COMMISSION OF THE EUROPEAN COMMUNITIES 
C0MC92) 67 final 
Brussels, 28 February 1992 
Proposal for a 
COUNCIL REGULATION (EEC) 
imposing a definitive anti-dumping duty on imports of cotton yarn 
originating in Brazil, and Turkey; and collecting definitively the 
provisional duty 
(presented by the Commission) 
EXPLANATORY MEMORANDUM 
1. The Commission, by Regulation (EEC) N' 2818/91 imposed a provisional 
duty on imports of cotton yarn originating in Brazil, Egypt and 
Turkey. 
2. Having been informed of the main conclusions of the investigations, 
the relevant producers/exporters made known their views in writing and 
were heard by the Commission. 
3. Whenever appropriate, the Commission's provisional findings were 
modified to take account of those views. Consequently, in accordance 
with the provisions of Article 12 of Council Regulation (EEC) N' 
2423/88, the Commission, after consultation of the Advisory Committee, 
proposes to impose definitive anti-dumping duties on imports of cotton 
yarn originating in Brazil and Turkey. 
4. As regards the imports of cotton yarn originating in Egypt, it is 
intended to terminate the proceeding, by Commission decision, since no 
significant margins of dumping have been found. 
- I^Vo 
Council Regulation (EEC) N* 
of 
imposing a definitive anti-dumping duty on imports of cotton yarn 
originating in Brazil, and Turkey; and collecting definitively the 
provisional duty 
THE COUNCIL OF THE EUROPEAN COtllUNITIES 
Having regard to the Treaty establishing the European Economic Community, 
Having regard to Council Regulation (EEC) N' 2423/88 of 11 July 1988<1>, 
on protection against dumped or subsidised imports from countries not 
members of the European Economic Community and in particular Article 12 
thereof, 
Having regard to the fact that the Commission applied on 18 December 1991 
to the EEC-Turkey Association Council, pursuant to Article 47(1) of the 
additional Protocol to the Agreement establishing an Association between 
the European Economic Community and Turkey<2) and that the Association 
Council has taken no decision in this respect, within the time limit 
referred to in Article 47(2) of this Protocol, 
»• 
Having informed the EEC-Turkey Association Council, pursuant to Article 47 
(2) of the above additional protocol, 
Having regard to the proposal from the Commission, submitted after 
consultation within the Advisory Committee as provided for under the above 
Regulation, 
(1) O.J. N- L 209, 2.8.1988, P.1. 
(2) O.J. N* L 293, 29.12.1972, p.4. 
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WHEREAS 
A. PROVISIONAL MEASURES 
(1) The Commission, by Regulation (EEC) N* 2818/91 of 23 September 
1991,(3) imposed a provisional anti-dumping duty on imports into 
the Community of cotton yarn originating in Brazil, Egypt and Turkey 
and terminated the anti-dumping proceeding in respect of this 
product originating in India and Thailand. The Council, by 
Regulation (EEC) N*171/92 of 24 January 1992<4>, extended this 
duty for a period not exceeding two months. 
B. SUBSEQUENT PROCEDURE 
(2) Following the imposition of the provisional anti-dumping duty, the 
interested parties who so requested were granted an opportunity to 
be heard by the Commission. They also made written submissions 
making known their views on the findings. 
(3) Parties were informed of the essential facts and considerations on 
the basis of which it was intended to recommend the imposition of 
definitive duties and the definitive collection of amounts secured 
by way of a provisional duty. They were also granted a period 
within which to make representations subsequent to the disclosure. 
(4) The oral and written comments submitted by the parties were 
considered and, where appropriate, the Commission's findings were 
modified to take account of them. 
(3) O.J. N* L 271, 27.9.91, p.17 
(4) O.J. N* L 183 25.1.92, p.33 
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(5) Certain producers of cotton yarn in the exporting countries concerned 
made themselves known and indicated that they had not exported cotton 
yarn to the Community during the reference period, but had since 
started such exports or had the intention of doing so. These 
companies asked the Commission to take their particular situation 
into consideration. 
