The European Council has adopted definitive anti-dumping measures in the form of a minimum import price of 2.80 EUR/kg whole fish equivalent for farmed salmon originating in Norway. These measures are a response to unfair pricing, and in particular selling under cost of production, and will guarantee that Norwegian Salmon is not exported to the EU at below its true value.
The minimum price means that European producers are no longer subject to unfair competition from Norwegian products imported below cost or at prices lower than those on the domestic Norwegian market. Market access for Norwegian salmon producers is preserved without adding additional costs for Norwegian producers and European importers. The Commission will further monitor the market in order to assure that the minimum price measures remain appropriate. This note provides some background on the issue
The Anti-dumping investigation
Norwegian companies have sold farmed salmon on the Community market at illegal dumped prices, putting in jeopardy the existence of viable small and medium-sized Community producers. The Council, with broad support from the Member States, on 17 January acknowledged the necessity to adopt antidumping measures in accordance with WTO rules.
Because the Commission's completed investigation confirmed the provisional finding of dumping, the provisional minimum import price set on 30 June 2005 has been converted by the European Council into definitive measures lasting five.
The minimum price has been adjusted according to definitive findings and is now set at 2.80 EUR per kilo of fresh salmon to reflect market production costs in Norway. The minimum price for fillets was also reassessed.
Unlike the imposition of a tariff, the setting of a minimum import price does not add additional costs for Norwegian exporters if they respect this price. It ensures in a simple and transparent manner that Norwegian producers do not sell products in the EU below the cost of production in Norway. The use of a minimum price also guarantees the European processing industry and consumers a stable and secure supply of fresh salmon at a fair price.
Current market prices at February 2006 are well above the minimum import price. All interested parties (EU producers, EU processors, Norwegian exporting producers) have been invited to participate in a market monitoring exercise which will be carried out by the Commission services in order to ensure that minimum import price continues to fulfil its function of providing stability on the market.
Background to the dispute
Farmed salmon imports to the EU have been a disputed issue for a number of years. Intermittent trade defence measures have been in place since 1996, particularly against Norwegian imports which constitute the largest part of EU imports with a market share of around 60%.
Norway decided in the early 1990s that, like oil, farmed fish is of strategic economic importance and this sector received considerable financial, organisational, political and research support from the Norwegian state. Farmed salmon imports from Norway are a matter for concern not only for the EU, but also for the US, which recently confirmed existing anti-dumping and anti-subsidy measures against farmed salmon originating in Norway.
The European salmon farming industry is mainly based in the UK and Ireland and provides much-needed employment in remote areas. In February 2004, the UK and Ireland requested the Commission to open a safeguard investigation because of the losses suffered by their salmon growing industries competing against Norwegian imports.
Following an investigation that determined that steeply rising volumes and falling prices for Salmon exports to the EU were causing serious injury to European producers, provisional safeguard measures were imposed by the Commission in August 2004, but lapsed on 6 December 2004, after they had been referred to the Council. On 4 February 2005, the Commission adopted definitive safeguard measures in the form of generous tariff quotas based on traditional trade flows for the major sources of imports: Norway, Chile and the Faroe Islands.
Community producers lodged an anti-dumping complaint against Norway in September 2004 and the investigation was opened on 23 October 2004. Provisional ad valorem duties were imposed on 27 April 2005 by Commission Regulation 628/2005 on the basis of findings that Norwegian exporters, with a 60% share of the EU market, were engaged in unfair trading causing clear injury to EU salmon farmers.
The Commission terminated safeguard measures when anti-dumping measures were adopted. Because Norway was by far the largest party to the safeguard measures and the provisional anti-dumping measures were expected to eliminate the unfair price element in Norwegian imports and were expected to slow the quantitative import increase originating in Norway, the Commission considered that anti-dumping measures were sufficient to address the injury suffered by the Community industry and that it was no longer necessary to maintain the safeguard measures.
