Select Committee on European Communities Eleventh Report



Letter from Lord Tordoff, Chairman of the Committee, to Lord Clinton-Davis, Minister for Trade, Department for Trade and Industry

  At a meeting on Wednesday of last week, Sub-Committee D of the European Communities Committee considered the above proposals.

  Your explanatory memoranda state that duties are to be imposed on those Norwegian salmon exporters who have not offered satisfactory undertakings. The Sub-Committee would be grateful to know how the levels of those duties were arrived at, and what Her Majesty's Government's opinion about them is, in particular whether they are sufficient to achieve the desired objective. The Sub-Committee is concerned that the unfair damage to Scottish farmers is ended without unduly affecting the single market. In the meantime, the scrutiny reserve is maintained.

  At a later date, the Sub-Committee would be grateful for a report on the effect of these regulations.

10 November 1997

Letter from Lord Clinton-Davis, Minister for Trade, Department of Trade and Industry to Lord Tordoff, Chairman of the Committee

  Thank you for your letter of 10 November about Explanatory Memoranda 10392/97 and 10420/97 on proposals for definitive anti-dumping and countervailing duties on farmed Atlantic salmon originating in Norway, following separate, but parallel anti-dumping and anti-subsidy investigations by the European Commission.

  You ask how the levels of duties to be applied to Norwegian exporters who have not offered undertakings were arrived at. In the case of the anti-dumping duties, the European Commission calculated the margin at which a sample of six Norwegian exporters were dumping in the normal way, by comparing the normal value" (the prices of their own domestic sales) with the prices of their exports in the Community. They then calculated the level of injury being caused by that dumping. The duty rates were then set taking into account the so-called lesser duty rule", ie at the dumping margin or the injury level, whichever was lower; thus, the duties were set at the dumping margins for three of the sampled exporters and at the injury level for the other three. The level of the anti-dumping duty for exporters outside the sample was similarly established by calculating the weighted average of the lower of the dumping margins and the injury levels on a company-by-company basis.

  In the case of the countervailing duties, the Commission found in their anti-subsidy investigation that five publicly funded schemes in Norway conferred countervailable subsidies on Norwegian salmon producers. The total amount of the subsidies was calculated by the Commission, on an ad valorem basis, at 3.8 per cent, and the countervailing duty was set at that level.

  It is important to bear in mind that this solution to the problems of dumping and subsidisation, ie price undertakings underpinned by these duties, was a notable achievement by the Commission. This is because there was considerable opposition by other member states to the Commission's original proposal simply to impose a range of anti-dumping and countervailing duties. A number of member states were uneasy about the notion of such formal measures being imposed on a fellow member of the European Economic Area. Against this background, although we have some misgivings about some of the arrangements, eg the level at which the MIP was eventually agreed, the undertakings represented the only solution which was likely to command the support of member states.

  The key to the effectiveness of the undertakings will of course be rigorous monitoring of them, and my officials and their colleagues in the Scottish Office will be keeping this under review. As part of the ongoing monitoring arrangements, the Commission will be holding regular review meetings with the Scottish Office and industry. The first such meeting took place last month. I am pleased to tell you, moreover, that the Commission have invested a good deal of resources in setting up a dedicated task force to deal with this issue: I believe this is a very reassuring indication of their commitment to making the solution work.

  I have noted the Sub-Committee's request on the effect of these Regulations, and propose to produce one before the 1998 summer recess.

26 November 1997

Letter from Lord Tordoff, Chairman of the Committee, to Lord Clinton-Davis, Minister for Trade, Department of Trade and Industry

  Thank you for your helpful reply to my letter of 10 November. This Wednesday, Sub-Committee D reconsidered the above documents in the light of the additional information which your letter supplied and lifted the scrutiny reserve.

11 December 1997

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