The appellate body of the World Trade Organization (WTO) has decided in Russia’s favor regarding the country’s almost seven-year dispute with the European Union (E.U.) over the antidumping measures in place on imports of Russian ammonium nitrate (AN) into the E.U.
The WTO Panel found the cost adjustment methodology regarding prices for energy inputs used by the E.U. and some WTO member countries, which is used to establish antidumping duties on Russian AN, was unlawful, according to the decision published on the trade organization’s website on July 24. The current application of antidumping measures by the E.U. was also recognized as unlawful.
Based on the panel’s decision, the Russian Fertilizer Producers Association (RFPA) is demanding an end to an end of antidumping investigations by the E.U., and the immediate removal of antidumping duties on Russian AN.
Russia filed its complaint back in 2013. Antidumping duties have been in place on imports of Russian AN into the E.U. for more than 20 years.
The European Commission (E.C.) last implemented revised antidumping duties on Russian AN imports in November 2019 following a partial review of the prevailing anti-dumping measures in place (GM Nov. 16, 2018). The partial review was limited in scope to the examination of injury, and the E.C. concluded that there was likelihood of recurrence of injury should the prevailing antidumping measures be removed.
Following the partial review, the antidumping duties in place were amended from the previous level of €28.88 to €47.07/mt, depending on the product type and Russian producer, to €28.78 to €32.71/mt, depending on the product type. These amended rates remain in place today. The E.C. currently is conducting an expiry review of the measures, with a disclosure decision whether to continue with the measures due in September.
Brussels-based Fertilizers Europe, in a statement issued on July 31 on behalf of the E.U. AN industry, said it “readily acknowledges the WTO Panel’s approval of the legitimacy of the E.U.’s Basic Antidumping regulation and in particular the clauses therein relevant to ‘cost adjustments.’”
It added that the E.U. AN industry, having undergone a 15-month sunset review intensive E.C. investigation, is not surprised at all that the WTO Panel finds the E.C. conduct of the investigation to be correct and professional.
“However, the AN industry finds it regrettable that the WTO Panel disapproved of the E.C.’s use, ‘as applied,’ of the gas cost adjustment, but is encouraged that the Panel is very clear that ‘out of country’ data, information and benchmarks can be used and worked by investigating authorities,” Fertilizers Europe said.
“This WTO Panel – consistent with earlier WTO cost adjustment cases on bio-diesel Argentina and AN Ukraine – has judged that the E.U. did not take adequate or sufficient account of the (gas) costs of production /market situation in the country of origin (Russia),” the industry organization said.
“In a very real calculation way, the E.C. and the E.U. industry did make considerable efforts with regard to finding a ‘market economy’ gas cost factor for AN antidumping investigations. In fact, the Russian export gas price to Germany is taken as the best true market benchmark and net backed to Russian AN plants. The WTO Panel seems to implicitly be suggesting that more justifications or internal benchmarks need to be appraised,” said Fertilizers Europe.
Fertilizers Europe pointed out that the Russian government, Gazprom, independent gas suppliers, and fertilizer manufacturers all recognize and regularly publicly report on the dominant role of the state’s regulated artificially low gas prices regulating Gazprom’s gas sales in the Russian domestic market.
Fertilizers Europe said it is therefore “economically unjust” that the WTO Panel judgement “allows this type of distorting state intervention” to go uncorrected, and it is calling upon the E.U. and the WTO to re-appraise this judgement and to take further detailed consideration of the E.C.’s past appraisals and calculations of the “gas adjustment” as bona fide and correct.