minister’s decision on whether to impose provisional anti-dumping duties.

Investigations

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.

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 investigation, 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.

Anti-dumping Action

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 material injury being caused during the rest of the investigation. Fisher & Paykel 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 final anti-dumping duties. Any final 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.

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