Market share requirement
How the TRA determines if the market share requirement is met before an investigation can be initiated.
Businesses wanting to understand trade remedies should read trade remedies: investigating dumped or subsidised goods for information on the investigations process and the actions they need to take.
This guidance uses shortened names when referring to legislation:
- ‘dumping and subsidisation regulations’ refers to the Trade Remedies (Dumping and Subsidisation) (EU Exit) Regulations 2019
- ‘safeguards regulations’ refers to the Trade Remedies (Increase in Imports Causing Serious Injury to UK Producers) (EU Exit) Regulations 2019
- ‘TCBT Act’ refers to the Taxation (Cross-border Trade) Act 2018
This legislation has been amended, including by:
- schedule 19 of the Finance (No.2) Act 2023
- the Trade Remedies (Increase in Imports Causing Serious Injury to UK Producers) (EU Exit) (Amendment) Regulations 2023
Paragraph 9(1)(d) of schedule 4 and paragraph 7(1)(c) of schedule 5 to TCBT Act provide that the market share requirement must be met, or waived, for the TRA to initiate an investigation.
The market share requirement is met where the UK industry in dumping and subsidisation investigations (as defined by paragraph 6 of schedule 4 to the TCBT Act) , or, in the case of safeguards investigations, “UK producers”,as defined by paragraph 3 of schedule 5 to the TCBT Act) have a share of the market for the like goods for consumption in the UK sufficient to justify initiating the investigation.
Regulation 51 of the dumping and subsidisation regulations and regulation 22 of the safeguards regulations set a market share threshold of 1 per cent, unless the TRA considers it appropriate to use a higher threshold (taking into account the goods and the particular market for those goods). Applicants requesting an investigation must provide sufficient evidence that the market share requirement is met though the TRA may waive this requirement.
To assess whether the market share requirement is met, the TRA should consider:
- d = sales of UK-based production for consumption in the UK
- t = total sales for consumption in the UK, consisting of d, plus imports
- x = 1%, unless the TRA considers that a higher threshold is appropriate
Consumption should be based on whether the first immediate buyer is based in the UK, regardless of where the final product may be consumed. It should include any captive sales. The definition used should be consistent with the rest of the investigation.
The market share requirement is met if:
d/t ≥ x
If the market share requirement is met and the TRA is satisfied that all other criteria have been met, then the TRA can initiate an investigation. If the market share requirement is not met then the application for an investigation should be rejected (unless the TRA has waived this requirement as set out below).
To assess the market share requirement, the market for the like goods must be defined. This requires a definition of the product scope of the dumped or subsidised imports, or the product in relation to which there are unforeseen surges in imports, the product scope of the like goods in the UK, and the product scope of competing third country imports. The definition used for the market share requirement should be consistent with that used elsewhere in the investigation.
A clear definition of what is meant by UK production is needed. The definition used for the market share requirement should be consistent with that used elsewhere in the investigation.
However, unlike in the assessment of standing under regulation 52(2) of the dumping and subsidisation regulations and regulation 23(2) of the safeguards regulations, only sales of like goods produced in the UK for consumption in the UK should be included in “d” above when assessing the market share requirement.
The assessment of the market share requirement should include all producers regardless of whether they are also importers, or are related to importers, even though such producers may be excluded from the standing assessment.
Unlike the assessment of standing, whether a given UK producer supports the application is not relevant to the market share assessment.
In assessing the market share requirement, the TRA will need to compare UK sales of domestically produced like goods with total UK sales, including both domestically produced and imported goods.
The TRA may make use of any data and evidence that it considers to be relevant, provided that it is satisfied of its accuracy and reliability.
It is at the discretion of the TRA to determine which data is the most accurate and reliable for the purpose of assessing the market share requirement.
The following sources are likely to be the most important:
Application
The applicant should provide evidence that the market share requirement is met which will be verified by the TRA. Closer scrutiny and verification of the data provided in the application will be required in borderline cases.
Publicly available sources
Publicly available sources such as HMRC trade data should be used where possible to verify imported product volume. However, this will not always be feasible as the product scope may not match with tariff codes used by HMRC. Reputable independent industry publications may also be consulted.
The assessment should normally be made based on sales volume as this allows for a more consistent comparison where there is a narrow range of goods under consideration and/or where prices may differ substantially.
The appropriate units of volume for the assessment should be decided on a case-by-case basis, normally using the standard industry units (e.g.using tonnes for steel products).
Data on sales value should also be considered and, if making the assessment using this data would lead to a different determination, the TRA should consider the possible reasons for this and which would be more appropriate to use.
It may be more appropriate to use value data to make the assessment in some situations. For example if the product scope is relatively wide and includes products that vary by weight or size. Whether the TRA elects to assess market share based on sales volume or value, it will need to set out its rationale for doing so in the decision to accept or reject an application.
The period for assessment should normally be the most recent three years for which data is available, although this may be assessed on a case-by-case basis. This will reduce the risk of making the assessment based on an unusual or outlying year’s data, as might happen if only one year’s data were used.
In some circumstances, it may be appropriate to look at different periods, for example, if domestic production only started in the last year, or the market has changed substantially within the last three years. Where the TRA varies from the three-year norm, it will need to set out its rationale for doing so in the decision.
The TRA has the discretion to waive the market share requirement and initiate an investigation. The circumstances where this might be applied include:
- material retardation cases where the development of UK production is being prevented as a result of dumped or subsidised imports
- cases where the market share of UK production is only below the threshold as a result of the increase in market share of the allegedly dumped or subsidised imports, or the unforeseen surges in imports
- cases where there are clear plans for UK production for the UK market to expand, and therefore increase its share of the market
- other cases that the TRA deems appropriate
In all cases where the TRA waives the market share requirement, it will need to set out its rationale for doing so in its decision to initiate an investigation.
The TRA may decide that an application should not be regarded as having met the market share requirement despite UK production having a market share greater than 1%.
The circumstances where this might occur include:
- where the imports that would be subject to measures hold a particularly high market share, as compared to third country imports, meaning that the impact on the market of applying measures will be greater
- where the market share of UK production is in long term decline that is expected to continue, for reasons other than dumped or subsidised imports, or unforeseen surges in imports, for example, due to technological developments, meaning that a measure may be ineffective in removing injury to the UK industry
- other cases that the TRA deems appropriate
In all cases where the TRA applies a higher market share threshold, it will need to set out its rationale for doing so.