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Anti-dumping duties imposed on Korean whiteware

11 June 2001 Media Statement
Anti-dumping duties imposed on Korean refrigerators and washing machines.


Commerce Minister Paul Swain has imposed final anti-dumping duties on refrigerators and washing machines from Korea.

Goods are said to be dumped if the price at which they are sold to New Zealand importers is less than their normal value in the country of export.

Paul Swain said the duties are designed to prevent material injury to Fisher & Paykel Ltd caused by dumping.

"Dumping investigations were launched by the Ministry of Economic Development in December," he said.

"The investigations followed 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 investigations found that all the Korean refrigerator and washing machine imports it looked at were being dumped on the New Zealand market and have caused material injury to Fisher & Paykel," he said.

Paul Swain said Korean exporters did not cooperate with the investigations, which was disappointing.

"However the Ministry did receive full cooperation from importers and it consulted with the Korean Government," he said.

The final duties replaced provisional anti-dumping duties imposed in March and April of this year. The final duties on all sizes of washing machines and most sizes of refrigerator are lower than the provisional duties. In some cases the reductions are substantial.

"New Zealand is an open competitive economy and our manufacturers are happy to compete on an equal footing with international suppliers. However we will not stand for unfair practices that put New Zealand manufacturers and local jobs at risk," Paul Swain said.

ENDS


BACKGROUND ON THE WASHING MACHINE DUMPING INVESTIGATION

Goods Subject to Anti-dumping Duties

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 on exports by the three main Korean exporters Samsung Electronics, LG Electronics and Daewoo Electronics using a “reference price” method. Under this method duty is only payable if the Korean washing machines and refrigerators are priced below the reference price. If the goods are priced below the reference price the duty payable is the difference between the reference price and the price of the goods.

Duty has been imposed at less than the margin of dumping on all sizes of washing machine exported by Samsung, LG and Daewoo and reference prices have been set in NZ dollars.

For any suppliers other then Samsung, LG and Daewoo, a percentage duty has been imposed.

The reference prices are set out below. The duty payable is the difference between this price and the value at which the product is imported. For example, if a LG washing machine of 5.5kgs capacity is imported with a FOB value of NZ$450.00, duty of $53.36 is payable ($503.36-$450.00).

Capacity (Kilograms) Less Than 4.5 4.6 – 5.5 5.6 – 6.5 6.6 – 7.5 7.6 - 10
Samsung Electronics Co. 373.64 503.36 616.98 604.62 764.19
LG Electronics Inc. 398.66 503.36 505.54 623.86 762.01
Daewoo Electronics Co. 373.64 503.36 603.03 560.59 764.19
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.

Interested Parties

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

Major Korean exporters are Daewoo Electronics, LG Electronics, and Samsung Electronics. Only these exporters were investigated and they 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 cooperated with the investigation.

Dumping

The investigation has found that all Korean washing machine imports are being dumped.

Goods are said to be dumped if the price at which they are 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 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, profits, return on investments and cash flow have declined, and there has been an adverse impact on wages and investment.

Like Goods

A New Zealand industry seeking anti-dumping action must produce goods that are “like” the imported goods, ie., it must produce goods that are either identical to, or have characteristics that closely resemble, the imported goods.

The investigation has 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 found that the 5.5, 7.5 and 8 kilogram top loading washing machines produced in New Zealand by Fisher & Paykel are like goods to the Korean 4.5 and 6.5 kilogram top loading washing machines. (Fisher & Paykel transferred the production of its 6.5 kilogram washing machines to Australia in 1999 and does not produce a 4.5kg machine).

The anti-dumping duties therefore apply to front loading as well as top loading washing machines, and to 4.5 and 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 was required to inform all interested parties of the facts and conclusions likely to form the basis for any final determinations. In this case the essential facts and conclusions report was sent to the interested parties on 10 May 2001. Submissions made by parties in response to the essential facts and conclusions report were taken into account in the final report.

Anti-dumping Action

Provisional anti-dumping duties were imposed by the Minister on 3 April to prevent material injury to Fisher & Paykel being caused during the rest of the investigation.

The final duties are set at a level calculated to remove the injury to the local industry attributable to dumping and this has resulted in duties being set at less than the margin of dumping, as noted above under “Rates of Duty”.

The final anti-dumping duties will apply retrospectively ie. from the day the provisional duties were imposed (3 April 2001). As most of the final duties are lower than the provisional duties, it is possible that some provisional duty has been paid at a higher rate than the final duty. If the amount of any provisional duty paid by importers during the investigation period exceeds the amount of the final duty, the amount of the excess may be refunded.

ENDS

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