Chapter 5: Price Undertaking under Taiwan’s Anti-Dumping Law
5.1 Taiwan’s Anti-Dumping Proceedings
In the past thirty years, anti-dumping measures have become one of the most frequent used trade protect instruments by Taiwan’s domestic industries. The Implementation Regulations was enacted by the MOF on November 7th 1984, and was amended in 1994, 2001, 2005 and 2016 respectively.
The recent amendment of the Regulations was in February 2, 2016, including the definition of terms;
the deadline for the application submitted to Tariff Commission; the disposition and decision procedure of withdrawn, price undertakings, new shipper review etc., Until March 22 2016, 63 cases were initiated investigation and 17 cases were levied anti-dumping duties after investigation. Among which, 8 cases were taken price undertaking measures at the same time. China, with its growing trade volume and economic development, has recently become a target country for the implementation of anti-dumping measures. Figure 18 shows that China has become the first target country and accounts for 35% of countries which are being imposed definitive anti-dumping duties.
Figure 18. Target Countries of Imposing Definitive Anti-Dumping Duty, 1995- 2014
Source: WTO Statistics on anti-dumping measures
Australia China India Japan South
Korea Philippines Poland Russian Federation
Percentage 6% 35% 6% 12% 24% 6% 6% 6%
Number 1 6 1 2 4 1 1 1
0%
5%
10%
15%
20%
25%
30%
35%
40%
0 1 2 3 4 5 6 7
Taiwan's anti-dumping system imitates that of the U.S., thus there are two competent authorities involved in the investigation. The MOF is in charge of the dumping investigation and the International Trade Commission (ITC) of the Ministry of Economic Affairs (MOEA) is responsible for the injury investigation. An anti-dumping investigation begins with filing of a petition toward the MOF by a domestic industry producing a like product. The MOF will examine the petition within 40 days to decide whether the prima facie evidence of dumping and injury is legally sufficient. If yes, the MOF will submit the petition to the Tariff Commission to decide whether the investigation should be initiated, otherwise, the MOF will reject the application.
A petition must be filed on behalf of an industry, if (1) the domestic producers who support the petition account for at least 25 percent of the total production of the domestic like product, and (2) the domestic producers who support the petition account for more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for or opposition to the petition.144
Upon the initiation of the investigation by the MOF, the ITC must investigate within 40 days whether there is a reasonable indication that the domestic industry producing the like product has been suffered the material injury or a threat of material injury by the allegedly dumped imports. If the preliminary injury determination of ITC is affirmative, the MOF begins its dumping investigation, otherwise the investigation will terminate. In the case of the affirmative injury preliminary determination, the MOF will send the questionnaires to foreign producers or exporters and then calculate the dumping margins according to the information provided in the responding questionnaires. Subsequently, it will publish the result of calculation in a dumping preliminary determination.
144 Article 5.4 of Anti-Dumping Agreement
No matter the preliminary determination of dumping is affirmative or negative, the investigation will be continued. The MOF will submit the result of preliminary determination to the Tariff Commission.
If both preliminary determinations of dumping and injury are affirmative, the provisional anti-dumping duty will be imposed. After the preliminary determination of dumping, the MOF officers will conduct on-site verifications at the premises of foreign manufacturers in order to verify the accuracy of the information provided to MOF.
If the final determination of dumping for all exporters is negative or their dumping margins are all de minimis, the investigation will be terminated. Otherwise, the ITC must, within a prescribed statutory time, make a final determination of whether a domestic industry is suffering a material injury or a threat of material injury. If both of the final determinations of dumping and injury are affirmative, then the definitive anti-dumping duties will be imposed. The Maximum duration of anti-dumping duties is 5 years, unless a Sunset Review, covering both dumping and injury, is initiated before the expiry of the 5 years and it is determined that the expiry of the duty would be likely to lead to the continuation or recurrence of dumping and injury.145 With regard to Taiwan's Anti-Dumping procedures and the time frame of each phase please see Table 19.
Among 17 anti-dumping cases which are levied Ad valorem duties, 6 subject products are originating in China including towel, certain footwear, Benzoyl Peroxide, Sodium Formaldehyde Sulfoxylate, Portland cement and cold-rolled stainless steel. Except Sodium Formaldehyde Sulfoxylate, those subject products currently are being levied definitive anti-dumping duties.
Towel, certain footwear and cold-rolled stainless steel have also been taking the undertaking measures. The following part would briefly elaborate the investigation procedures of subject product on Chinese towel and certain footwear.
145 Judith Czako, Johann Human and Jorge Miranda (2003)- Anti -Dumping Investigations, Page 8.
(1) Towel products originating in China
On March 1, 2006, the anti-dumping investigation of the subject product on Chinese towel was initiated by ex officio of the MOF. In the final determination, the MOF announced that an anti-dumping duty of 204.1 percent would be imposed on Chinese towel imports, with a five-year validity starting from June 1, 2006. In addition, the MOF accepted the price undertakings offered by 6 exporters on September 19, 2006. The investigation of Sunset Review was initiated on March 21, 2011. The ITC and MOF made a determination that the revocation of the anti-dumping duty on Chinese towel products would be likely to lead to continuation or recurrence of dumping and injury to the domestic industry. Hence, the anti-dumping duty continued to be levied from December 20, 2011 to December 19, 2016 and price undertaking measures of 6 exporters has remained in force ever since.
(2) Certain footwear originating in China
The anti-dumping investigation of Chinese certain footwear was initiated on October 13, 2006.
The scope of subject product includes men's footwear, high heels, boots, children's shoes, sandals and casual footwear, but not includes sports shoes and slippers. The MOF announced on July 12, 2007 that it would levy an anti-dumping duty of 43.46 percent on footwear imported from China and retroactive to March 16, 2007 when the MOF started imposing provisional anti-dumping duties on the subject products. At the same time, the MOF has accepted price undertakings offered by 48 exporters. The investigation of Sunset Review was initiated on December 19, 2011. The determination of dumping and injury was affirmative, and thus the MOF announced on December 13, 2012 that an anti-dumping duty of 43.46% would be continuously imposed for another 5 years until December 12, 2017.
Furthermore, the MOF accepted the price undertaking offered by 82 exporters on April 17, 2013.
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Table 19. Flow Chart of Disposition Procedures for Anti-Dumping and Countervailing Cases
Source: Implementation Regulations