(6) Due to the complexity of the procedure and the other reasons 
indicated in recital 11 of Commission Regulation (EEC) N' 2818/91, 
the investigation could not be concluded within the time period 
mentioned in Article 7(9) (a) of Regulation (EEC) N' 2423/88. 
C. PRODUCT UNDER CONSIDERATION 
(7) In its provisional findings (Recitals 4 to 6 of Regulation (EEC) N' 
2818/91) the Commission found that although there are various types 
of cotton yarn, differing namely in thickness, they have physical 
characteristics closely resembling each other and are manufactured 
using essentially the same technology and the same type of equipment 
Moreover, they have a high degree of interchangeabiIity in their end 
use. These findings have not been substantially questioned by the 
producers/exporters. Some of them, however, claimed again that 
certain specific types of cotton yarn which they exported to the 
Community were of different quality than the products manufactured 
and sold by the EC industry and should not be treated as a like 
product. 
(8) The Commission, having re-examined this claim, found that the 
differences in quality did not significantly affect the physical 
characteristics nor the use of the different types of cotton yarn 
imported as compared to those manufactured in the Community. 
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The Council confirms therefore the conclusion that the cotton yarn 
manufactured and sold by the Community industry is to be considered 
as a "like product", within the meaning of Regulation (EEC) N* 
2423/88, of both the product manufactured and sold on the domestic 
market of each of the exporting countries concerned and of that 
manufactured and exported to the EC. 
(9) A Brazilian producer/exporter contested that its exports of cotton 
yarn wound on cones and then requiring further processing (such as 
dyeing) after having been imported into the Community, should not be 
considered as falling within the scope of the present procedure. 
This producer/exporter argued that while the complaint related only 
to cotton yarn not put up for retail sale, the above product was 
destined for retail sale for home knitting and not suitable for 
industrial use, i.e. weaving or knitting on industrial machines. In 
addition, the machinery used to produce this particular type of 
cotton yarn could not, without expensive modifications, be used for 
the production of cotton yarn for industrial use. 
This exporter requested therefore that this product should not be 
subject to any anti-dumping duty. 
The Commission, having consulted a specialised institute for the 
purpose of determining the exact characteristics of the cotton yarn 
concerned and possible uses of this product, has found that it is in 
fact suitable for special industrial uses which are undertaken in the 
Community on a regular basis. Moreover, it was found that the 
machines used to produce this type of cotton yarn could also be used 
for other types without significant modification expenditures. For 
these reasons the Commission considers that the product concerned 
falls within the framework of the proceeding. The Council confirms 
this conclusion. 
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D. COMMUNITY INDUSTRY 
(10) Some producers/exporters claimed that the Community producers 
investigated by the Commission were not fully representative of the 
EC cotton yarn industry. 
In recital 7 of Commission Regulation (EEC) N* 2818/91, the 
Commission outlined the method employed for investigating the 
Community industry and the reasons for its approach. In the view of 
the Commission, the selection of producers carried out according to 
size and geographic location ensures that the companies concerned are 
représentât ive. 
The Council confirms the Commission's approach on this point. 
E. PRODUCERS/EXPORTERS 
(11) As regards the selection of the exporting companies by the Commission 
for determination of normal values, the following objections have 
been made: 
- one cooperating Turkish producer/exporter, not selected for 
verification claimed that the method used by the Commission is not 
specifically provided for by Regulation (EEC) N' 2423/88. 
Consequently it requested an examination of its individual situation 
concerning the dumping determination; 
- some importers argued that the exporting companies selected for 
verification were not fully representative of the other co-operating 
companies. 
