2 April 1998: Ansac, the US soda ash joint venture export cooperative, announced recently it has learned that Brazil has decided to close an anti-dumping investigation concerning dense soda ash impor…
2 April 1998: Ansac, the US soda ash joint venture export cooperative, announced recently it has learned that Brazil has decided to close an anti-dumping investigation concerning dense soda ash imports from the United States. The decision was reportedly made on 16 March at a meeting of Brazil“s Commercial Defense Council, which voted to terminate the proceeding without any action being taken against US exports to Brazil. The investigation was started in September 1996 at the request of Brazilian soda ash producer Companhia Nacional de Alcalis (CNA), who alleged that dense soda ash had been sold to Brazil in 1995 at prices below normal value. CNA, widely reported to be in severe financial difficulty, claimed these sales had caused it material injury and sought protective duties on US exports in excess of 40%. After an ongoing investigation, the Brazilian anti-dumping authority, DECOM, issued a report indicating CNA“s claims against US exports could not be sustained. CNA later submitted a letter formally requesting that the investigation be closed. “We have maintained from the outset that US soda ash, while priced competitively to the consumer, was sold fairly, and that CNA“s financial problems were of its own making,” said Ansac President John M. Andrews. “The evidence submitted during the course of Brazil“s investigation conclusively demonstrated that CNA“s claims against us were without merit. We are gratified by the decision to drop the case, which means US product can continue to be exported to Brazil free of additional duty.” Brazil“s soda ash market has historically been dominated by the local producer. Throughout the 1980“s, CNA“s predecessor, a government-owned monopoly, held an exclusive import licence. In the early 1990s, high import duties were adopted allowing the local producer to continue to sell within Brazil at prices significantly above world market levels. According to evidence submitted by Ansac, because of this preferred position, CNA was able to operate one of the world“s most inefficient soda ash production facilities essentially at full capacity, while avoiding capital improvements which might have made it more competitive. As part of a 1992 privatization, the Brazilian government mandated a gradual decrease in soda ash duties. This decrease coincided with an overall downward trend in worldwide prices and CNA, although maintaining a 30-40% market share and continuing to sell out its total production each year, began to experience severe financial difficulties. After several unsuccessful attempts to secure restoration of protective duties, CNA filed a dumping complaint with the Brazilian authorities in 1996. “The soda ash investigation was Brazil“s most difficult and intricate inquiry into imports from the United States since adoption of WTO Uruguay round standards, and it presented many novel and complex issues,” said Charles H. Critchlow, a partner in the Coudert Brothers international firm which represented Ansac in the investigation, as well as Ansac“s six major US. producer members. “Beyond that, there was substantial concern that global economic pressures might lead to an outcome improperly distorted by political objectives. To their credit, the authorities instead conducted a competent, professional investigation which ultimately vindicated Ansac“s position.” The year and a half investigation, which was closed in mid-March, supposedly involved submission of thousands of items of data, as well as an unprecedented two-week verification of three US producers“ costs and sales. Since Ansac“s formation, US soda ash exports have more than tripled from one to over three million tonnes. Brazil, Ansac“s most significant market in South America, imports about 240,000 tonnes of product per year, with the balance being sold by CNA and various European conglomerates and state-owned producers. Although the anti-dumping case has been terminated against imports of dense soda ash, it continues against imports of light soda ash from Eastern Europe.