EC plans lower import duty

September 20: After receiving a setback to its move to impose five-year penal duties on Indian exports of unbleached cotton, the European...

September 20: After receiving a setback to its move to impose five-year penal duties on Indian exports of unbleached cotton, the European Commission EC the European Union8217;s executive body is expected to make new proposals to EU members that may include lower duty rates.

Last week, the EU8217;s Anti-Dumping Advisory Committee voted by eight member states to six against such duties Belgium abstained. The final vote by EU trade ministers on whether or not these duties are to be imposed will take place before October 9.

In one of the most blatantly protectionist actions by developed countries, the EU has conducted successive anti-dumping investigations into India and some other countries8217; unbleached cotton exports in spite of earlier investigations finding no cause for action.

The drama has been in progress since February 1996 when the first investigation was launched. In November that year provisional anti-dumping duties were imposed though opposed by the EU8217;s Anti-Dumping Advisory Committee.

Lastsummer, EU trade ministers8217; rejected converting these provisional duties into definitive, five-year duties. Investigations were reopened a third time after lobbying by French President Jacques Chirac. In last year8217;s French parliamentary elections he had promised to create jobs in France8217;s textiles industry and was trying to block off textiles exports of competitive countries.

In March this year the Commission again imposed provisional duties. Last week, on September 16, its proposal to convert these into definitive five-year duties was voted against by the Anti-Dumping Advisory Committee. The EU trade ministers8217; vote before October 9 will now decide whether definitive duties are to be imposed.

This explosive case has set off anxiety about 8220;chain8221; 8212; consecutive 8212; EU investigations on the basis of frivolous complaints. It has generated demands for a rule that a certain minimum period must elapse before a second anti-dumping investigation may be launched in the same case.

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India complained in August tothe World Trade Organisation WTO against the EU8217;s repeated investigations in this case. If the final vote goes in India8217;s favour, the dispute would end as it refers to a specific case.

The developing countries in question are also believed to have told the EU that they would not agree to sell these exports above a certain minimum price because they are not indulging in dumping.

India8217;s stakes are high because it is the largest exporter of unbleached cotton fabrics, the raw material for all kinds of textiles, to the EU. In 1995 it exported 40,000 tonnes or about 200 million worth to the EU.