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(12) The Commission notes that neither Regulation (EEC) N* 2423/88 nor the 
GATT Anti-Dumping Code requires that the entirety of the producing/ 
exporting companies be investigated for the purposes of establishing 
normal values. Consequently, the Commission as well as the 
authorities of other GATT members, signatories to the Code, have, in 
cases involving a great number of exporters, selected companies which 
together can be considered representative. In the present case, the 
selection criteria applied by the Commission ensures représentâtivity 
as explained in recital 8 of Regulation (EEC) N* 2818/91. 
Furthermore, the methodology used by the Commission was agreed in 
advance by all national Associations, which acted on behalf of the 
member companies, including the Turkish Association. 
As regards the claim by the Turkish producer/exporter that its 
situation be individually investigated, the Commission recalls that 
it had, prior to on-the-spot verification in Turkey, offered all 
exporters, which so wished, including this exporter, such an 
opportunity. No request to this effect was made at that time by the 
above producer/exporter. Moreover, the claim in question was 
received well after the adoption of the provisional measures, and at 
a moment in time where the completion of the investigation would have 
been unduly delayed, had a new on-the-spot verification had to be 
carried out by the Commission. 
In these circumstances, the Council confirms the position taken by 
the Commission. 
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F. NORMAL VALUE 
(a) General 
(13) For the purposes of the definitive findings, normal value was in 
general established on the basis of the same methods as those used in 
the provisional determination of dumping, after taking into 
consideration new facts and arguments presented by the parties. 
(b) Brazil 
(14) Two of the verified Brazilian exporters claimed that the Commission 
had wrongly considered sales of cotton yarn on the domestic market in 
certain months of 1989 as made at a loss. These exporters objected 
to the Commission having deducted the cost of credit to customers 
from the domestic selling price when comparing it with the cost of 
production of cotton yarn, since financing costs were included in the 
latter. 
In order to establish whether domestic sales were in the ordinary 
course of trade in the meaning of Article 2(3)(a) of Regulation (EEC) 
N' 2423/88, the Commission had to examine whether these sales were 
profitable. To this end, the cost of production was calculated by 
taking into account all cost elements, including production financing 
costs. The resulting amount was then compared to the domestic sales 
prices at ex works level. Since these prices do not include, by 
definition, credit to customers, the amounts relating to credit 
contained in actual invoiced prices were deducted. 
The Council confirms the appropriateness of this calculation. 
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(15) As regards the non-cooperating Brazilian producers/exporters, the 
Commission had found for the purposes of its provisional 
determinations, that the level of cooperation had been so low as to 
render the use of the findings made in the investigation 
unrepresentative. Consequently, normal value was determined on the 
basis of information relating to cost of production, supplied by the 
complainant Community industry, plus a reasonable profit margin. 
The Brazilian producers/exporters in question objected, maintaining 
that normal value determined on the basis of the complaint was the 
result of a mere estimation and that the calculation should be based 
on more neutral information available from independent sources such 
as published price lists, official import statistics, etc. 
(16) The Commission has reconsidered this situation in the light of the 
above comments and accepts to use information concerning certain cost 
items for Brazilian cotton yarn contained in a specialised 
publication, which, in the present case, can be considered as a 
re Iiable source. 
Thus, the Commission constructed normal value for the Brazilian non-
cooperating producers/exporters by using for raw material costs and 
profit the weighted average of data concerning the cooperating 
companies, while all other costs are calculated on the basis of the 
information from the above publication. 
(c) Egypt 
(17) For the reasons explained in recital 13 (a) of Regulation (EEC) N' 
2818/91, the Commission constructed normal value of Egyptian cotton 
yarn. All Egyptian exporters objected to this calculation and 
claimed that normal value should have been calculated on the basis of 
the actual domestic selling prices. 
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Furthermore, they insisted that, if constructed values were to be 
applied, the cost of cotton imported from third countries (invoiced 
in dollars) should be calculated on the basis of the special rate of 
exchange in force for raw cotton transactions during the 
investigation period. 
