Brittan insists EU trade protection regime is fair

Date: 17/07/1997

By Mark Turner

AS CONTROVERSY flares once more over the EU's anti-dumping regime, Trade Commissioner Sir Leon Brittan plans to tell his colleagues next week that there is no cause for concern.

In an internal report to be discussed at next week's meeting of the full Commission, he will insist that the Union's trade protection mechanism is fair, efficient and is used far more effectively than similar tools in the US and Canada.

But this is likely to raise eyebrows among critics who have lambasted the Commission for its controversial decision last week to launch a fresh inquiry into foreign cotton dumping.

Commission officials said last week that industry data from 1996 and the first half of 1997 potentially contained enough new information to justify extra duties on unbleached cotton from China, Egypt, Turkey, Indonesia, India and Pakistan.

The decision followed a third complaint lodged at the end of May by cotton producers' lobby Eurocoton that foreign imports were artificially cheap, undermined European producers and, on balance, damaged EU interests.

The move infuriated traders and consumers, who had fought previous complaints on the grounds that European producers were inefficient and uncompetitive, and consumers should be able to benefit from cheap imports.

European trade lobby EuroCommerce also criticised the use of 'chain complaints' by EU industries, in which data were slightly modified and used to renew demands for anti-dumping duties which had previously been rejected.

Although the Commission now has 15 months to investigate the complaint, insiders say that it could decide to impose provisional duties for six months in the autumn.

A decision in favour of Eurocoton would re-ignite the bitter political dispute of earlier this year in which a majority of national governments refused to extend provisional duties of between 13 and 23&percent; - imposed by the Commission in 1996 - on cotton imports worth about 550 million ecu a year. The issue split EU member states down the middle until Germany came down on the side of free-traders at the last minute.

The imposition of duties would also spark a storm of protest from third countries which felt the matter was closed in May. Trade bodies warn that this time the countries under attack might try to open dispute proceedings in the World Trade Organisation.

The Brittan paper will, however, avoid a substantive debate on anti-dumping reform, which is under discussion between member states and the Commision.