WTO Panel rules in favour of Norway in salmon case

In a report made public today, a WTO dispute settlement panel ruled in favour of Norway, finding that the EU’s imposition of an anti-dumping measure on imports of Norwegian farmed salmon is in conflict with numerous WTO rules.

 

Fact box: Main findings in the Panel’s report  The basis on which the European Commission initiated the investigation was flawed, since the complaint did not have the support of the whole EU domestic industry. The EU should not have restricted the scope of the anti-dumping investigation solely to Scottish fish farmers. The EU should have also assessed the situation of fillet producers in other parts of the EU, given that both whole fish and fillets were included in the investigation.  The EU’s claim that its domestic industry had been injured was incorrect. The basis on which the EU selected Norwegian companies for investigation was flawed. There were a number of errors in the dumping calculations (e.g. of the costs), and this has a bearing on the dumping margins for the Norwegian companies. Norway’s claim that the EU’s calculations of minimum import  prices for Norwegian salmon were flawed is upheld. The EU failed to respect the due process rights of Norwegian interested parties in its investigation.

1. Background

In January 2006, the EU imposed an anti-dumping measure on Norwegian salmon in response to a complaint put forward by Scottish salmon farmers. The measure took the form of six minimum import prices for various Norwegian salmon products.  

This was the latest in a long series of EU measures imposed on Norwegian salmon in response to complaints by Scottish and Irish salmon farmers. Ever since 1989, the Norwegian salmon industry has been met with anti-dumping measures in the EU market, or with other restrictions on imports, the threat of such measures or investigations of the Norwegian industry with a view to imposing such measures. In January 2004, Scottish and Irish salmon farmers lodged a new complaint, which led to the implementation of safeguard measures later in 2004. These were subsequently replaced by the current anti-dumping measure. 

Following several attempts to settle the matter in spring 2006, Norway brought a case before the WTO, where a WTO panel (a kind of arbitral tribunal) was established in June 2006. The Panel completed its 337-page report on 10 August, but it was not made public until 16 November. 

2. The main points in the Panel’s report

The Panel has ruled in favour of Norway on 22 important points in this case, the largest number of violations in any case of this kind in the WTO.  

The anti-dumping measure imposed by the EU applied both to whole fish grown by fish farmers and to salmon fillets produced by the processing industry. Under WTO rules, the EU could only have introduced this measure if it had been shown that both whole Norwegian salmon and salmon fillets were being “dumped” on the EU market, and that such dumping had caused injury to producers of both whole fish and filleted products in the EU. However, the EU based the introduction of the anti-dumping measure solely on an analysis of the situation of five Scottish fish farming companies. In doing this, the EU failed to take into account the situation of its own processing industry and a number of other producers. The Panel criticises the mismatch between the broadly defined range of Norwegian products and the narrowly defined Scottish domestic industry, and finds that the very basis for initiating the anti-dumping investigation was flawed.   

The Panel also finds that a number of errors were made in calculating the “margins of dumping” for the Norwegian companies investigated. These calculations are of crucial importance for determining whether or not dumping has taken place. The Panel also finds that the EU has determined minimum import price levels incorrectly and has made several procedural errors in the course of the investigation.

The Panel concludes that the EU’s anti-dumping measure is not consistent with WTO rules. 

3.  Significance of the Panel’s report 

In Norway’s view, the EU’s only option is to withdraw the anti-dumping measure. Viewed as a whole, the Panel’s conclusions indicate that it rejects the basis for the anti-dumping investigation and the introduction of the anti-dumping measure against Norwegian salmon. The EU must now bring all 22 points into conformity with the rules or withdraw the anti-dumping measure. Several of the errors identified will make it necessary for the EU to obtain new information, to prepare new calculations and to submit new conclusions based on figures from the investigation undertaken in 2004–2005. In practice, this is impossible because the necessary factual basis was never obtained. The EU cannot remedy this by carrying out a new investigation today.   

Norway brought the matter before the WTO with two objectives in mind: to have the existing anti-dumping measure withdrawn, and to obtain clarification of various points that would make it more difficult for the EU to impose such measures against Norwegian salmon in the future. The Panel’s report provides a sound basis for achieving both of these objectives. 

4.  The further process 

The Panel’s report will be adopted by the WTO Dispute Settlement Body 60 days after publication, provided that neither of the parties lodges an appeal. If the ruling is appealed, the WTO Appellate Body has up to 90 days to issue its ruling on the appeal. 

The EU is obliged to remedy the many violations of WTO law that the Panel identified.  Once the report has been adopted, the EU has a specified period to implement the conclusions, i.e. to change or withdraw the anti-dumping measure. This period may range from one day to 15 months. Normally, it is somewhere between six and nine months.

Norway will request immediate withdrawal of the anti-dumping measure.

5. The report shows clearly that Norway has prevailed 

The EU has previously claimed that they have won the case, not Norway. The report clearly shows that this is not the case. The Panel has ruled in favour of Norway, finding that the anti-dumping measure is not consistent with WTO rules. The 22 points on which the Panel has upheld Norway’s claims cover all stages of the anti-dumping investigation, from initiation of the investigation to calculation of dumping margins for Norwegian companies and the anti-dumping measure itself.  

Norway was also interested in obtaining clarification of how future anti-dumping investigations must be carried out to be consistent with WTO rules. Although the Panel did not uphold all of Norway’s claims, it upheld many of them on numerous important points.   Norway had raised a further 15 points on which it did not receive the Panel’s support. This does not, however, affect the outcome of the case, because Norway did not need the Panel to uphold its views on these additional points to win the case. 

In Norway’s view, the anti-dumping measure infringes WTO rules in such a way that it cannot be maintained. Thus, Norway has prevailed.