Certain Galvanised Steel Pipe Exported from Thailand

 

Conclusions and Recommendations

The Review Officer has considered the claims by the three applicants, and, in accordance with Subdivision C of Division 9 of the Customs Act 1901 (the Act), has conducted a review of the decision of the Minister for Justice and Customs to publish dumping duty notices in respect of imports of certain galvanised steel pipe exported from Thailand.

First Steel’s Application

Having regard to the information in relation to Customs’ investigation, the Review Officer accepts Customs’ findings in relation to First Steel that:

(i) it was appropriate to cumulate First Steel’s exports with the other two Thai exporters; and

(ii) First Steel’s exports were dumped and this caused injury to the Australian industry producing like goods.

The Review Officer does not accept Customs’ findings in relation to First Steel that Customs was satisfied that there were no factors other than the exportation of First Steel’s goods that could have caused or threatened to cause material injury to the Australian industry.

The Review Officer recommends that the Minister require the CEO of the Australian Customs Service, in respect of material injury and causal link, to re-assess Customs’ findings.

Pacific Pipe’s Application

The Review Officer accepts Customs’ findings in relation to Pacific Pipe Co Ltd that:

(i) Pacific Pipe should not be allowed a due allowance adjustment for a duty drawback;

(ii)Customs did address the issue of currency trends in its investigation.

The Review Officer does not accept Customs’ findings in relation to Pacific Pipe Pty Ltd that Customs was satisfied that there were no factors other than the exportation of Pacific Pipe’s goods that could have caused or threatened to cause material injury to the Australian industry.

The Review Officer recommends that the Minister require the CEO of the Australian Customs Service, in respect of material injury and causal link, to re-assess Customs’ findings.

SAHA Thai’s Application

The Review Officer accepts Customs findings in relation to SAHA Thai Steel Pipe Co Ltd in its assessment of:

(i) export prices, normal values and dumping margins;

(ii)due allowance adjustments; and

(iii)the appropriate calculation of a Non-Injurious Price

The Review Officer also accepts that Customs did not err in its consideration of a price‑undertaking offer made by SAHA Thai.

The Review Officer does not accept Customs’ findings in relation to SAHA Thai that Customs was satisfied that there were no factors other than the exportation of SAHA Thai’s goods that could have caused or threatened to cause material injury to the Australian industry.

The Review Officer recommends that the Minister require the CEO of the Australian Customs Service, in respect of material injury and causal link, to re-assess Customs’ findings.

Review of a Ministerial decision to take anti-dumping action against imports of certain galvanised steel pipe exported from Thailand

BACKGROUND

1.         As a member of the World Trade Organisation (WTO), Australia is bound by the World Trade Organisation Uruguay Round Anti-Dumping Agreement and Agreement on Subsidies and Countervailing Measures (the WTO Agreement).  Article 2.1 of the WTO Agreement provides that a product is considered dumped, ieintroduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.  (The export price is the price paid before any costs in respect of the export are included.  Normal value is usually defined as the price at which a good would be sold in its home market.)

2.         Before any action may be taken against dumped goods the Australian industry concerned must demonstrate not only that there is dumping occurring, but that the industry has suffered injury as a result.  This is done through an application to the Australian Customs Service (Customs) for an investigation into the facts of the case.  If Customs determine that dumping has occurred, it must then establish whether the Australian industry’s performance has deteriorated, whether any injury suffered would be considered material and whether the dumping has caused the material injury to the industry.  Any injury that has resulted from other, clearly identifiable sources must not be attributed to the dumping.  Even if it is found that dumping has not caused material injury, it must be determined whether future dumping threatens to cause material injury to the Australian industry.  This includes an assessment of whether any changes in circumstances would make that material injury both foreseeable and imminent unless anti-dumping measures were imposed.

3.         Under the provisions of the Customs Act 1901 (the Act) Customs has 155 days from the date of initiation of an investigation within which to make a recommendation to the Minister responsible for Customs (the Minister) concerning the imposition of interim anti-dumping duty.  On the basis of Customs’ recommendations the Minister will then make a decision whether to impose definitive measures.  Once details of the Minister’s decision have been published as required by the legislation, interested parties have up to 30 days to apply to the Trade Measures Review Officer (the Review Officer/TMRO) for a review.  Certain decisions by the CEO of Customs are also subject to TMRO review.  Applicants need to establish to the satisfaction of the Review Officer that, on the basis of the particulars contained in the application, there are reasonable grounds to warrant the reinvestigation of Customs’ finding(s) that formed the basis of the decision.

Reviews by the Trade Measures Review Officer

4.         Subdivision C of Division 9 of the Act provides for reviews by the Review Officer of certain decisions of the Minister, including decisions to take anti-dumping action under subsections 269TG(1) and 269TG(2) of the Act.  Subdivision C also describes the procedures to be followed in the conduct of a review.

5.         An applicant must establish to the satisfaction of the Review Officer that there are reasonable grounds to warrant the reinvestigation of the finding or findings specified in the application.  Section 269ZZG of the Act provides that the Review Officer must reject an application if satisfied that the applicant has failed to provide sufficient particulars in relation to the application, including particulars concerning the finding or findings to which the application relates, within the 30 day statutory period.  As well, the Review Officer must reject an application if the applicant claims that information included in it is confidential, or is information the publication of which would adversely affect a person’s business or commercial interests, and the applicant fails to give a summary of that information to the Review Officer.  The summary must contain sufficient detail to allow a reasonable understanding of the substance of the information without breaching the confidentiality or adversely affect the interests concerned.

6.         Before conducting a review, the Review Officer must publish in a national newspaper a notice indicating that the Review Officer proposes to conduct that review.  Interested parties in relation to a reviewable decision may make submissions to the Review Officer within 30 days after the publication of the public notice.

7.         If an application is not rejected, the Review Officer must make a report to the Minister on the application by recommending either that the Minister affirm the reviewable decision or that the Minister direct the CEO to reinvestigate a finding or findings which formed the basis of the reviewable decision, being the finding or findings specified in the application.  The Review Officer must take account only of the information that was before the CEO when the CEO made the findings and recommendations set out in Customs’ report to the Minister in relation to the making of the reviewable decision.

8.         The Review Officer’s report must be made at least 30 days after the public notification of the review but not more than 60 days after that notification, or such longer period allowed by the Minister in writing because of special circumstances.

Ministerial Decision

9.         If the Minister receives a recommendation from the Review Officer to affirm a reviewable decision, or the Minister does not accept a recommendation by the Review officer to require the CEO to reinvestigate a finding or findings which formed the basis of the reviewable decision, s.269ZZL of the Act requires that the Minister must, by public notice, affirm the reviewable decision.

10.       If the Minister accepts a recommendation by the Review Officer to require the CEO to reinvestigate a finding or findings, s.269ZZL prescribes that the Minister must, in writing, require the CEO to make further investigation of the finding or findings and report the result of that further investigation to the Minister within a specified period.  As well, by public notice, the Minister must indicate acceptance of the Review Officer’s recommendation, including particulars of the requirements made of the CEO.

11.       After receiving a report by the CEO in respect of a reinvestigation, the Minister must either affirm the reviewable decision or revoke that decision and substitute a new decision.  The Minister must give public notice of that decision.