Finally, the Egyptian producers/exporters claimed that the Commission 
had erroneously disregarded certain cost factors like the percentage 
of waste resulting from the cotton yarn manufacturing process and the 
value of this waste when subsequently utilised. 
(18) In addition to the comments above, one Egyptian producer/exporter 
contested the results of the verification, claiming that its 
manufacturing structure was very similar to that of other Egyptian 
producers/exporters for which a lower margin of dumping had been 
determined; that in 1989 costs of production were exceptionally high 
and had decreased in following years; and that export prices of 
Egyptian cotton yarn had been increasing since 1989. 
(19) As regards the use of constructed normal values for Egyptian cotton 
yarn, the arguments submitted by interested parties were the same as 
for the preliminary determination. The Council therefore confirms 
that the Commission's approach, as outlined in recital 13 of 
Regulation (EEC) N' 2818/91, is justified. 
(20) With regard to the rate of exchange used for the calculation of the 
cost of imported cotton, the Commission found that the claim of the 
Egyptian producers/exporters was justified. Consequently the cost 
was recalculated and this modification led to a decrease of normal 
va Iue. 
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(21) Concerning the costs of production for Egyptian cotton yarn, the 
Commission re-examined its calculations and made the necessary 
modifications to take into account, whenever appropriate, the claim 
relating to the value of the waste. These modifications also led to 
a decrease of normal value. 
(22) As regards the objections listed in recital 18, the Commission 
considers them unfounded, since the differences in normal values are 
explained by differences in the cost of production found in the 
course of the investigation. Furthermore, factors relating to a 
period outside the period of investigation cannot be taken into 
consideration to determine whether dumping exists. The Council 
confirms this position. 
(d) Turkey 
(23) Two Turkish producers/exporters claimed errors in the calculation of 
the cost of production and the determination of profit. The claims 
were found to be justified and adjustments to normal values were made 
accordingly. 
(e) Complainants 
(24) The complainants contested the Commission's provisional findings 
concerning normal value. In particular they argued that the 
Commission should, in every instance, have constructed normal value. 
Furthermore, where constructed values were established, they 
questioned the results of the Commission's calculations, referring to 
the figures contained in specialised publications. 
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The Commission cannot accept these comments. Indeed, normal values 
can be constructed only when conditions set out in Article 2 (3)(b) 
of Regulation (EEC) N' 2423/88 are fulfilled. This rule has been 
respected in the present procedure. Furthermore, normal values have 
been calculated on the basis of costs verified during the 
investigation and these data must receive priority over information 
which has not been the subject of a comparable verification. 
The Council confirms the Commission's view on this matter. 
G. EXPORT PRICE 
(a) General 
(25) With the exception of point (b) below, no substantial objections have 
been raised by any party concerning the provisional determination of 
export prices. Consequently, the Council confirms these findings. 
(b) Brazil 
(26) The Brazilian exporters maintained the claim mentioned in recital 17 
of Regulation (EEC) N* 2818/91. They insisted that the application 
of the official rate of exchange of 1 Novo Cruzado for 1 US dollar, 
during the first quarter of 1989, had depressed export prices, with 
the effect of creating artificial dumping, since at the same time 
inflation had continuously increased prices on the Brazilian market. 
(27) This position was supported by the Brazilian authorities, which 
confirmed that the exchange rate between the Novo Cruzado and the US 
dollar was frozen in the first quarter of 1989 for the purposes of 
domestic economic policy. 
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The Brazilian authorities expressed the view that, as a resuit of 
that exceptional situation, the use of the official exchange rates 
applicable for that period would prevent a fair comparison between 
normal value and export price. They requested that the exchange rate 
be adjusted so as to fully reflect the actual depreciation of the 
Novo Cruzado in 1989 in accordance with the rate of inflation in 
BraziI. 
