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Anti-Dumping Duties Imposed On Washing Machines

Anti-Dumping Duties Imposed On Korean Washing Machines


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

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

The imposition of these duties follows the recent decision to impose provisional anti-dumping duties on refrigerators from Korea.

Dumping investigations were launched by the Ministry of Economic Development late last year following claims by 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 washing machines are being dumped and are causing material injury to the local washing machine industry by undercutting prices, and that duties are necessary to prevent material injury being caused during the investigation.

The duties range from 52 to 93 percent depending on the Korean supplier and the size of the washing machine. Full details of the duties are shown in the background information attached.

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


BACKGROUND ON THE WASHING MACHINE DUMPING INVESTIGATION

Goods Subject to Provisional Anti-dumping Duties
Provisional anti-dumping duties will apply to the following goods:
Household fully automatic washing machines with a dry linen capacity not exceeding 10kg, the capacity determined by standard AS/NZS2040.

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 (Kilograms) < 4.5 4.6 – 5.5 5.6 – 6.5 6.6 – 7.5 7.6 - 10
Samsung 52 93 70 75 70
LG 52 93 65 79 70
Daewoo 52 93 68 63 70
Other suppliers 52 93 68 75 70

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 washing machines 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 washing machines.
Major exporters are Daewoo Electronics, LG Electronics, and Samsung Electronics. Korean exporters declined to provide information.
Importers of washing machines are Electrolux Home Products (NZ) Ltd, Eurolife Ltd, LM Rankine Trading Co Ltd and Radiola Corporation Ltd. These importers co-operated with the investigation.

Dumping
The investigation to date has found that all Korean washing machine 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 42 to 105 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 washing machines have increased significantly. Fisher & Paykel’s prices have been undercut by most of the dumped imports, its prices have been depressed and suppressed, and its sales, market share and profits have declined.

Like Goods
A New Zealand industry seeking anti-dumping action must produce goods that are “like” the imported goods, i.e., it must produce goods that are either identical to, or have characteristics that closely resemble, the imported goods.
The investigation has provisionally found that the top loading washing machines produced by Fisher & Paykel are like goods to the Korean front loading washing machines. The investigation has also provisionally found that the 5.5 and 7.5 kilogram top loading washing machines produced by Fisher & Paykel are like goods to the Korean 6.5 kilogram top loading washing machines. (Fisher & Paykel transferred the production of its 6.5 kilogram washing machines to Australia in 1999).
The provisional anti-dumping duties therefore apply to front loading as well as top loading washing machines, and to 6.5 kilogram machines.

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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