 

TMRO Review

12.       By public notice in the Australian Financial Review on 17 February 2000, Customs notified that the Minister had accepted its recommendation that anti-dumping action be taken in respect of imports of certain hot dip galvanised (HDG), welded, circular hollow section (CHS), steel pipe in nominal sizes DN 15-100 exported to Australia from Thailand.

13.       The report of Customs’ investigation leading to this recommendation, the Australian Customs Service, Trade Measures Branch, Report No.11 Certain Galvanised Steel Pipe Exported from Thailand is at Attachment A.

Applications

14.       Three applicants subsequently sought a review in accordance with s269ZZA of the Act, of various findings of the Australian Customs Service which led the Minister to take anti-dumping action in this matter.  The applications have some common ground for seeking a review, in relation to material injury and causal link.

15.       On 17 March 2000 Roger Simpson of RDSimpson and Associates Pty Ltd, acting on behalf of First Steel Co Ltd (First Steel) a Thailand exporter of HDG CHS, lodged an application to review the decision of the Minister.  First Steel claims that Customs erred in its findings in relation to dumping and causal link, and proffers as grounds for review the following:

  • the Minister could not be satisfied that there was a causal link between the material injury experienced by the Australian industry and exports from Thailand at export prices less than the normal value;

  • the Minister could not be satisfied that it was appropriate to cumulate the effect of First Steel’s exports with the exports of the other two Thai exporters vide paragraph 269TAE(2)(c) of the Act; and

  • the Minister could not be satisfied that there may be future exports by First Steel at export prices which may be less than normal values.

16.      On 21 March 2000 the Australian Steel Association (ASA) on behalf of Pacific PipeCoLtd (Pacific Pipe) of Thailand and Thyssen Mannesmann TradingPtyLtd (an Australian importer) lodged an application to review the Minister’s decision to issue anti‑dumping notices in respect of Thailand.  Pacific Pipe claims that:

  • Customs failed to examine other causes of injury and therefore could not have been satisfied that dumped imports from Thailand were the demonstrable cause for material injury to the Australian industry;

  • Customs failed to project any currency trends beyond March 1999 and consequently could not have been satisfied that imports from Thailand would continue to be dumped and would threaten to cause material injury to the Australian industry; and

  • Customs erred by not allowing Pacific Pipe due allowance for a duty drawback and as a result the dumping margins for Pacific Pipe are factually wrong.

17.       On 21 March 2000 the Australian Steel Association (ASA) on behalf of SAHA Thai Steel Pipe Co Ltd (SAHA Thai) of Thailand and CMC(Australia) Pty Ltd (the importer) lodged an application to review the Minister’s decision to issue anti-dumping notices in respect of Thailand.  SAHA Thai claims that:

  • Customs’ ascertained export prices should have been either:

    • truly comparable with determined normal value for SAHA Thai; or

    • consistent with Customs’ treatment of invoice price as being Free Alongside Ship (FAS) or actual Free on Board (FOB) price;

  • Customs made a presumption without sufficient evidence that dumping will continue;

  • the Minister erred in law by not considering a price undertaking proposal offered by SAHA Thai;

  • Customs failed to have regard to other causes of material injury, including the trade restrictive practices of the Australian Industry;

  • Customs erred in its calculation of a non-injurious price; and

  • Customs should have used paragraph 269TAC(2)(c) for determining normal values and sections 269TAC(8) and(9) should have been applied.

18.       The claims of the three applicants are examined in detail in this report, and reasons given for the TMRO’s assessment in respect of their claims.  Unless otherwise specified the paragraph references in this report are to the Australian Customs Service, Trade Measures Branch, Report No.11 Certain Galvanised Steel Pipe Exported from Thailand, and references to Customs’ investigation are to the investigation leading to that report.

19.       The applications (confidential versions) are attached :

Attachment B    First Steel - Roger Simpson of DSimpson and Associates Pty Ltd, acting on behalf of First Steel Co Ltd

Attachment C    Pacific Pipe -Australian Steel Association (ASA) on behalf of PacificPipeCoLtd of Thailand and Thyssen Mannesmann TradingPtyLtd

Attachment D    SAHA Thai - Australian Steel Association (ASA) on behalf of SAHA Thai Steel Pipe Co Ltd of Thailand and CMC(Australia) Pty Ltd

20.       All applicants have provided non-confidential versions of their applications for the public record in accordance with the requirements of the legislation.

21.       Two submissions to the TMRO were received and considered in the course of this review.  There was no submission received from Australian industry.  The submissions are attached:

Attachment E    Australian Steel Association (ASA) on behalf of PacificPipeCoLtd of Thailand and SAHA Thai Steel Pipe Co Ltd of Thailand

Attachment F    Deputy Director-General, Department of Foreign Trade, Ministry of Commerce, Thailand.

FIRST STEEL Co Ltd

Future Exports

First Steel’s Submission

21.       First Steel claims that:

  • The Minister was not authorised to cause a ss269TG(2) dumping notice to be published in respect of exports of the goods concerned to Australia by First Steel, because she could not be satisfied that there may be future exports by it at export prices which may be less than normal values (ie dumped).

  • Report No. 11 was before the Minister between October 1999 and February 2000.  At this time the Minister could not have made a decision on the dumping status of First Steel’s export sales in May and September 1997, and could not have been satisfied that there may be future exports of the goods concerned from First Steel which may be at dumping prices as is explicitly required by ss269TG(2).  In the context of ss269TG(2) it is not sufficient that there is a theoretical possibility that there may be future exports at dumping prices, there must be a real likelihood of this occurring.

  • First Steel last sold the goods under consideration (GUC) to Australia in September 1997 and there is no evidence that sales may be resumed at any time in the future.  There is no indication that future sales to Australia will be made at all, so it is surely impossible for the Minister to be satisfied that there may be future exports to Australia at prices which may be dumped.

  • The principal effect of the Minister’s decision to publish dumping duty notices vide ss269TG(1) and(2) declaring that section of the Dumping Duty Act applies to the goods concerned is to cause anti-dumping duties to apply to future importation of these goods at dumping prices.  Because of their prospective nature, it is the normal practice of Customs to establish the quantum of such anti-dumping duties by reference to relevant facts in existence during the most recent period which can be practically examined by Customs prior to its report to the Minister.

  • In this case the dumping duties imposed on First Steel’s future exports have their basis in the weighted average of dumping margins assessed in respect of export sales by it in May and September 1997.  Having considered First Steel non-cooperative, Customs assessed dumping margins for it on the basis of the ‘best information available’, viz export prices vide paragraph269TAB(1)(a) using actual export prices of First Steel in sales in May and September 1997, and normal values in accordance with paragraph 269TAC(2)(c) of the Act using a hybrid of the costs of another Thai producer and the profits taken by First Steel in certain domestic sales in September 1997.

Review Officer’s Assessment

22.       The Review Officer accepts Customs’ assessment of First Steel in relation to export prices, normal value and dumping margins.  The Review Officer also accepts Customs’ finding that these imports caused injury to the Australian industry producing like goods.

23.       However, in relation to material injury and causal link (see assessment below), the Review Officer believes that not all the provisions of ss269TG(1) or(2) have been met, iewhere the amount of the export price of the goods is less than the amount of the normal value, and resultant material injury to an Australian industry has been or is being caused or threatened.  Therefore the Review Officer does not accept Customs’ recommendation that the Minister should publish dumping notices in respect of First Steel.

