Commission stays firm on cotton duties

Date: 30/07/1998

By Mark Turner

THE European Commission has hit back at claims by EU textile importers that its call for definitive duties averaging 12&percent; on grey cotton from five developing countries could cost hundreds of jobs.

“If you look at a shirt, the cost of raw cotton is about 3&percent;,” said a spokesman for Trade Commissioner Sir Leon Brittan. “We have brought duties down to 12&percent; and, in some cases where companies cooperated with our investigation, to 4&percent;. That means that the cost of these measures is way under one half of a percent of a finished product. That will hardly destroy the industry.”

The full Commission this week supported proposals from the EU's anti-dumping committee to impose permanent duties (for a minimum of five years) on imports from China, Egypt, India, Indonesia and Pakistan, ranging from 10.9&percent; for China to 18.5&percent; for Egypt. The proposal reduced the current temporary duties by 3&percent; and excluded Turkish imports, which were not found to have caused injury.

The Commission added that it would try to reach a 'gentleman's agreement' with foreign companies over the summer, persuading them to raise their prices in return for a reprieve from the duties. “That means they would receive the revenue, rather than the EU taxpayer,” said Brittan's spokesman.

But European textile importers, finishers and dyers have strongly attacked the measures, and are calling on national governments to reject them after the summer break.

“I have letters from companies which are already having to lay off people thanks to the provisional duties,” said UK Socialist MEP Arlene McCarthy, Foreign exporters have also criticised the move. Indonesian textile association API's secretary-general Irwandi Muslim this week insisted that the EU should “withdraw the dumping accusation and remove the provisional duties”.