(28) The establishment, by the competant authorities, of the exchange rate 
of a third country's currency is a decision which cannot be the 
subject of appreciation by the Community institutions in the 
framework of an anti-dumping proceeding. It is, therefore, the 
Commission's constant practice, confirmed in the jurisprudence of the 
Court of Justice, to use the official exchange rate applied to 
international commercial transactions. To adjust this exchange rate 
for the purposes of dumping calculations would be inappropriate and 
contrary to the principle of neutrality as regards the monetary 
aspects of an anti-dumping case. 
The Council confirms this position and consequently considers the 
claim inacceptable. 
H. COMPARISON 
(29) No new arguments were made by the interested parties concerning the 
method followed by the Commission in the comparison between normal 
value and export price, as described in recitals 18 to 20 of 
Commission Regulation (EEC) N" 2818/91. Thus, the Council confirms 
this method. 
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I. DUMPING MARGIN 
(a) Cooperating producers/exporters 
(30) In comparing normal values for domestically sold cotton yarn of the 
cooperating producers/exporters with their export prices to the 
Community, the final examination of the facts shows the existence of 
dumping in respect of cotton yarn originating in Brazil, Egypt and 
Turkey. For the cooperating producers/exporters which were visited, 
individual dumping margins have been established on the basis of the 
amount by which the normal value exceeds the export price to the 
Community. 
Furthermore, for the cooperating producers/exporters which were not 
visited, the dumping margins were established according to the method 
described in recital 8 of Regulation (EEC) N* 2818/91. 
(31) The dumping margins, expressed as a percentage of the total CIF value 
of the product concerned varied according to the exporters as 
fo11ows: 
- (i) BraziI 
Fàbrica de Rendas Arp SA 7.OX 
Fiaçâo e Tecelagem Kanebo do Brasil 15.8% 
Nisshinbo do Brasil Industria Text il Ltda 12.1% 
The weighted average of the dumping margins found for the 
above companies is 12,9%. 
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- (ii) Egypt 
Misr El Amria Spinning & Weaving Co. 0.4% 
Misr Iran Textile Co -Miratex" 0.1% 
Misr Shebin El Kom For Spinning 
& Weaving (Shebintex) 0.1% 
Unirab Spinning & Weaving Co. 0.0% 
The weighted average of the dumping margins found for the 
above companies is 0.1%. These margins are of such a level 
as to be considered de miminis. 
- (Mi) Turkey 
Yalova Elyaf ve Iplik Sanayii ve 
Ticaret AS 5.6% 
Ceytas (Ceyhan TekstM Sanayii AS) 12.1% 
Yidas 4.9% 
Birko (Birlesik Koyunlulular Mensucat 
Tic ve San AS) 7.7% 
Taris (Tarim Satis Kooperatif 1eri 
Birli Keri) 8.6% 
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Sôktas Pamuk ve Tarim Urunerini Degerlendirme 
Ticaret ve Sanayii As 9.5% 
The weighted average of the dumping margins found for the above 
companies is 9,0%. 
(b) Non-cooperating producers/exporters 
(32) For the purposes of the provisional findings concerning those 
Brazilian producers/exporters that neither replied to the 
Commission's questionnaire nor otherwise made themselves known, 
dumping had been determined on the basis of the facts available in 
accordance with the provision of Article 7 (7) (b) of Regulation 
(EEC) N' 2423/88. 
The Commission considered it appropriate to apply the highest margin 
of dumping found for non- cooperating producers/exporters from 
Turkey. 
The Council confirms this view since no new evidence has been 
provided showing that the margin of dumping of the non-cooperating 
producers/exporters was actually lower than that of the highest 
margin found for a cooperating company. 
(33) For the Brazilian non-cooperating producers/exporters, the margin of 
dumping resulting from the re-caluclation of normal value as 
described in recital 16 is of 16.6%. 
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(34) The Council has also considered the situation of producers of cotton 
yarn in the exporting countries concerned that did not have any 
exports of cotton yarn to the Community during the reference period, 
but have since started such exports or have the intention of doing so 
(so-called "newcomers"). The Council notes that the Commission is 
ready to initiate without delay a review proceeding for exporters who 
supply sufficient evidence to the Commission that they did not export 
cotton yarn to the Community during the reference period; that they 
only started such exports after the said period or have a firm 
intention of doing so*, and that they are not related to or associated 
with any of the exporters subject to the ant I-dumping duty. 