Causal Link

First Steel’s Submission

24.       First Steel claims that:

  • The Minister was not authorised to cause subsection269TG(1) and(2) notices to be published in respect of the goods concerned from Thailand because she could not be satisfied that there was a causal link between material injury experienced by the Australian Industry and exports from Thailand at prices less than normal value;

  • Customs’ investigation failed to demonstrate that either dumped imports from First Steel specifically, or dumped imports from Thailand generally have, of themselves, caused material injury to an Australian industry.  Consequently the Minister could not have been satisfied that the terms of subsection 269TG(1) and(2) were met before causing dumping duty notices to be published in accordance with these subsections.  In order to be satisfied that the terms of subsection 269TG(1) or(2) are met in respect of material injury and causation the Minister needs to give regard to section 269TAE.

  • In considering whether imposition of prospective anti-dumping measures is appropriate, regard is to be had for relevant factors in the most recent period which can be practically examined.  The most recent period examined by Customs in its injury analysis was the period from July 1998 to June 1999 (FY1998-99).

  • Para 6.2.3.2 of the Customs report noted that in FY1998-99 imports from Thailand declined significantly, being replaced by imports from Korea and Indonesia.  Customs found that the decline in imports from Thailand did not provide for any recovery by the Australian industry as the Australian industry lost sales and market share to imports from other sources during the FY1998-99.  Consequently there were factors other than the dumped imports which were injuring the Australian industry during FY1998-99, ieimports from other sources, and the injury caused by these factors has been incorrectly attributed to dumped imports from Thailand by Customs.

  • In paragraph 7.3.4 of its report, Customs suggests that the reduction in market share held by imports from Thailand in FY1998-99 is because of the initiation of the dumping investigation.  This cannot be as this investigation was initiated on 27 April 1999 and Customs’ investigation and injury periods were to 31 March 1999.  The decline in imports from Thailand and compensating increase in imports from other sources was due to factors other than this dumping investigation.

  • Customs’ investigation confirmed the Australian industry’s claim that injury has been most evident since late 1997.  This is clear from the narrative, graphs and tables in sections 6.2.2 and 6.2.4 of the report dealing with price volume, profit and profitability effects respectively.  During this period imports from Thailand were replaced by imports from other sources for reasons not related to the dumping investigation - probably for the reason of price advantage.

  • In its conclusions concerning causation (para 7.3.3) Customs reports that the deterioration in the Australian industry’s profitability is contemporaneous with the increase in dumped imports from Thailand.  The industry’s profitability decline continued during FY1998-99 when imports from Thailand were replaced by imports from other sources, presumably because of lower prices and certainly not because of the dumping investigation.

  • While the price of imports from Thailand may have undercut the Australian industry’s prices, that is not of itself an injury factor.  It must be demonstrated that such price undercutting has had of itself materially injurious volume, price and price effect - this has not been demonstrated by the Customs investigation.

First Steel’s Submission (continued)

  • The terms of subsection 269TAE(2A) are not met.  Although in section 7.4 of its report Customs claims to have met its obligations under subsection 269TAE(2C) of the Act to not attribute any injury caused by other factor imports from other sources to the exports from Thailand on the grounds that:

  • it made inquiries regarding imports from Korea but received limited cooperation; and

  • it was not able to draw any conclusion regarding the influence of other imports on the market price.

The report goes on to say that Customs “is unable to draw a conclusion as to whether those imports may have contributed to the injury suffered by the Australian industry” and that it “is satisfied that it has not attributed any injury caused by other factors to the goods exported from Thailand”.

25.       First Steel contends that should the findings of the TMRO’s review confirm Customs’ finding that dumped imports from Thailand generally have caused material injury to an Australian industry such as to cause publication of subsection 269TG(1) and(2) dumping duty notices, then their exports should be excluded from these notices because:

  • First Steel has not sold the goods concerned to Australia since September 1997;

  • following its last sale to Australia in September 1997, First Steel was replaced in the Australian market initially by other Thai suppliers and subsequently by suppliers from other countries;

  • material injury experienced by the Australian industry was found by Customs to be most evident since late October 1997 (December quarter); and

  • there is nothing to indicate any likelihood of sales by First Steel to Australia in the foreseeable future.

26.       First Steel claims that:

  • The Customs investigation found that material injury in the form of price depression, price suppression, loss of sales and market share, and reduced profits and profitability was experienced by the Australian industry from late 1997.  The last sale by First Steel of the goods concerned to Australia took place in September 1997, and the goods the subject of that sale had been pre-sold in the Australian market by First Steel’s Australian customer prior to that sale.  It was therefore not possible that First Steel’s exports of the goods concerned to Australia could have contributed to the material injury found to have been sustained by the Australian industry since late 1997.

  • The Customs investigation found that First Steel was replaced in the Australian market by other Thai suppliers following its last sale in September 1999, and it was during the period following the replacement of First Steel that material injury was found to have been experienced by the Australian industry.  That the export prices of the First Steel’s sale in September 1997 may have undercut the Australian industry at the time is not of itself an injury factor.  At paragraph 7.2.2 Customs stated “it is difficult if not impossible to establish when volume and price effects associated with individual sales actually had an impact on industry or in the market place”.

  • It is incumbent upon Customs to ascertain as a matter of fact whether the sales of the goods concerned to Australia by First Steel prior to the period during which material injury was established did have an injurious effect on the Australian industry, and this has not been ascertained.  It is not sufficient for Customs to suggest that there is a theoretical possibility that they did have an injurious effect.

Review Officer’s Assessment

27.       The Review Officer accepts Customs’ finding that the shipment by First Steel exported in October 1997 (subject of a May 1997 order confirmation) did undercut industry prices in 1997 when the order was placed.  The Review Officer agrees that it is difficult if not impossible to establish when volume and price effects associated with individual sales actually had an impact on industry or in the market place.  The Review Officer accepts Customs’ inclusion of both shipments by First Steel in its assessment of dumping margins, and Customs’ finding that these shipments undercut industry prices.

28.       The Review Officer accepts Customs’ finding in respect of dumping and material injury suffered by the Australian industry.  Customs found that the loss of market share can be attributed to the increase in the 1997-98 FY of imports from Thailand.  The Review Officer also accepts that imports from Thailand, including those of First Steel, were dumped and that these dumped imports had caused injury to the Australian industry.  The Review Officer notes that Customs’ evaluation of loss of market share indicates that, while imports from Thailand have declined significantly since the initiation of the investigation, there was no recovery by the Australian industry. 

29.       Customs also found that other sources have emerged as replacements for the Thai goods.  Report 11 ( 6.2.3) states that imports from Korea and Indonesia have replaced the volume lost by Thai imports.  In 1998-99 FY the total of other country imports was 15%, Thailand 7.1% and Australian industry 77.9%.

30.       The Review Officer accepts Customs’ finding that dumped imports from Thailand have caused injury to the Australian industry producing HDG-CHS steel pipe.  However, the Review Officer does not accept Customs’ finding that the material injury suffered by the Australian industry can be attributed solely to these dumped imports.

31.       Articles 3.5 and 3.6 of the WTO agreement on Anti-dumping state respectively:

It must be demonstrated that the dumped imports are, through the effects of dumping, as set forth in paragraph 2 and 4, causing material injury within the meaning of this Agreement.  The demonstration of causal relationship between the dumped imports and the injury to the domestic industry shall be based on an examination of all relevant evidence before the authorities.  The authorities shall also examine any known factors other than the dumped imports which at the same time are injuring the domestic industry, and the injuries caused by these other factors must not be attributed to the dumped imports.  Factors which may be relevant in this respect include, inter alia, the volume and prices of imports not sold at dumping prices, contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology and the export performance and productivity of the domestic industry.

