Chirac loses fight over duties but war goes on

Date: 22/05/1997

By Mark Turner

FRANCE's failure to secure anti-dumping duties on unbleached cotton has escalated into a full-blown battle over the future of EU trade policy.

The dispute follows a highly controversial decision by nine member states to oppose European Commission proposals to stem the flow of grey cotton - a basic component of textiles and clothing - from China, India, Egypt, Indonesia, Turkey and Pakistan.

The Commission had called for five years of duties of up to 36&percent; on imports of the product worth around 550 million ecu, reflecting concerns among European cotton producers that cheap imports were threatening jobs in France, Spain and Portugal.

But northern EU member states opposed the move, arguing that the duties were costing jobs in their textile industries by pushing up the price of raw materials.

EU ambassadors confirmed yesterday (21 May) that the decision not to apply the proposed duties was now final and rejected French calls to open discussions again.

But although he has lost the battle, French President Jacques Chirac is determined to continue the war.

He is now calling for a change in voting procedures on anti-dumping mechanisms, arguing that the simple majority which is needed under existing rules to approve or block duties does not reflect the weight and influence of large EU member states.

Chirac's calls for reform have attracted support from countries such as Spain which fear the effects of untrammelled and unreciprocated market access for cheap foreign exports.

But trade experts are dismissing the French demands as a rather obvious political gambit ahead of the country's first round of parliamentary elections this Sunday (25 May).

They have also expressed surprise at any proposals which would make anti-dumping measures easier to use.

Advocates of liberal reform say a special meeting earlier this month demonstrated almost complete agreement that anti-dumping rules should be weighted more in favour of free trade, increasing flexibility for foreign suppliers.

This, they continue, reflects a growing acceptance within the Union that trade protection can actually do more harm than good to EU industry, damaging large importing industries for the benefit of small production interests.

But Chirac is also railing against countries which consistently oppose anti-dumping measures as a matter of principle, rather than on a case-by-case basis - the main culprit being the UK.

British diplomats retort that the UK has accepted Commission anti-dumping recommendations on a number of occasions during the past year, and that they could always provide ample evidence to support their position when they opposed them.

“As a rule, the anti-dumping mechanism is a very bad trade instrument,” added one British official.

Cynics, nevertheless, point out that in the run-up to the recent UK elections, the British government gave strong support to restrictions on Norwegian salmon designed to protect Scottish producers.