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  SUMMARY
  The Commission decided to impose provisional anti-dumping duties on
  Korean manufactured small colour televisions (SCTVs) imported into
  the Community as follows:
  a.   The three main producer/exporters
                Daewoo            .....  10,2%
                Goldstar          .....  12,3%
                Samsung           .....  13,0%
  b.   All other exporters    .....  19,6%
  This decision follows a detailed investigation which began in
  February 1988, after a complaint lodged on behalf of the most
  important Community manufacturers of this product.  The provisional
  findings established by the Commission demonstrate that the Korean
  companies have adopted marketing and pricing policies in clear
  violation of GATT provisions on dumping.
  The Commission finds that the injury caused by the dumped imports
  has been material - the Community industry lost important market
  shares and suffered an unsustainable pressure on prices a result.
  This damage threatens the present viability and future development
  of the whole Community television industry, and must also be seen in
  the context of related technologies throughout the consumer
  electronics sector, such as video cassette recorders (VCRs), which
  have figured in recent anti-dumping investigations by the
  Commission.
  PRODUCT
  The products covered by the Regulation are all SCTVs with an
  integral picture tube possessing a diagonal screen measurement of
  not more than 42 centimetres (or 16 inches).
                                                                 ./.
                              - 2 -
  PROCEDURE
  The Commission requested and received detailed information from all
  the exporters originally named in the complaint, from a majority of
  complainant producers, and from a number of importers.  However, one
  large exporter and many importers, known to be covered by the terms
  of the proceeding, failed to collaborate despite the Commission's
  invitation to do so.  Verification of data was carried out at the
  premises of three Korean producer/exporters, seven Community
  producers, and ten importers.
  DUMPING
  Dumping was determined, as it normally is in these proceedings, by
  comparing weighted average domestic prices in Korea with the export
  prices to the Community of equivalent models.  In all cases the
  prices used were based on those charged to independent customers,
  and the appropriate adjustments were made for directly related
  selling costs as required by the Community anti-dumping legislation.
  Where no equivalence could be found on the domestic market for a
  given export model, the representative domestic price or "normal
  value" was constructed by the Commission by adding a reasonable
  profit margin to the full costs of producing and selling that model.
  This procedure was also used to establish normal value for those
  models exported in considerable quantities to proprietary brand
  ("OEM") customers in the Community, since no equivalent channel of
  sale was found to exist on the Korean domestic market.
  Where exporters sold to the Community by way of related importers,
  the price between the related companies was disregarded and the
  export price was reconstructed as if the sale had been made to an
  independent importer.
  INJURY SUFFERED BY THE COMMUNITY INDUSTRY
  Unlike other consumer electronics products which have been the
  object of recent anti-dumping measures, such as VCRs and compact
  disc players (CDPs), colour television is not a new product; on the
  contrary it is at a mature point on its technology curve.
  Nevertheless the SCTV sector of the market is relatively fast
  growing - from 4 million units in 1984 to 6,4 million in 1987, a
  rise of 60%.
  Against this background Korean exports to the Community expanded
  from 23.000 units in 1984 to 781.000 in 1987, a 34-fold increase.
  Over the same period the Korean market share climbed from zero to
  12%, while the Community producers' share fell by 15% (to 46%).
  In addition to losing market share to the Korean exporters, the
  Community producers were found to have suffered considerable price
  depression, as well as price undercutting in 1987 ranging between 1%
  and 39% according to the national market and model concerned.
                                                                 ./.
                              - 3 -
  The Community producers also underwent losses in profitability, but
  these were limited by the radical rationalisation measures adopted
  by the industry.  Unfortunately these defensive measures, which
  included relocation of assembly outside the Community, also involved
  a loss of over 1 000 jobs in the industry in 1986/87.
  After carefully examining the above issues, and the effects of other
  factors on the health of the Community industry, which have not been
  negligible, the Commission in its Regulation concludes that dumped
  imports from Korea, taken in isolation, have caused material injury
  to that industry.
  COMMUNITY INTEREST
  In order to establish whether the general Community interest
  required that measures should not be applied, despite the combined
  presence of dumping and related material injury, the Commission had
  to weigh two main sets of interests:  those of producers and those
  of consumers.  After careful consideration it concludes that in this
  case the benefits of protective measures for the producers outweigh
  the possibility of very limited and short-term undesirable effects
  for the consumers.
  The Regulation points out that, in the absence of measures to
  counter the injury caused by dumped imports, the Community SCTV
  industry could disappear, with further substantial job losses.  This
  in turn, by seriously damaging the television industry's general
  marketing base, would weaken its potential further development even
  in the large screen sector, and this at a crucial time, given the
  current advance towards High Definition television technology.
  There would be knock on effects for the development and commercial
  exploitation of other new consumer electronics technologies, such as
  VCRs and laser video disk players, as well as for the general
  electronics components industry.
  The application of anti-dumping duties, even if only to a part of
  the SCTVs imported into the Community, clearly has price
  implications for the consumer.  The Commission considers however
  that the gravity for Community industry of the injury considerations
  outweighs the important consumer interests involved.  Indeed, in
  view of the large - and still increasing - number of sources for
  this product, both within and outside the Community, competition and
  consumer choice between the various suppliers is unlikely in
  practice to be materially reduced.  In addition the anti-dumping
  duties provisionally imposed, when translated into higher consumer
  prices for the Korean models, may modify but not eliminate their
  exporters' pricing advantages.
                                                                 ./.
                              - 4 -
  DUTIES
  In assessing the levels of duties to apply, the Commission compared
  the dumping margins with an injury threshold conservatively
  evaluated in terms of the large proportion by which Korean
  exporters' SCTV prices undercut those of comparable Community
  producers' models on the EC market.  Since the Community legislation
  limits duties in such cases to the lower of the dumping or the
  injury found, the measures imposed do not eliminate all the injury
  which was established in this way, but are intended to eliminate
  that injury which results from the dumping practices of the Korean
  exporters.
  A further noteworthy feature of the measures imposed concerns a
  conditional exoneration from application of the duties to SCTVs
  manufactured and exported by certain Hong Kong companies, in the
  event that Korean origin should be attributed to these products for
  customs purposes.  This exceptional provision reflects that fact
  that a supplementary investigation is now under way concerning SCTVs
  from Hong Kong and China, and that doubts have been raised
  concerning the status of some of these products under the
  Community's rules of origin.  In order to safeguard the interests of
  the Hong Kong exporters at present collaborating with the
  investigation taking place, the Commission has extended to them the
  benefit of this temporary special provision, until all the necessary
  information is available on which to base any measures which may be
  required.
       

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