On December 17, 2014, many polyester staple fiber companies in China finally breathed a long sigh of relief. On this day, the European Commission (hereinafter referred to as the “European Commission”) issued a final ruling, officially announcing the termination of the “initiation against polyester staple fiber products from China, India and Vietnam” which was launched on December 19, 2013 and lasted for a full year. Countervailing investigation.” So far, my country has won this case with the defense of no harm.
This is not the first time that my country’s polyester staple fiber (PSF) has been targeted by the EU, but we have won this countervailing war. In this case, the complainant is the European Manmade Fibers Association (CIRFS), which represents 25% of polyester staple fiber manufacturers in the EU. When CIRFS submitted the indictment in November 2013, it emphasized that “the products under investigation are polyester synthetic staple fibers, not carded, combed, or other processed products for spinning.” CIRFS provided preliminary evidence. It is believed that producers of this product from China, India and Vietnam benefit from various subsidies from their respective governments. If the countervailing investigation ultimately determines that there are subsidies and industrial damage, the investigation agency can decide to impose countervailing duties on my country’s polyester staple fiber exported to the EU.
However, we believe that the complainant’s intention is to eliminate competitors and thereby monopolize the market through trade remedy procedures permitted by the WTO. After that, we successfully responded to the lawsuit and won the case without prejudice.
Relevant experts pointed out that countervailing cases against my country’s textile and apparel products may increase in the future. Therefore, how to respond to countervailing investigations will be an urgent issue faced by relevant government departments and enterprises in my country.
A year-long game between the two sides
The EU polyester staple fiber countervailing case was a trade remedy case that the China Chamber of Commerce for Import and Export of Textiles focused on last year. This case is also the only EU countervailing case in the textile and apparel field in my country in recent years.
In December 2013, this case was officially filed. In January 2014, the European Commission’s sampling results came out. Yuanfang Industry (Shanghai) Co., Ltd., Jiangsu Huaxi Village Co., Ltd., Jiangsu Xinsu Chemical Fiber Co., Ltd., Xiamen Xianglu Chemical Fiber Co., Ltd., and Zhejiang Anshun Chemical Fiber Co., Ltd. Five companies were selected as sampling enterprises. Afterwards, the Chinese Ministry of Commerce and the five companies submitted questionnaires to the European Commission. In March 2014, European Commission investigation officials conducted on-site inspections on five sampled companies, and in June they conducted on-site government inspections on the Ministry of Commerce.
When the other party conducted relevant investigation work, under the unified coordination of the Ministry of Commerce, we were led by Jiang Hui, Chairman of the China Chamber of Commerce for Import and Export of Textiles, and formed a team together with well-known Chinese and foreign lawyers and representatives of key companies involved in the case to actively respond to the lawsuit.
The responding team analyzed that the filing of this case is a severe challenge to the polyester staple fiber industry involved: on the one hand, the polyester staple fiber products involved in the case are low-cost and simple in process, but the industry competition is fierce, supply exceeds demand, and prices It is an important means of competition. Once it is ruled that countervailing duties are levied, even if it is a low tax rate of 3% or 5%, relevant Chinese companies will be forced to withdraw from the EU market. On the other hand, the international market for the products involved has been affected by anti-dumping investigations by various countries. In the past 10 years, the European Union, the United States, Indonesia, Pakistan, South Africa and other regions have launched anti-dumping investigations on polyester staple fiber. The overseas market has become very narrow. The EU’s previous anti-dumping investigation ended in 2011. After two years of hard work, Chinese companies have gradually opened up the market. If this poor response results in taxation, not only will the door to the EU market be closed to Chinese companies, but it will also trigger a wave of filings in other countries.
The China Chamber of Commerce for Import and Export of Textiles and related companies still remember that in 2003, it was precisely because the EU was the first to launch an anti-dumping campaign against my country’s polyester staple fiber products that other countries and regions followed suit.
The responding team decided to respond proactively. Gu Haifeng, the manager in charge of the import and export business of Jiangsu Huaxi Village Co., Ltd., said that he has participated in many meetings and has come to Beijing twice to participate in discussions with the Ministry of Commerce, hoping that this case can be resolved as soon as possible. In order to increase the chances of successfully responding to the lawsuit, the China Chamber of Commerce for Textile Import and Export applied to the European Commission for a hearing. In late June 2014, the responding team sent a team to Brussels to attend the hearing and started negotiations and lobbying with relevant EU industry organizations. Work.
Xiao Ling, deputy secretary-general of the China Chamber of Commerce for Textile Import and Export, led staff from the legal department of the chamber of commerce, lawyers from UBS Law Firm, and EU attorneys in this case to attend the hearing at the Directorate General of Trade of the European Commission. Xiao Ling said in his speech at the scene that Chinese polyester staple fiber companies have experienced anti-dumping duties imposed by the European Commission for 10 years. In June 2011, the EU had just concluded its anti-dumping investigation into China’s polyester staple fiber products. It had only been less than two years since the two sides entered normal trade order, and relevant EU industries had actively prepared and initiated countervailing investigations. Xiao Ling asked the other party: “Since there is no damage, why do you propose new restrictions on the grounds of damage?” The Chamber of Commerce believes that the complainant’s intention is to eliminate competitors and monopolize the market through trade remedy procedures licensed by the WTO.
At the same time, after a comprehensive analysis of the data on industrial damage in the EU, the Chamber of Commerce believes that most of the data is positive, and the EU industry has notThere was no substantial or serious damage, and in the three years of 2010, 2011, and 2012, many data indicators fluctuated and did not decline all the time. The ups and downs of these data indicators are the result of normal competition in the market. Even if they face some difficulties, EU companies still need to make adjustments through market strategies and sales policies, rather than arbitrarily using the trade remedy policies licensed by the WTO in the name of implementing trade protectionism.
