On November 19, 2024, the Secretariat for Foreign Trade (SECEX)[1] published Ordinance n. 64, which granted Terphane’s request to terminate the on-going sunset review of the anti-dumping duty on Brazilian imports of PET film.
This request represents an important first step following the execution of a Concentration Control Agreement (ACC), on October 16, between the Administrative Council for Economic Defense (CADE) and the Oben Group as a condition for approving Oben’s acquisition of Terphane.
Based on a study conducted by CADE’s Department of Economic Studies (DEE-CADE) and responses to requests for information from companies operating in the sector, Reporting Commissioner Victor Fernandes concluded that the maintenance of anti-dumping measures on imports of PET film would constitute a significant barrier to imports into Brazil.
According to the Commissioner, those measures would hinder the entry of new competitors, increase the cost to importers of BOPET sourced from the producing regions and reduce the competitiveness of imports in the domestic market.
In light of these considerations, the parties negotiated the ACC that foresee the following undertakings regarding anti-dumping measures[2]:
- To request the immediate termination of anti-dumping duties on imports of BOPET from Peru, Bahrain, the United Arab Emirates and Mexico;
- To not request the reinstatement of suspended anti-dumping duties on imports of BOPET from China, or the renewal of anti-dumping duties on imports from China, India, and Egypt;
- To not request the initiation of new investigations for the imposition of anti-dumping duties on imports of BOPET from India, Egypt, Peru, Bahrain, the United Arab Emirates, China and Mexico, for a period of five years.
The ACC also stipulated that the merged company may not require exclusivity from distributors operating in Brazil, or make use mechanisms that could lead to tariff or non-tariff alterations that would increase the cost of imports of BOPET. Existing countervailing measures were not addressed or limited by the ACC.
As highlighted in the decision, this outcome reflects an important institutional dialogue between CADE and the Trade Defense Department of the Secretariat for Foreign Trade (DECOM/SECEX/MDIC) which aims at promoting effective competition in the Brazilian BOPET film market and address the competition concerns identified.
[1] https://www.in.gov.br/web/dou/-/circular-n-64-de-18-de-novembro-de-2024-596563079
[2]https://sei.cade.gov.br/sei/modulos/pesquisa/md_pesq_documento_consulta_externa.php?HJ7F4wnIPj2Y8B7Bj80h1lskjh7ohC8yMfhLoDBLddZsvmjZILDQspDmgL9xEemz0O_q0-emljCBhE2YV9cwoZvaRGYPRD-sjXLwiCairnp1PQ7lSbsrIvxE1xVhRikr