The effect of the dumped imports shall be assessed in relation to the domestic production of the like product when available data permit the separate identification of that production on the basis of such criteria as the production process, producers’ sales and profits. If such separate identification of that production is not possible. the effects of the dumped imports shall be assessed by the examination of the production of the narrowest group or range of products, which includes the like product, for which the necessary information can be provided.

32.       Subsection 269TAE(2A) of the Act states:

In making a determination in relation to the exportation of goods to Australia for the purposes referred to in subsection (1) and (2), the Minister must consider whether any injury to an industry, or hindrance to the establishment of an industry, is being caused or threatened by a factor other than the exportation of those goods such as:

  1. the volume and prices of imported like goods that are not dumped; or

  2. the volume and prices of importations of like goods that are not subsidised; or

  3. contractions in demand or changes in patterns of consumption; or

  4. restrictive trade practices of, and competition between, foreign and Australian producers of like goods; or

  5. developments in technology; or

  6. the export performance and productivity of the Australian industry;

and any such injury or hindrance must not be attributed to the exportation of those goods.

33.       The Review Officer does not accept Customs’ assessment that, based on the available evidence, it is satisfied that it has not attributed any injury caused by other factors to the goods exported.  Customs was able to obtain FOB prices for Korea (see non-confidential version of Customs’ industry visit to Tubemakers of Australia, page 19).  Therefore the Review Officer is of the opinion that information regarding imports from other sources was available and should have been considered by Customs as part of its obligation under s269TAE(2A) of the Act.

34.       The Review Officer accepts that Customs did consider the information contained in both the PSA and ACCC reports as part of its current investigation.  The Review Officer notes that there is sufficient evidence that indicates there are factors other than the exportation of GUC from Thailand which have caused and may threaten to cause injury to the Australian industry.  The Review Officer notes that Customs’ finding that the Australian industry was still suffering injury after the replacement of Thai exports in the Australian market place is a significant factor, indicating that other causes of material injury may exist.

Cumulation

First Steel’s Submission

35.       First Steel claims that:

  • First Steel exports had no injurious effect which could be cumulated with the injurious effect of other Thai exporters as was done during Customs’ investigation.  Contrary to Customs’ finding, the Minister cannot be satisfied that it is appropriate to cumulate the effect of First Steel’s exports with the effects of other Thai exporters vide paragraph 269TAE(2C) because:

    • at no time was there competition in the Australian market between the exports of First Steel and those of the other Thai exporters; and

    • at no time was there competition between the Australian industry products and the exports of First Steel and the other Thai exporters.

Review Officer’s Assessment

36.       The Review Officer accepts Customs’ finding that it is appropriate to consider the cumulative effect of exports from Thailand.  Customs established that the GUC were like goods to those produced by the Australian industry, and that the exporters from Thailand compete directly with each other and with the locally produced goods.  The Review Officer also accepts Customs’ finding that while First Steel’s last shipment to Australia was prior to the commencement of exports by Pacific Steel and SAHA Thai, their goods were still substitutable for those of the other Thai exporters.

 

Pacific Pipe Co Ltd

Causation and Threat of Material Injury

Pacific Pipe’s Submission

37.       Pacific Pipe claims that:

  • Customs failed to examine other causes of material injury as required by section 269TAE(2A) of the Act and therefore could not have been satisfied that dumped imports from Thailand generally, or Pacific Pipe imports in particular, were the principal demonstrable cause of material injury to the Australian industry.  Customs failed to determine the causes for market decline, but instead attributed decline to Thai imports without supporting evidence.  Customs produced no evidence from the local industry on specific sales lost to Thai imports.  The reason for this absence of evidentiary data is the local industry’s restrictive trade practices of refusing to supply independent, non-franchised distributors.

  • Customs failed to evaluate what the Act demands in terms of informing the Minister of a possible cause for material injury - being restrictive trade practices between domestic  suppliers and domestic suppliers of foreign products.

  • Australia’s biggest importer of galvanised reinforced pipe was buying from Thailand at the same price being paid for the same goods from Korea, Indonesia and Malaysia.  The basis for a dumping notice on Thailand is flawed as Customs ignored this fact, and failed to properly advise the Minister of other demonstrable, factual causes of material injury.

  • Customs erred in not allowing Pacific Pipe due allowance for a drawback duty.  Consequently the dumping margin for Pacific Pipe as contained in the report is factually wrong, and the Minister could not have made a properly considered decision to issue a dumping notice under subsection 269TG(1) and(2) of the Act.

  • In assessing material injury Customs failed to turn its attention to those matters as demanded by the Act, namely: prevolume and prices of imported like goods that were not dumped; contractions in demand or changes in patterns of consumption; or restrictive trade practices of, and competition between, foreign and Australian producers of like goods; or developments in technology.

  • Recent technological advances in processes for producing galvanised pipe introduced by the local industry have affected demand for ‘traditional’ HDG.  Customs should have had regard to demand factors such as this.

  • Customs failed to allow for proper adjustment to domestic selling prices by way of a duty drawback as provided by subsection 269TAC(8).  Customs’ calculations of normal value and the consequent dumping margin for Pacific Pipe are factually incorrect because Customs failed to make the relevant adjustment in respect of duty paid on imported materials used in the production of goods exported to Australia.

  • Customs erred in not allowing Pacific Pipe due allowance for a drawback duty.  Consequently the dumping margin for Pacific Pipe as contained in the report is factually wrong, and the Minister could not have made a properly considered decision to issue a dumping notice under subsection 269TG(1) and(2) of the Act.

  • The basis for Pacific Pipe’s claim that Customs should have had regard to causes contributing to material injury other than that claimed to have been caused by Thai imports, is contained in a submission to Customs by DJPalmer, said to be ‘the largest user and supplier of imported galvanised pipe in Australia’.  In its submission of 9June 1999, DJPalmer claimed to have been denied supply by the two local manufacturers, leaving imports as its only source of supply.  This submission is included in the confidential attachment at AttachmentD.

  • Although Customs received evidence that the local producers refused to supply independent distributors such as DJPalmer, it failed to address this relevant causal factor as requested in previous submissions on this matter.

  • The local industry’s refusal to supply DJPalmer and other non-franchised distributors could never be a cause for material injury other than self inflicted injury, as the local industry has clearly foregone sales to the likes of DJPalmer of their own volition.

  • Customs erred in allowing the BHP rebates to be a consideration in terms of causes of material injury.  Domestic supplier rebates can have no relevance to material injury as their cause and effect are controlled by the domestic industry, as regards their size, method and duration.

  • Customs should have had regard to the Prices Surveillance Authority (PSA) report of October 1995 and subsequent Australian Competition and Consumer Commission (ACCC) report of 31December 1995.  The Minister should have been made aware of the contents of these reports relating to the industry’s problems prior to 1 July 1996.

  • Customs erred by not disclosing the existence and nature of rebates provided by the local industry such as those identified from its industry visits, including that these rebates were in existence prior to Thai imports.

Review Officer’s Assessment

38.       The Review Officer accepts Customs’ assessment in relation to the issue of an adjustment for a duty drawback for Pacific Pipe under ss269TAC(8) of the Act.  Customs found that there was evidence that showed that the like goods sold on the domestic market did not incur any duty, therefore no adjustment can be made.  The Review Officer accepts Customs’ decision to not allow Pacific Pipe’s claim for an adjustment for the drawback duty paid on imported materials.

