PSF producers ask govt's help in facing antidumping charges

JAKARTA (JP): Indonesian synthetic polyester staple fibers (PSF) producers has called on the government to help them to counter antidumping duties imposed by the European Commission.

The Indonesian Synthetic Fiber Makers Association (APSyFI) secretary-general, Risa Merdekawati, said on Saturday the association would file a complaint with the World Trade Organization (WTO) against the antidumping charges as soon as the government expressed its commitment to back them.

"The accusation of dumping and material injury claimed by EU members is totally baseless. They're just doing it to protect their own market," she told The Jakarta Post.

She said APSyFI would meet with officials from the Ministry of Industry and Trade on Monday to find out whether the government would agree to facilitate government-to-government negotiations with the commission on the matter.

The government had pledged earlier its commitment to APSyFI to facilitate such talks with the Turkish government over a similar antidumping issue, she said.

"In the Turkey case, our team is scheduled to leave for Turkey in September to hold negotiations. We really hope the government will also support us with the EU case, too," she said.

EU member states confirmed early last week their imposition of definitive antidumping duties on imports of PSF from Indonesia as well as from Australia and Thailand.

The European Commission (EC) has imposed antidumping duties of up to 15.8 percent on Indonesian PSF. The commission also imposed antidumping duties of 12 percent and 27.7 percent on Australian and Thai products respectively.

The EC started antidumping proceedings against Indonesia, Australia and Thailand on April 22, 1999, based on a petition by the International Rayon and Synthetic Fibers Committee. The petition was filed against exporters of PSF used for spinning purposes.

The Turkish government has, since March, imposed antidumping duties of between 6.2 percent and 37.4 percent on all Indonesia's PSF products, she said.

Risa said the definitive duties imposed by the European Union on Indonesia's PSF producers varied from 8.4 percent applied on PT Indorama Synthetics, 14 percent on PT Tifico, PT GT Petrochem Industries and PT Sulindafin, to 14.8 percent on PT Panasia Indosyntec.

Another four companies, PT Tri Rempoa, PT Indonesia Toray Synthetic, PT Polysindo and PT Kumafiber, are inflicted not only with antidumping duties of 15.8 percent, but also antisubsidy duties of 10 percent, she said.

Risa said Indonesia's producers were not involved in dumping practices despite the fact that the country's PSF products were very cheap.

Indonesia's PSFs are cheaper because almost half of its exports are of the second-grade quality. The first-grade products are also cheap because local producers can keep their production costs down, she argued.

She said the EU's charges that Indonesia was hurting their local industry were unprobed because West European producers were still gaining margin profit of around 6 percent, way higher than the United States' standard of 3 percent.

Indonesia's share in the EU's PSF imports is also too small to be considered injurious, she said.

She estimated the cumulative share of Indonesia, Australia and Thailand account for only 8.97 percent of all EU PSF imports.

According to the WTO's antidumping regulation, in addition to the dramatic low price, one country can also be charged with antidumping if it controls more than 5 percent of the another country's import market, she said.

"The EU did not reveal Indonesia's exact sharemarket. We will find out whether we really account for that much that we can be charged with antidumping," she added.

She expected the EU's antidumping duties charges would push Indonesia's PSF exports to West European markets to fall by 50 percent.

She said local producers would steer clear of the market for a while to avoid other unexpected charges, while on the other hand, European buyers were expected to hesitate to buy Indonesia's PSFs due to the products' higher prices.

The antidumping charges are expected to cause local producers a potential loss of about US$60 million during the first year of duties imposition alone, she said. The duties will be effective for five year.

Indonesia's export of PSFs to the EU last year reached $12 million.

In addition, the country also exported drawn textured yarn (DTY) exports which amounted to $40 million last year.

Risa said the entire Indonesia's DTY products had also been imposed with EU's antidumping duties up to 20.8 percent since September 1996.

In terms of synthetic-fiber production, Indonesia is ranked sixth in Asia after Taiwan, Korea, China, India and Japan.

About 80 percent of the products are sold domestically with an annual sale of Rp 3.15 trillion.

Annual exports are valued at $217 million, with Europe the main export destination.