In addition, China’s polyester staple fiber products exported to the EU are of great significance to the EU’s broader downstream industry. Representatives of the Chamber of Commerce said that they have seen some downstream associations in the EU come out to oppose this investigation, which fully illustrates the In terms of the overall interests of the EU, more companies are opposed to restrictions.
Our lawyer stated in a speech at the scene that based on various data, there was no substantial damage to the EU industry, and the so-called damage was not caused by Chinese companies, especially government subsidies. In the calculation process of subsidies, the European Commission has unreasonably set up subsidy substitution practices and artificially increased the subsidy range for Chinese companies.
The efforts of the responding team paid off. On December 17, 2014, the EU made a final anti-subsidy ruling on polyester short fibers originating in China, India and Vietnam. The final ruling stated that since the subsidies for the products involved in the case imported from China and Vietnam were de minimis, and the products involved in the case imported from India were subsidized, but there was no causal relationship between the subsidies and substantial damage, it was decided to cancel the subsidy to China, India and Vietnam. Countervailing investigation on polyester staple fiber.
Gu Haifeng said that the EU officials who were present at the time did not express their opinions, which made our response team feel uncertain and uneasy before the results came out. However, I am quite satisfied with the final result.
Four-body linkage is the key to successful response
When Gu Haifeng summarized the successful response to the case, he believed that we mainly made efforts in several aspects: First, the company actively responded to the lawsuit. In the face of potential risks and related expenses, it is valuable for the company to have the courage to respond; The Ministry of Commerce seeks help, and companies can put pressure on the EU at the national level through the Ministry of Commerce. The third is to actively cooperate with the work of the Chamber of Commerce. The Chamber of Commerce coordinates multiple forces to respond to the lawsuit. The cooperation of companies with the work of the Chamber of Commerce has a great impact on the success of the lawsuit. The fourth is Contact local EU customers and associations so that local stakeholders can actively mediate with the European Commission.
Gu Haifeng said frankly that it is the most difficult thing to unite the companies involved in the case to actively respond to the lawsuit. The China Chamber of Commerce for Textile Import and Export also stated that after the case was filed, the Chamber of Commerce, under the guidance of the Trade Remedy and Investigation Bureau of the Ministry of Commerce, on the one hand, guided the companies to fill out questionnaires to respond individually, and at the same time conducted a large amount of persuasion and liaison work.
In addition, active communication with local stakeholders and complainants has also shown good results. During the hearing, a team from the China Chamber of Commerce for Import and Export of Textiles visited the Brussels-based EU Textile Association and the complainant, the EU Man-Made Fibers Association. The group held talks with the Director-General of the European Textile Association and the President of the European Man-Made Fibers Association in an attempt to resolve friction.
The hearing group organized by the China Chamber of Commerce for Import and Export of Textiles strives to win as many “friends” as possible in Europe. PSF is an upstream raw material. The hearing team thought that the investigation did not take into account the interests of downstream parties, so it met with a number of European downstream users, lawyers and relevant stakeholders, including the German Textile Industry Association, the European Spinning Association, and the European Unlimited Textile Association, German importers and users, German and Polish law firms, etc. The two parties communicated candidly and friendly about each other’s situations, exchanged legal opinions, coordinated positions, supported each other, and achieved the effect of joint defense.
In the end, the case was won. The Chamber of Commerce stated that this was a decision made by the European Commission based on listening to the opinions of all parties and under the tremendous pressure from EU countries at home and abroad who strongly opposed the restrictions.
The Chamber of Commerce believes that this case is another successful case of the four-body linkage mechanism in responding to trade remedy cases, successfully protecting my country’s polyester staple fiber industry and maintaining the market share of Chinese companies in Europe. At the same time, this case also enriched my country’s textile and apparel industry’s experience in responding to countervailing cases and laid a solid foundation for future trade relief work.
Wang Weidong, director of the legal department of the China Chamber of Commerce for Textile Import and Export, introduced that the “four-body linkage” mechanism is that in the process of trade remedy early warning and response, the four parties of the central government, local government, chambers of commerce and enterprises perform their respective responsibilities, coordinate and cooperate, and fully Give full play to their role and effectiveness and jointly safeguard the interests of the enterprise. The “four-in-one” mechanism is a very effective response mechanism when Chinese products are frequently subject to trade remedy investigations. This is not only because the government, chambers of commerce and enterprises have all participated in the response, but also because several parties have coordinated operations, forming a “1+1>2” effect.
The Ministry of Commerce plays an obvious role in the “four-body linkage” mechanism. Enterprises in the industry also believe that relevant national departments have actively responded to these cases and accumulated more and more experience. However, some companies also said that compared with other industries, government departments must treat the polyester staple fiber industry equally when it is rescued by the trade war, because behind the trade war is the survival of an industry and the employment of a large number of workers.
In addition, the problem of domestic enterprises not paying attention to technology development and weak technical barriers was once again exposed in this case. Polyester staple fiber is frequently targeted in trade wars between various countries because of its “low cost and simple process” and the industry’s “fierce competition and oversupply.”
Gu Haifeng believes that as environmental protection requirements in the EU market have increased, downstream nonwoven companies have begun to switch to PP, which is detrimental to polyester fiber manufacturers. The high technical content of PP has created technical barriers for some domestic companies.
The problem of weak technical barriers was once again exposed in this case. Polyester staple fiber is frequently targeted in trade wars between various countries because of its “low cost and simple process” and the industry’s “fierce competition and oversupply.”
Gu Haifeng believes that as environmental protection requirements in the EU market have increased, downstream nonwoven companies have begun to switch to PP, which is detrimental to polyester fiber manufacturers. The high technical content of PP has created technical barriers for some domestic companies.