39.       The Review Officer accepts Customs’ determination of dumping margins in respect of Pacific Pipe.  The Review Officer also accepts Customs’ finding that these imports have contributed to the injury suffered by Australian industry.

40.       The Review Officer accepts Customs’ finding in respect of dumping and material injury suffered by the Australian industry.  Customs found that the loss of market share can be attributed to the increase in the 1997-98 FY of imports from Thailand.  The Review Officer also accepts that imports from Thailand including those of First Steel were dumped and that these dumped imports had caused injury to the Australian industry.  The Review Officer notes Customs’ evaluation of loss of market share indicates that, while imports from Thailand have declined significantly since the initiation of the investigation, there was no recovery by the Australian industry. 

41.       Customs also found that other sources have emerged as replacements for the Thai goods.  Report 11 ( 6.2.3) states that imports from Korea and Indonesia have replaced the volume lost by Thai imports.  In 1998-99 FY the total of other country imports was 15%, Thailand 7.1% and Australian industry 77.9%.

42.       The Review Officer accepts Customs’ finding that dumped imports from Thailand have caused injury to the Australian industry producing HDG-CHS steel pipe.  However, the Review Officer does not accept Customs’ finding that the material injury suffered by the Australian industry can be attributed solely to these dumped imports.

43.       The Review Officer does not accept Customs’ assessment that, based on the available evidence, it is satisfied that it has not attributed any injury caused by other factors to the goods exported.  Customs was able to obtain FOB prices for Korea  (see non-confidential version of Customs’ industry visit to Tubemakers of Australia, page 19).  Therefore the Review Officer is of the opinion that information regarding imports from other sources was available and should have been considered as part of its obligation under s269TAE(2C) of the Act.

44.       The Review Officer accepts that Customs did consider the information contained in both the PSA and ACCC reports as part of its investigation.  The Review Officer notes that there is sufficient evidence that indicates there are other factors other than the exportation of GUC from Thailand which have caused and may threaten to cause injury to the Australian industry.  The Review Officer notes that Customs’ finding that the Australian industry was still suffering injury after the replacement of Thai exports in the Australian market place is a significant factor indicating that other causes of material injury may exist.

Currency Trends

Pacific Pipe’s Submission

45.       Pacific Pipe claims that:

  • Customs failed to project any currency trend beyond March 1999 and therefore could not have been satisfied that imports from Thailand generally, or Pacific Pipe imports in particular, would continue to be dumped and would threaten the Australian industry with material injury.

Review Officer’s Assessment

46.       The Review Officer does not accept that Customs failed to project any currency trends beyond March 1999 and therefore that it could not be satisfied that imports from Thailand generally, or Pacific Pipe imports in particular, would continue to be dumped.

 

SAHA Thai Steel Pipe Co Ltd

Dumping Margins

SAHA Thai’s Submission

47.       SAHA Thai claims that:

  • Under section 269TAB(1) Customs’ ascertained export prices should have been:

    • truly comparable with determined normal value for Saha Thai [s269TAC(8)(9) adjustments]; or

    • consistent with Customs finding on invoice price being FAS and Customs practice on composing actual FOB price; or

    • if no adjustments to comparable price level then CMC (Australia) Pty Ltd would need to be regarded as the exporter rather than the importer:

    • if because of an error on the export price the margin was wrong, the Minister could not have made a proper decision in relation to SAHA TAE s269TAE(1).

    • the size of any dumping margin is the critical consideration for determining dumping.

  • SAHA Thai, in its response to the Customs Statement of Essential Facts (SEF) requested Customs to determine the ascertained export price on the basis that the FAS invoiced price had to be increased by those charges payable by CMC (Australia) for having the GUC loaded on board the vessel for exportation to Australia.

  • Customs did not comply with the provisions of s269TAB(1), which should be the basis for ascertaining CMC’s export price and provides for adding all charges payable for the goods prior to their exportation.

  • Customs confirmed that SAHA Thai manufactured and exported the goods to Australia.  SAHA Thai sold the goods free-alongside-ship to CMC at the port of Bangkok.  CMC arranged for the goods to be loaded on board the ship.  In paragraph 5.2.3 of its SEF Customs recommends that export price be assessed under paragraph 269TAB(1)(a) of the Act, using the price paid by the importer plus the cost of loading the goods on board the vessel at the wharf, where this was not already included.

  • Customs erred in its presumption on continued dumping.  Had Customs correctly calculated its ascertained export prices for SAHA Thai exports, it would have been reasonable to conclude that dumping was not likely to continue. Customs could not have reasonably or properly determined dumping was likely to continue as it failed to carefully consider future currency fluctuations.

  • In paragraph 5.4.3 of its report Customs stated that “when margins are examined over the period in which SAHA exported, only heavy grade pipe was dumped and the margin was negligible as defined in ss269TDA(1) ieless than 2%”.  It can reasonably be concluded that SAHA Thai total exports to Australia were not dumped, particularly as the complainant industry stated that material injury commenced late in 1997, and Customs determined that SAHA Thai exports in the December 1997 quarter were not dumped.

  • SAHA Thai exports did not arrive in Australia until February 1998 and were not dumped.  The only possible dumped imports from SAHA Thai during the whole of financial year 1997-98 was 257 tonnes of grade extra-light.

Review Officer’s Assessment

48.       In its assessment of export prices, Customs was aware of changed circumstances in relation to CMC using a different shipping line for those shipments made after December 1998.  The costs, while stated on the invoices as FOB, included a loading charge from FAS to FOB in Bangkok.  While Customs were made aware of this claim while undertaking a importer visit with CMC in June 1999, no evidence was provided of the actual charges incurred at that time. 

49.       In October 1999, Customs received a fax from ASA with an attached invoice from CMC’s shipping line quoting the loading charges that applied to the March 1999 quarter.  At the time Customs raised a number of concerns relating to this information.  The information was unverified and its reliability was questioned, given the disparity between the charges claimed by CMC and other similar charges relating to shipment made in previous quarters.  Customs’ assessment of loading charges concluded that the maximum total charges for ex-mill to FOB from other shipping agents was considerably less per tonne than that claimed by CMC.

50.       The Review Officer does not dispute that an adjustment may have been required to the export price in the March quarter to reflect a true FOB.  However, given that at the time Customs were not able to verify the evidence provided, the Review Officer accepts that, under the circumstances, Customs did not err in its assessment of the export price.

51.       The Review Officer notes that while Customs was aware that the March 1999 quarter included loading charges in the FOB invoice in June 1999, no information was provided by the importer to Customs until October 1999.  The Review Officer also notes that this information was provided to Customs more than 30 days after the SEF was placed on the public file.  Section 269TEA(4) of the Act states that Customs is not obliged to have regard to any submission in response to an SEF after the 20 day period if to do so would prevent the timely preparation of the report to the Minister.

Dumping Margins (continued)

SAHA Thai’s Submission

52.       SAHA Thai claims that:

  • Customs made no provision or allowance for the imports that were not dumped, therefore when the local industry first claimed material injury, no causal link could be established with the SAHA Thai imports as they had not been dumped.

  • Were the export prices correctly composed, Customs actual dumping margin calculations would have been reduced for the March 1999 quarter.

