New measures proposed to tackle dumping of optical fibre cable

The Trade Remedies Authority (TRA) has today recommended putting a new trade remedy measure in place to protect the UK’s optical fibre cable industry from harm caused by low-priced imports from China.

Optical fibre cable is used in the delivery of broadband services to homes and businesses. The TRA has been investigating whether imports of these products are being dumped in the UK at prices below what they would sell for in their home country.

Around 5.7 million fibre kilometres of optical fibre cable was sold in the UK in 2021, including UK producer sales and imported goods and the UK market is expected to grow over the next five years. This rise is expected to be driven by network upgrades as demand for broadband increases as well as the Government’s investment in broadband infrastructure, such as Project Gigabit – a £5 billion programme to enable hard-to-reach communities to access faster broadband. The TRA has estimated that UK-produced optical fibre accounts for around half of all UK consumption, with the rest of the market supplied by imports from China, India, the US, Poland and Germany.

During its investigation, the TRA determined that there is already damage to the UK industry, having found clear evidence of price undercutting, indicating that UK businesses are struggling to compete with the dumped imports. The TRA therefore recommended that the Secretary of State for International Trade put in place a provisional measure on these imports while it completes its investigation.

TRA Chief Executive Oliver Griffiths said:

“Optical fibre cable provides higher speeds and bandwidth and as such plays an important role in meeting the UK’s internet needs. The interim measures the TRA has recommended will ensure UK producers are able to compete with imports and are able to continue supplying this vital growth industry.”

The TRA’s initial conclusions are published on its public file in a Statement of Essential Facts (SEF). Interested parties to the case can register to comment on the findings and submit any additional evidence. The TRA will then assess any additional information and submit its final recommendation to the Secretary of State for Business & Trade for a decision.

The investigation was carried out in response to an application from a UK manufacturer and information was gathered from interested parties to establish whether imports had been dumped in the UK at prices below their normal value and whether this was harming the UK industry. The TRA also carried out an Economic Interest Test (EIT) to assess if it would be in the UK’s economic interest to put in place a trade remedy measure in the form of a tariff at the border, to mitigate any injury from the imports.

Under the new provisional measure, importers will need to provide a guarantee (in the form of cash, bond or bank guarantee) to HM Revenue and Customs that shows they can pay the duty that they may ultimately be required to pay on imports of these goods. This will help make sure UK businesses that make similar goods don’t suffer further damage from these imports while the TRA completes its investigation.

The different rates that importers will have to pay are listed below, comparing the provisional rates with the rates recommended in the SEF.

Dumping Margins

Dumping Margin (Provisional Measure)

Dumping Margin (SEF)

SDG Group

31.5%

31.3%

Non-sampled exporters*

31.5%

31.3%

Residual rate**

47.2%

44.6%

• Non-sampled exporters are those that cooperated with the TRA’s investigation but were not part of the sample.

** The residual rate is the rate that all other non-cooperative overseas exporters will have to pay.

Separate investigation into subsidies on optical fibre cable imports

The TRA is also carrying out a separate investigation to determine whether the Chinese imports entering the UK market are also benefiting from subsidies which lower their production costs.  This investigation will report its initial conclusions soon and both cases are expected to conclude this summer, once the TRA’s final recommendations are submitted to the Secretary of State for Business & Trade.

Notes to Editors

• The Trade Remedies Authority is the UK body that investigates whether new trade remedy measures are needed to counter unfair import practices and unforeseen surges of imports.
• The TRA is an arm’s length body of the Department for Business & Trade.
• UK industries concerned about imports can submit applications to the TRA for a new trade remedy measure.

• This is the third new investigation that the TRA has opened and follows an investigation into potential dumping of Aluminium Extrusions that opened in June 2021 and a case involving ironing boards from Turkey which began in May 2022.

• Anti-dumping remedies address imported goods which are being dumped in the UK at prices below what they would be sold for in their home country.
• Countervailing remedies deal with imports which benefit from subsidies in their home country which lower their production costs. Not all government subsidies are countervailable (can be countered using trade remedies) – the TRA’s guidance on subsidy investigations explains this in detail.