European Union has no plans to amend cotton dumping proposal

European Union has no plans to amend cotton dumping proposal

BRUSSELS (Reuters): The European Commission has no plans to
amend its proposal for dumping duties on unbleached cotton
imports, despite opposition from a majority of European Union
governments, a Commission spokesman said on Friday.

The Commission, the EU's executive body, called in July for
five-year anti-dumping duties averaging 12 percent on imports of
unbleached cotton fabrics from China, Egypt, India, Indonesia and
Pakistan.

The Commission said producers in the countries had undercut
the prices of EU-based weavers, harming the European industry.

The Commission's proposal needs to win support from a majority
of the 15 EU member governments to take effect.

But, at a working-group meeting of trade officials this week,
eight countries said they would vote against the proposal for
duties, indicating it is heading for defeat unless one or more
governments changes its mind in the next few weeks.

Mainly northern-European countries with big cotton-finishing
businesses are wary of having to pay more for their raw
materials.

Commission spokesman Nigel Gardner said the case was now in
the hands of EU governments, collectively called the Council of
Ministers, which has until October 9 to reach a final decision.

"As is always the case, the Commission can adapt a proposal
before the Council if it helps. But we have no intention of doing
that at the moment," Gardner told reporters.

"The ball is in the Council's court," he said.

He said the Commission was not abandoning its idea of offering
to allow exporters in the five targeted countries to charge
certain minimum prices instead of paying the duties.

Other EU sources said the position could always change, but at
the moment, it seemed unlikely the Commission's proposal could
win the required majority support.

The dumping proposal is expected to be discussed next by EU
ambassadors before a final decision is taken by foreign
ministers, probably at a Luxembourg meeting on October 5 and 6.

At this week's working group meeting, six countries, including
France and Italy, backed duties while eight countries, including
Britain and Germany, were opposed. Belgium abstained.

It is not the first time the cotton dumping issue has caused
divisions in the EU. Last year, the Commission failed to win
governments' support for five-year dumping duties on grey cloth
from the same five countries plus Turkey.

Despite this setback, the Commission in April imposed
provisional, six-month anti-dumping duties on imports of
unbleached cotton fabrics from China, Egypt, India, Indonesia,
Pakistan and Turkey. Three months later, it asked EU governments
to approve definitive, five-year duties on five of the countries
but exempted Turkey.

The Commission can impose provisional anti-dumping duties at
its own discretion but needs EU governments' go-ahead for
definitive duties.

The controversial case has set northern EU states against
southern ones and European weavers, who complain of unfair
competition, against textile finishers opposed to duties on their
raw materials. Developing countries involved have reacted angrily
to the Commission's proposal for duties.

Unbleached cotton fabric is a raw material for the textile
finishing industry, which transforms it into bleached, dyed and
printed fabrics used to make clothes and home furnishings.

Exports from the five countries targeted for duties account
for about 40 percent of the EU market with a value of 415 million
ecu ($473 million), the Commission says.