  • Customs’ conclusion that SAHA Thai will continue to export the GUC to Australia at dumped prices is an invalid and unfounded presumption in that they should have had regard to the fact that the most recent imports from Thailand had a higher FAS selling price which, when added to the claimed, relevant and actual export charges indicate that the export prices were demonstrably not dumped.

Review Officer’s Assessment

53.       The Review Officer agrees with Customs’ assessment of export prices, normal values and dumping margins.  SAHA Thai states that, when the local industry first claimed material injury, its exports were not dumped.  However, the Review Officer agrees with Customs’ assessment that dumping margins over the period of investigation indicated a trend of export prices being less than normal values.  The Review Officer notes that Customs addressed the issue of earlier exports not being dumped due to the depreciation of the Baht during the 1997-98 FY.

Dumping Margins (continued)

SAHA Thai’s Submission

54.       SAHA Thai claims that:

  • Customs’ dumping margins for the December 1998 and March 1999 quarters increased for the following reasons:

    • Customs’ failure to calculate actual export prices;

    • market reality of meeting the price of the Korean non-dumped imports into the Australian market.

  • SAHA Thai’s exports to Australia were clearly not dumped and the most significant factor relating to the March 1999 quarter exports was the ‘reduction’ in the FAS invoiced selling price.  It is reasonable to assume that SAHA Thai’s exports had to be competitive with other country imports.

  • CMC (Australia)’s customers are in competition at the same level of sales as the complainants’, Tubemakers’ and Palmer Tube Mills’, own merchandising operations.  The Australian industry’s own merchandising outlets demonstrably dominate the relevant market in which CMC customers compete.  As Tubemakers and Palmer Tube use their demonstrated market power to deny supply to the CMC customers of any ‘competing’ locally produced pipe, there can be no injury from loss of sales.

  • CMC customers are totally reliant on the only alternative supply, ieimports.  It would be illogical to infer that SAHA Thai’s exports, given that they are practically all directed to the distributor level of the market, did not have to be price competitive with other imports.  Customs should have had regard to the need for SAHA Thai’s exports to remain price competitive in a single market, this being the cause for SAHA Thai’s increased dumping margins.

Review Officer’s Assessment

55.       The Review Officer accepts Customs determination of export prices, normal values and dumping margins for not only the March1999 quarter but over the whole of the investigation period.  See note above in relation to SAHA Thai’s claim for an adjustment relating to loading charges for the March 1999 quarter.

56.       The Review Officer does not accept SAHA Thai’s claim that dumping margins increased due to the need to remain competitive in a single market.  Dumping margins are determined by an assessment of export prices and normal values and this does not include an exporter’s need to remain price competitive.

Cumulation

SAHA Thai’s Submission

57.       SAHA Thai claims that:

  • SAHA Thai’s exports should not be cumulated with others from Thailand for the following reasons:

    • other imports were greater in volume than Thai imports, and Customs had this evidence;

    • SAHA Thai’s exports were essentially not dumped; and

    • they had requested that the Minister discuss an offer of future exports being non‑injurious.

  • Customs failed to provide the Minister with sufficient evidence for any proper, carefully considered view on the cumulative effect of other exports of like goods as provided for in paragraph 269TAE(2)(c) of the Act.

… any change or likely change, during a particular period, in the proportion that:

(i) the quantity of goods of that kind exported to Australia from the country of export and sold or consumed in Australia; or

(ii) the quantity of goods of that kind, or like goods, produced or manufactured in the third country and sold to Australia;

bears to the quantity of goods of that kind, or like goods, sold or consumed in Australia…

Review Officer’s Assessment

58.       The Review Officer accepts Customs’ finding that it is appropriate to consider the cumulative effect of exports from Thailand.  Customs established that the GUC were like goods to those produced by the Australian industry, and that the exporters from Thailand compete directly with each other and with the locally produced goods

Price Undertaking

SAHA Thai’s Submission

59.       SAHA Thai claims that:

  • Subsequent to Customs’ preliminary finding SAHA Thai proposed to the Minister the negotiation of a price undertaking within the meaning of ss269TG(6).  The Minister and Customs erred in law in that it was mandatory for them to consider the terms of any price undertaking offer, and they had six weeks in which to do so.

  • A meeting between Customs and the Royal Thai Embassy in Canberra on Thai exporters needing to offer price undertakings was not relayed to SAHA Thai’s commercial interests involved.  Customs was aware that SAHA Thai was represented by MJHoward and Customs should have advised either MJHoward or SAHA Thai of the need to offer a price undertaking.  SAHA Thai approached the Minister’s office regarding a price undertaking, albeit after Customs is now known to have sent its recommendations to the Minister, and after Customs’ meeting with the Royal Thai Embassy.  There was a reasonable expectation that Customs would consider the basis for a price undertaking.

  • Paragraph 269TG(3)(d) of the Act provides for the Minister to advise an exporter in writing that a price undertaking offer may be appropriate, and this would have been a reasonable expectation given Customs’ meeting with the Royal Thai Embassy.

  • Part I Article 8.3 of the WTO Agreement on Anti-dumping should have been observed by the Minister.  Under this Article the Minister should have advised SAHA Thai of the reasons which led her to consider acceptance of an undertaking as inappropriate, and to the extent possible, give SAHA Thai an opportunity to make comments thereon.  Part I Article 8.3 of the WTO Agreement provides

Undertakings offered need not be accepted if the authorities consider their acceptance impractical, for example, if the number of actual or potential exporters is too great, or for other reasons, including reasons of general policy.  Should the case arise and where practicable, the authorities shall provide to the exporter the reasons which have led them to consider acceptance of an undertaking as inappropriate, and shall, to the extent possible, give the exporter an opportunity to make comments thereon.

Review Officer’s Assessment

60.       The Review Officer does not accept that Customs erred in the process of providing SAHA Thai with the opportunity to offer an undertaking to Minister in respect of future exports of the GUC.  The Review Officer is not in a position to comment regarding any discussions that took place between Customs and representative of the Royal Thai Embassy, nor is it appropriate for the Review Officer to comment on whether the Minister’s office should have advised SAHA Thai of the reasons which led her to consider acceptance of an undertaking as inappropriate.

Material Injury and Other Causes

SAHA Thai’s Submission

61.       SAHA Thai claims that:

  • Customs failed to satisfy the requirement of Part I Article 3.7 of the WTO Agreement on Anti-dumping which states:

    A determination of a threat of material injury shall be based on facts and not merely on allegation, conjecture or remote possibility.  The change in circumstances which would create a situation in which the dumping would cause material injury must clearly foreseen and imminent.

Customs failed to satisfy that requirement as it had no projection, let alone any evidence of future trends and it has not provided the Minister with any definition of ‘foreseeable’ or’ imminent’.  Customs should also have projected the underlying trend forward in order to reach a conclusion on SAHA Thai’s future exports.  SAHA Thai also claim that it never had any business plan to export at dumped prices to Australia and its Australian market price is determined by prevailing market price of other countries exports.

  • Customs failed to pursue or determine causes of injury other than the GUC to the Australian industry.  Subsection 269TEA(2) of the Act requires Customs to extend its consideration to any like goods not covered by the application but imported into Australia during the period commencing on the date of initiation of the investigation and ending 20 days after the SEF.  Section 269T defines like goods as:

    Goods that are identical in all respects to the goods under consideration or that, although not alike in all respects to the goods under consideration, have characteristics closely resembling those of the goods under consideration.

