Anti-dumping ‘sea change’ as carbon duties are lifted

Date: 15/02/1996

By Tim Jones

IMPORTERS of a Chinese water-purifier will be entitled to have anti-dumping duties reimbursed by customs from now on thanks to a seemingly unresolvable dispute between the European Commission and member states.

In what could turn out to be a landmark case, the Commission has been unable to win the backing of member states to impose definitive duties on powdered activated carbon from China despite weeks of talks.

As a result, 66.8&percent; provisional duties imposed in August last year automatically lapse today (15 February) and importers can reclaim duties or guarantees put up in anticipation of definitive duties.

This is the first time this has happened since early in 1994, when the Council of Ministers altered its ratification procedures for adopting definitive duties from a qualified majority to a simple majority system. “We could be seeing the beginning of a sea change,” said a diplomat closely involved in the dispute.

With the arrival of Austria, Finland and Sweden in the EU, the camp of trade 'liberals' has grown by three.

Several recent decisions, including the imposition of definitive duties on imported microwave ovens, have been taken by eight votes to seven.

“This makes you wonder whether it was a wise decision,” said one official. “Many of us felt the complainants had other reasons for their poor performance than dumping. They need to be more innovative and respond to market developments.”

When deadlock finally came, it was not over microwaves or bicycles, but powdered activated carbon - a purifying product used by the food, pharmaceutical and fine chemical industries.

Provisional duties were imposed following complaints from French company CECA and Dutch firm Norit, and the Commission began an investigation into allegations of dumping by the Chinese between 1990 and 1993. The problem with the evidence was that it related to two types of the same product - steam-activated carbon and chemically-activated carbon.

The figures showed that while the chemically-activated product did appear to have been dumped, there was no evidence that steam-activated carbon had been sold at injurious prices.

In the Council working group on anti-dumping, Commission representatives pointed out that 1994 figures on the steam-activated product were more clear-cut. But a working group member complained: “How can we base our conclusions on a different period from that which is being investigated?”

Only five member states - Belgium, Spain, France, Portugal and Greece - agreed with the Commission. The UK, Germany and Sweden were opposed, while the Netherlands, supported by Finland, Luxembourg, Austria and Italy, took the lead in proposing that the Commission come up with a formula to distinguish between the two products.

Unable to win a simple majority for its proposal to impose definitive duties - albeit reduced to 38.6&percent; in recognition that the level of dumping and damage was not as great as originally thought - the Commission looked into the Dutch proposal.

However, officials concluded it would be impossible for customs officers to detect differences between the two types and, in any case, they were often interchangeable in their uses.

The Dutch complained that this had been achieved in the recent case of chamottes, a clay product used in the building industry.

With the 15 February deadline approaching, no compromise could be reached, causing one diplomat to say with horror: “It's just conceivable that powdered activated carbon could be discussed by foreign ministers.”

As the provisional duties expired, diplomats were left nonplussed as to what would happen next. “Nobody knows,” says one. “This is the strangest case I have ever come across.”