Proposal for duties on water purifiers likely to be shelved

Date: 04/04/1996

By Tim Jones

MEMBER states will break new ground next week if, as expected, they fail to reach agreement on Commission plans to impose definitive anti-dumping duties on Chinese water purifiers.

On 10 April, the working group of the Council of Ministers which negotiates anti-dumping measures will be asked to debate for the last time the vexed question of definitive duties on powdered activated carbon from China.

“Nobody is very optimistic about reaching an agreement,” said a diplomat. “A series of compromises are possible, but it will be difficult to find a majority for this proposal.”

Failure to reach agreement on 10 April will almost certainly mean that the proposal for definitive duties will be shelved. “Someone could refer it to Coreper, but this is unlikely,” said a diplomat. “You cannot continue like this for years.”

For several months, the Commission has been unable to win the support of member states to replace the 66.8&percent; provisional duties imposed on this purifying product used by the pharmaceutical, fine chemicals and food industries in August last year.

The log-jam in the group meant that when the provisional duties expired on 15 February, they were not replaced and importers were able to reclaim guarantees put up in anticipation of definitive duties.

This was the first time this had happened since the EU first adopted its new anti-dumping voting procedures in early 1994 following the settlement of the Uruguay Round of GATT trade liberalisation negotiations.

The writing had been on the wall for some time. The ending of qualified majority voting on imposing definitive duties and their replacement with the simple majority has strengthened the hand of the traditionally 'liberal' countries led by Germany and the UK.

Following complaints, the Commission began an investigation into alleged dumping between 1990 and 1993 of steam-activated carbon and chemically-activated carbon.

This found that while the chemically-activated product did appear to have been dumped, the steam-activated product did not.

Because the injury to EU industry was not as great as originally feared, the Commission proposed a reduction in the duty to 38.6&percent;, but only Belgium, Spain, France, Portugal and Greece supported this approach.

The UK, Germany and Sweden are opposed to the proposal, while the Netherlands leads a group including Finland, Luxembourg, Italy and Austria calling for changes to the recommendation.

It is these member states which the Commission has been attempting to win over. At a meeting of the working group last week, the Commission proposed a duty of a fixed money amount per tonne, rather than a percentage - one of the Dutch demands.

Since one of the complainant firms was the Dutch chemicals producer Norit, the Netherlands wants the duties on chemically-activated carbon to be tight and dissuasive, but also wants the steam-activated product exempted from duties.

The Commission has refused to do this, claiming it would be impossible for customs to differentiate between the products. But it could offer to shorten the effective period of the duties from five to three years to win over the waverers.