SAHA Thai’s Submission (continued)

  • Customs should also have had regard to Article 2 paragraph 3,5 of the WTO Anti-dumping agreement which states:

    It must be demonstrated that the dumped imports are, through the effects of dumping, as set forth in paragraphs 2 and 4, causing injury within the meaning of this Agreement.

  • The demonstration of a causal relationship between the dumped imports and the injury to the domestic industry should be based on an examination of all relevant evidence before the authorities.  The authorities should also examine any known factors other than the dumped imports which at the same time are injuring the domestic industry, and the injuries caused by these factors must not be attributed to the dumped imports.  Factors which may be relevant in this respect include:

    • the volume and prices of imports not sold at dumped prices;

    • contraction in demand or changes in the patterns of consumption;

    • trade restrictive practices of and competition between the foreign and domestic producers; and

    • developments in technology and the export performance and productivity of domestic industry.

  • In terms of imports of like goods from Korea and other countries, the Minister is in breach of an obligation under the WTO Agreement on Anti-dumping to ensure that all imports are on an ‘equal footing’.

  • Customs states that it made inquiries regarding imports from Korea with relevant importers, but received limited cooperation, and concluded that “in the absence of sufficient reliable information on selling prices in the Australian market, Customs is not able to draw any conclusion regarding the influence Korean imports, or any other imports, may have on the market price”. (7.4)  The indicative volume of Korean and other country imports, (even allowing for unreliability of such data) should have been sufficient evidence for any reasonable person to conclude that those imports comprise the ‘lowest non-dumped source of supply’.

  • Published Australian Bureau of Statistics (ABS) import clearance data, based on Customs’ import clearances for tariff item of the GUC, is not reliable for the following reasons:

    • ABS had confidentiality ‘bans’ on imports of GUC from Korea in place from March 1998;

    • Korean imports cannot be isolated by ABS subscribers;

    • While it is generally accepted that most imports classified under Customs’ tariff item 73063000 are GUC, the item includes Non-Galvanised Steel Pipe, being goods not under consideration in this review.

  • The only reliable source of import data is the Customs based TRACE system and Customs can access all the relevant data if it chooses to do so.  SAHA Thai does not accept Customs’ claim that ‘it tried’ but was ‘unable’ to access all the information required for the reasons of unreliability.  Other sources of imports is the most critical issue for determining if only imports from Thailand caused the claimed material injury.  While claiming it was not entirely reliable, Customs used its database on relevant imports to determine its views for composing the following:

    • Australian market size;

    • lost sales and Australian Market Volumes

    • Australian market share and Australian import shares

  • Timing and the market share of imports from various countries are significant factors to be considered.  The local industry stated that material injury commenced late 1997.  Customs determined that SAHA Thai imports in December 1997 quarter were not dumped, and stated in its report (6.2.3) that “it is apparent that imports from Korea and Indonesia have replaced the volume lost by the Thai imports, however, Thai imports were still significant as a percentage of total imports in 1998-99”.  SAHA Thai argues that whilst Thai imports may have comprised 30% of imports for 1998-99, the relevant fact is that other imports comprised 70% - it provides figures from the ABS data to support this claim.

  • SAHA Thai’s imports should be accorded equal footing with those from Korea which are regarded as not dumped.

  • In section 6.3 of its report on Tubemakers resulting from Customs’ industry visits of May 1999 Customs noted that “Tubemakers are also aware of like goods from Korea.  Tubemakers are examining whether these goods are being exported at dumped prices”.  Given that there has been no action against Korean imports, it can only be concluded that Korean imports are not at dumped prices.

Review Officer’s Assessment

62.       The Review Officer accepts Customs’ assessment of export prices and normal values for SAHA Thai, and Customs’ determination of dumping margins for the period of investigation.  The Review Officer also accepts that SAHA Thai’s exports at dumped prices caused injury to the Australian industry producing like goods.

63.       The Review Officer does not accept that Customs could have been satisfied that it had not attributed any injury caused by other factors to the goods exported.  Customs was able to obtain FOB prices for Korea (see non-confidential version of Customs’ industry visit to Tubemakers of Australia, page 19).  Therefore the Review Officer is of the opinion that information regarding imports from other sources was available, and should have been considered as part of its obligation under s269TAE(2C) of the Act.

64.       The Review Officer accepts that Customs did consider the information contained in both the PSA and ACCC reports as part of its investigation.  The Review Officer notes that there is sufficient evidence that indicates there are factors other than the exportation of GUC from Thailand that have caused, and may threaten to cause, injury to the Australian industry.  The Review Officer notes that Customs’ finding that the Australian industry was still suffering injury after the replacement of Thai exports in the Australian market place is a significant factor, indicating that other causes of material injury may exist in the market place.

Material Injury and Other Causes (continued)

SAHA Thai’s Submission

65.       SAHA Thai claims that:

  • Customs must have regard to other causes such as the state of industry, contraction in demand, new technology developments and changes in patterns of consumption.

  • Customs’ Report on Tubemakers, ‘invoice price’ in relation to Tubemakers’ sales being primarily to its own merchandising company stated:

a) Tubemakers submit that they sell to Merchandising (own outlets) at similar prices and on the same terms as other distributors, because the market is highly competitive and well informed.’

b) The Australian Competition and Consumer Commission and the Prices Surveillance Authority have examined the relationship between Tubemakers and Merchandising.

These bodies have found the relationship to be armslength in terms of competition and pricing,

  • Customs should have had regard to the PSA Report No. 66 of 25 October 1995 and the ACCC Report of 31 December 1995 in terms of the following:

       Hot Rolled Strip (HRS) for the Pipe and Tube industry (ACCC Report 5.1.2.2)

    The demand for HRS is derived from the demand for Welded Steel pipe and Tube.  This, in turn is influenced by the availability of substitute products.  For example, Galvanised Steel Pipe has been replaced in many domestic and agricultural applications by other materials.

  • Tubemakers argued that inter material competition appears to be high in a number of end use markets.

Review Officer’s Assessment

66.       The Review Officer accepts that Customs did consider the information contained in both the PSA and ACCC reports as part of its investigation.  The Review Officer notes that there is sufficient evidence that indicates there are factors other than the exportation of GUC from Thailand that have caused, and may threaten to cause, injury to the Australian industry.  The Review Officer notes that Customs’ finding that the Australian industry was still suffering injury after the replacement of Thai exports in the Australian market place is a significant factor, indicating that other causes of material injury may exist in the market place.

Trade Restrictive Practices

SAHA Thai’s Submission

67.       SAHA Thai claims that:

  • Section 269TAE(2A)(d) states that the Minister must consider whether any injury to an industry is being caused or threatened by a factor other than the exportation of goods from Thailand such as “restrictive trade practices of, and competition between foreign and Australian producers of like goods”.

  • Report No 11 makes no mention of the DJPalmer factor (which this application outlines in the opening summary and in Section 4), and nor does the report contain any reference to domestic competition between Tubemakers and Palmer Tube/Merchandising and Steelmark.

  • Customs should have had regard to the DJPalmer evidence and allegations for reasons of determining if BHP, Tubemakers and Palmer Tube Mills created a self inflicted “injury” - by their use of added or end-user targeted rebates solely for the purpose of having Customs accept the anti-dumping complaint on the Thailand imports by DJPalmer.

