Brazil launches new investigation into Chinese fiber dumping

Brazil launched an investigation aimed at assessing potential dumping of Chinese fiber optical cables and whether anti-dumping policies, such as surcharges, should be adopted.

The investigation is overseen by foreign trade department Secex, part of the industry and commerce ministry (MDIC). China was officially notified of the investigation on June 28, but the decision to launch it was only published in the official gazette on July 5.

Secex said “sufficient elements that indicate the practice of dumping in [fiber optics] exports from China to Brazil” were apparent and caused damage to the domestic industry.

Brazilian authorities saw “solid evidence” that Chinese public policies and government programs deem the fiber optics cable sector strategic and offer it special treatment.

They also claim the Chinese government helps its sector with financial and other subsidies.

Brazil said that China provides incentives for the development of raw materials for fiber optics production and that there is state interference in private companies operating in the sector.

As a result, said Secex, “the decisions of private entities do not seem to reflect purely market dynamics, but the guidelines contained in plans established by the government.”

CONTEXT

In October 2022, the companies Cablena, Furukawa Electric Latam and Prysmian filed a petition with MDIC for the launch of a two-folded investigation into Chinese dumping related to fiber cable exports to Brazil and the resulting damage to the domestic industry.

That investigation request, however, was rejected by the Brazilian government, which alleged problems with data presented by the petitioners. The merit of the case was not analyzed.

In January this year, Furukawa and Prysmian submitted a new request to the government and, in March, both filed additional information requested by the government.

The analysis of evidence of dumping considered the period from October 2022 to September 2023, while the analysis of damage to the national industry considered the period from October 2018 to September 2023.

According to the Brazilian government, the investigation will initially run for 70 days. Only if proof of dumping can be established after that period would any counter-measure be applied.