Cotton anti-dumping vote on a knife-edge

Date: 10/09/1998

By Peter Chapman

CONTROVERSIAL plans to slap punitive duties on low-priced imports of unbleached cotton hang in the balance in the run-up to a key vote next week.

With the pro and anti camps evenly balanced, the attitude of Belgium and Luxembourg - the only two member states yet to declare their hand - will be crucial.

A decision on the European Commission's politically charged proposals to impose anti-dumping duties on imported fabric from China, Egypt, India, Indonesia and Pakistan is due to be taken at a meeting of national trade officials next Wednesday (16 September).

Seven member states (Germany, the UK, Sweden, Finland, Denmark, Ireland and the Netherlands) have signalled their opposition to the duties while the remaining six, led by France and Italy, have declared their intention to vote in favour.

Since anti-dumping decisions are taken by a straightforward majority vote, the outcome hinges on which way Luxembourg and Belgium lean.

James Searle, a lawyer with Oppenheimer, Wolff and Donnelly and adviser to UK cotton importers Broome & Wellington and the Foreign Trade Association (FTA), said talks with Belgium had revealed the government had yet to make up its mind. Luxembourg, however, had made a decision but was unwilling to reveal it before the meeting, he said.

But in anticipation of the eagerly awaited Council of Ministers' decision, industry sources are warning of the consequences if dumping duties are approved.

Groups such as the FTA and the European Textile Finishers' Association (CRIET) argue that such duties add disproportionately to the costs of textile finishers who import the cloth. They insist that the levies would only have a marginal effect in protecting the European textile weaving sector, which claims to be damaged by cheap imports, while they would hurt finishers much more.

They also complain that the Commission has not followed correct procedures in its investigations nor in its final proposal in favour of duties. “The Commission has seemingly manipulated its findings to achieve a political result,” claimed Searle. He said this included a proposal for only a marginal duty on imported embroidery, to win the support of Austria for definitive duties. “That was totally contrary to its normal practice; it was a manipulation,” he insisted.

The Commission, which hotly denies these accusations, has also come under attack from diplomats and lobbyists for allegedly altering duties for “political reasons”, reducing some of the proposed levies to placate sceptical member states.

They claim, for example, that the Commission abandoned plans to increase duties against Turkey, even though investigators found evidence of dumping, because the EU is trying to rescue diplomatic relations with Ankara after excluding Turkey from the first wave of applicants for Union membership.