  • Customs had an obligation to determine that the basis of the local industry’s complaint was not as a result of the industry possibly breaching relevant Australian legislation on market conduct.

  • Rebates paid by BHP, Tubemakers or Palmer Tube are no basis for claiming material injury.

Review Officer’s Assessment

68.       The Review Officer notes that there have been issues raised relating to trade restrictive practices in the Australian market.  It is not the role of an anti-dumping investigation to redress any issues to do with possible inconsistency with price discrimination legislation or policy.

69.       However, the Review Officer does not accept that Customs could have been satisfied under paragraph 269TAE(2A)(d) of the Act, in that it did not consider other contributing factors in the market such as trade restrictive practices when making its assessment of material injury.

Trade Restrictive Practices (Continued)

SAHA Thai’s Submission

70.       SAHA Thai claims that:

  • Customs’ recommendations to the Minister were flawed and have resulted in one country’s exports being excluded from the Australian market place, now dominated by the local producers, Korean imports and all other country imports.

  • Since the Thai imports demonstrably compete with the Korean and other imports in the Australian market the local industry’s obvious acceptance of these other imports being non-injurious suggests that their targeting of Thai imports only may be a concerted approach in terms of a strategic competitive pricing policy.

  • Report No 11 (Section 4.3.1) states, correctly, that Structure HDG CHS is sold in Australia through distributors.  It is critical therefore to “define” the level of sale and role of distributors as they sell over 90% of pipe in the Australian market.  Customs state that distributors on-sell to re-sellers or end-users and that there are two overlapping groups of distributors.

  • Distributors sell to final purchasers but the majority of these purchasers, in volume terms are users, not re-sellers, being at the distributor level of sale.  Based on industry experience, it is factually wrong for Customs to say that distributors sell to re-sellers.

  • Whilst the distributors do comprise two groups , the distinction between the two groups, apart from their sales volume, is:

  • the first group have access to both local and imported product.

  • the second group are denied access to locally produced product and as such are totally reliant on imported product for supply.

  • The two groups, however, do compete at the same level of sale, namely the distributor level of sale, and Customs’ treatment of the second group in Section 9 is factually wrong, making its non-injurious price basis totally invalid.

  • Customs correctly state that the largest two distributors are the two local producers own distributor outlets, and they do dominate sales, having a combined 60% - PSA Report No. 66. which provided the following relevant considerations on the industry, albeit it was not specifically on Galvanised Steel Pipe:

Steel Tubular Imports

SAHA Thai made a number of claims relating to Tables 4.4 and 4.5 of PSA Report No66 of 25 October 1995, in particular to data contributed by BHP and Tubemakers to the Table of Imports, and Custom’s failure to pursue issues raised in it.  (Refer AttachmentD for full details)

 

Imports and Market Size

SAHA Thai’s Submission (continued)

71.       SAHA Thai claims that:

  • Customs acknowledged that its market construction was unreliable (4.3.2.)  The market size and import supply as outlined in Sections 4.3.2, 6.2.3, are considered to be understated as the quantity of other country imports, based on ABS data, is considered to be higher than that applied by Customs for the years July ’97 to June ’99.

  • ABS Import Clearance data, although “Korean” imports have not been identified for reasons of confidentiality, demonstrates that other country imports may have totalled 18,000 Tonnes and not the lesser quantity Customs have determined.

  • SAHA Thai’s market constructions are based on “known” imports from the relevant Thai exporters during the period and ABS data.

Review Officer’s Assessment

72.       The Review Officer notes the above claim in relation to the PSA Report and ACCCReport.  However, under the provisions of the Act, the Review Officer must not have regard to any information  other than the information to which Customs had regard when making its findings.  This does not include reinvestigating the details of these reports.  The Review Officer accepts that Customs had regard to the reports in their investigation, and accepts Customs’ assessment thereof.

73.       The Review Officer accepts Customs’ assessment of the market for the GUC, and accepts that Customs’ market construction is reliable, having been based on available information.

Non-Injurious Price (NIP)

SAHA Thai’s Submission

74.       SAHA Thai claims that:

  • Section 269TACA defines the non-injurious price of goods exported to Australia as being only the minimum price necessary to prevent the injury, or a recurrence of the injury.

  • Section 269TAE(1)(d) to 269TAE(1)(9) requires Customs to have regard to the export price that is likely to be paid and the difference between the export price likely to be paid and the Australian domestic price.

  • SAHA Thai should have been given the opportunity of making its price undertaking offer and Customs should have had regard to the total price of the goods likely to have been paid to prevent any injury to the local industry as provided for in Section 269TG(5).  This would have precluded the issue of a Dumping Notice for SAHA Thai exports.

  • The methodology and arithmetic applied by Customs in determining a non-injurious price is basically flawed due to Customs not accepting the recognised levels of sale – Section 9.3.  Customs should also have had regard to price premiums the local industry claims are included in its selling prices in that Customs calculation of an USP should have allowed for the price premiums.

  • Customs also have the duty rate wrong.

Review Officer’s Assessment

75.       The Review Officer accepts Customs’ Non-Injurious Price calculation.  The Review Officer notes that Customs did apply the correct duty rate of 5%, and rejects SAHA Thai’s claim in relation to duty rate.

76.       The Review Officer notes that Customs may need to reassess its Non-injurious Price calculation as a result of the Review Officers’ non-acceptance of Customs’ material injury and causal link assessment (see above).

Normal Values

SAHA Thai’s Submission

77.       SAHA Thai claims that:

  • Customs normal value for SAHA Thai is incorrect and thus the dumping margins are also incorrect.

  • In its response to Customs’ SEF, SAHA Thai rejected Customs’ use of Section 269TAC(1) for normal value determinations as being inappropriate due to both the lack of domestic sales on certain “exports” and the low volume of sales on other “exports”.

  • Normal value should have been determined in accordance with Section 269TAC(2)(c) and Section 269TAC(8) and(9) should also apply.

  • Customs have not accepted this basis for normal values even though the sales data verified by Customs clearly support SAHA Thai’s claim.

  • Section 269TAC(8) also allows for adjustments to be made for differences in the level of sales by way of, domestic selling expenses; other export selling expenses; and provision for bad debts.  Customs has not made any adjustment for these “due allowances”.

  • Customs recommended that no adjustment be made for SAHA Thai’s use of imported zinc by way of a duty drawback.  Customs had evidence of SAHA Thai’s imported zinc prior to forwarding its recommendations to the Minister.

  • Customs’ claim that its recommendation was based on ‘existing information deficiencies’ is considered to be incorrect as Customs was provided with all necessary information for the use of due allowance/adjustment entitlement.

Review Officer’s Assessment

The Review Officer accepts Customs’ use of s269TAC(1) for its normal value determination for SAHA Thai, and also accepts Customs’ determination and assessment of due allowance adjustments made under ss269TAC(8) of the Act.  The Review Officer accepts Customs’ assessment of adjustments necessary to satisfy the provisions of ss269TAC(8).

In its ‘Normal Value Report’ for SAHA Thai, Customs addressed the issue of its  treatment of SAHA Thai’s use of imported zinc in its manufacturing process.  The Review Officer accepts Customs’ assessment and final treatment of zinc costs, and subsequent decision on the issue of a duty drawback adjustment.  Customs was unable to establish zinc consumption separately for domestic and imported production because SAHA Thai was unable to provide accurate information to determine the proportion of zinc usage for each market segment.