After consultations with the Norwegian salmon farming industry the form of the anti-dumping measures was changed on 30 June 2005 by the Commission to a minimum import price and the duration of the provisional measures was extended until 22 January 2006. However, exporters rejected a similar agreement when the investigation reached definitive conclusions. Therefore, the Council decided on the 17 January 2006 with a very large majority to implement definitive anti-dumping measures in the form of a minimum import price of 2.80 euro per kg.
The Anti-Dumping Measures on Norwegian farmed salmon: questions and answers
What kind of measures have been adopted?
On Tuesday 17 January 2006, the Council adopted definitive anti-dumping measures consisting of a basic minimum import price of 2.80 euro/kg against farmed salmon originating in Norway. Specific minimum import prices for different salmon cuts have also been set (small fillets, large fillets etc).
The minimum import price, which is set to reflect market production costs in Norway, prevents unfairly dumped imports originating in Norway. Unlike the imposition of a tariff, the setting of a minimum import price does not add additional costs for Norwegian exporters if they respect this price. It ensures in a simple and transparent manner that Norwegian producers do not sell products in the EU below the cost of production in Norway.
The use of a minimum import price also guarantees the European processing industry a stable and secure supply of fresh salmon at a fair price, without any additional costs if the minimum import price is respected. The minimum import price imposed at definitive stage thus also accommodates the concerns of the Community processing industry.
Did the Commission investigation take sufficient account of the processing industry, which suffered as a result of the increase in price during the imposition of provisional ad valorem duties?
Yes. The Commission invited submissions from processors and their representative associations and took any comments received into account in reaching its definitive findings. The use of a minimum price rather than a duty ensures that now additional costs are passed onto European importers.
How was the minimum import price for fillets set?
The minimum import price for fillets were very precisely assessed on the basis of verified facts. The Commission adopted a differentiated system of minimum import prices taking into account the different cuts of salmon and their related costs (for example a whole fish per kg will cost less than a kg of filleted fish).
What happened to the provisional ad valorem duties?
Yes, provisional duties imposed by Commission Regulation (EC) No 628/2005 and applying during the period from 27 April 2005 to 4 July 2005, which took the form of ad valorem duties ranging between 6,8% and 24,5% have been removed.
How will circumvention of the measures be avoided?
To avoid circumvention of the minimum price it was necessary to introduce a double system of measures; a minimum import price and a fixed duty. To ensure the effective respect of the minimum import price, importers should be made aware that when it is found following a post-importation verification that goods have been sold at less than the minimum import price a fixed duty shall apply retrospectively for the relevant transactions.
Will the Commission services monitor the market in the future?
Yes. The Commission services will monitor the market through Eurostat, the Commission databases and information provided by national customs authorities to ensure that the minimum import price remains appropriate and will be open to review matters, should substantive new developments occur.
Is the Commission open for a future review of the measures?
Yes. If, on the basis of this monitoring, or other evidence presented, there is prima facie evidence that the existing measure is no longer necessary or sufficient to counteract injurious dumping, the Commission may consider initiating a review on the basis of Article 11(3) of the basic regulation.
How is it possible that Norway practices dumping at this level?
The answer to this question may be found in publications posted by Norway itself on its internet websites. It is clear that the Norwegian exporters were exporting to the Community at unfairly dumped prices. The export prices were not only below "normal value" but they were also in many cases below costs. This was confirmed by a survey published for the year 2002 and 2003 which indicates that more than half of Norwegian production was sold at huge losses. These losses are the main source of the dumping, even if, of course, losses are not a precondition for finding dumping.
How did the Commission establish the sample of Norwegian companies that were investigated?
A sample of ten representative producers was chosen after consulting with the Association of Norwegian Producers and Exporters. The latter agreed to the choice of eight of the ten producers. All together this sample represents about 40% of total Norwegian exports to the Community. All this is part of the Commission's normal practice in sampling cases and fully WTO compatible.