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Anti-dumping legislation | SKF - A Global Story

Anti-dumping legislation

The short-term strategy was to encourage the Japanese manufacturers to raise their prices. In these efforts, skf was aided both by other European companies and by the European Commission’s regulations against dumping. Dumping occurs when identical products are sold at lower prices on foreign markets than on the domestic market or that a product is sold at a price lower than the production cost.5 The price is supposed to be as high in the country where it is made as in the countries that import it. There has been legislation to prevent dumping and enable ‘fair’ competition since the beginning of the twentieth century. After World War II, gatt was set up in 1947 to encourage free trade, and international anti-dumping legislation was also adopted. This legislation was reviewed and amended in 1967, 1979 and 1994. The key elements include stipulations regarding definition of dumping, regulations determining what injury has been suffered by the domestic industry, and what anti-dumping procedures can be implemented.6

Japanese competition affected all bearings manufacturers in Europe and the us. American bearings manufacturer Timken accused Japanese manufacturers of dumping their taper roller bearings on the us market, and in 1974 Timken won a precedential anti-dumping case. Two years later, this resulted in anti-dumping duties being imposed on taper roller bearings.7 In Europe, European bearings manufacturers accused the Japanese bearings manufacturers of dumping. skf representatives participated as observers during the hearings held by the European Commission. The decision of the Commission was to impose an extra tariff of 20 per cent on top of the 9 per cent regularly levied on certain ball and taper roller bearings manufactured by the Japanese companies nsk and ntn. Ten per cent supplementary tariffs would be levied on exports of bearings manufactured by other Japanese companies, such as Koyo and Nacchi. However, this tariff barrier was a temporary measure, and the Japanese bearings manufacturers also appealed the decision to the European Court of Justice in Luxembourg. If extra tariffs were to be of a more long-term nature, they would have to be implemented after a decision of the Council of Ministers.8

The problem complex associated with dumping triggered the need for a common front amongst the European bearings manufacturers, because the European Commission refused to accept dumping notification from individual companies: it had to be filed by a national branch organization. For this reason, the bearing associations in the common market area decided to set up a joint organization – the Federation of European Bearing Manufacturers’ Association (febma) – to liaise with the Commission in relevant matters. skf was offered membership in the Federation on the condition that a Swedish Bearing Manufacturers’ Association was also established. A ball bearings division of the Swedish Association for Metal Transforming, Mechanical and Electromechanical Engineering Industries (Svenska Mekanförbundet) was set up, and became a febma affiliate. Thus an industry association was established with one single member, skf, in order to be able to join febma.9 The organization included companies such as Steyr, skf, snr, fag and Timken. Cooperation among bearing producers was sometimes difficult from the point of view of antitrust legislation, but febma was not considered a problem. Indirectly, it was the Commission that had taken the initiative to its establishment, and the legal experts stated that the risk of antitrust problems arising was negligible.10

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Anti-dumping legislation | SKF - A Global Story
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