J. INJURY 
(a) Cumulation 
(35) In its provisional findings, the Commission concluded that the 
effects of Brazilian, Egyptian, and Turkish dumped imports had to be 
assessed cumulatively. A number of exporters and importers objected 
to this conclusion. 
(36) The Commission notes that its provisional findings were based on the 
standard practice of the Community institutions to cumulate imports 
from several countries when these imported products compete with each 
other and with the like product of the Community industry and when 
the dumped imports are not negligible as such. 
The Council considers that, in the present case, these conditions are 
met for the imports from Brazil and Turkey, while the Egyptian 
imports for which no significant dumping has been finally determined, 
are not to be taken into account for the purpose of injury 
assessment. 
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(37) The Brazilian exporters claimed that their exports should not be 
cumulated with those from other countries, since the volume of their 
exports in 1989 was different from that considered by the Commission 
in its provisional findings and at such a low level as to be 
negligible. In this context they provided the Commission with the 
Brazilian official statistics concerning exports of cotton yarn to 
the EEC showing a total volume of exports actually lower than that 
indicated by Eurostat. 
(38) The Commission has again examined this question and confirms the 
accuracy of the data used which corresponds to Eurostat figures. 
The Council agrees wih this position. 
(39) The Brazilian exporters argued also that their market share in 1989 
was lower than that considered by the Commission in its provisional 
findings. They claimed that, based upon an overall EC consumption of 
1.728.571 tonnes of cotton yarn in 1989, the Brazilian market share 
did not exceed 1,55%. 
The Commission notes that, as indicated in recital 28 of Regulation 
(EEC) N' 2818/91, the overall EC consumption amounted to 1.184.000 
tonnes. Under these conditions, the market share of dumped imports 
from Brazil corresponded in 1989 to 2.25%, which cannot be considered 
as negIi g i bIe. 
(40) The Council confirms the above findings and concludes therefore that 
the effects of Brazilian and Turkish imports have to be assessed 
cumulatively. 
(b) Volume and market share of dumped imports 
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(41) As concluded in recital 36, for the purposes of the definitive 
findings the volume and market share of dumped imports must refer, to 
the products exported from Brazil and Turkey. In considering the 
period between 1986 and 1989, dumped imports from these two countries 
were approximately 111 305 tonnes in 1986, 120 682 tonnes in 1987, 
117 824 tonnes in 1988 and 104 130 tonnes in 1989. The market share 
of the Brazilian and Turkish exporters considered together was as 
follows: 9.6% in 1986, 9.3% in 1987, 9.8% in 1988 and 8.7% in 1989. 
The Council confirms these findings. 
(c) Price undercutting of dumped imports 
(42) No comments having been made by the interested parties, the Council 
confirms the findings and conclusions of the Commission, as described 
in recitals 31 and 32 of Commission Regulation (EEC) N' 2818/91. 
(d) Other relevant economic factors 
(43) The Commission concluded in its provisional findings (recitals 33 to 
40 of Regulation (EEC) N* 2818/91) that the Community industry had 
suffered material injury which manifested itself, in particular, by a 
sharp decline of selling prices, financial losses especially in 1988 
and 1989, lack of return in investment, closure of a large number of 
plants and substantial loss of jobs. 
(44) No new facts concerning the injury findings were submitted to the 
Commission but the exporters concerned objected that some relevant 
economic factors relating to the Community industry, like the 
evolution of its production and of its market share proved that this 
industry was not suffering from material injury. The 
producers/exporters pointed to the fact that the Community producers 
investigated, increased their production in the period from 1986 to 
1989 by 5% and their market share from 19.5% to 20.5%, while their 
capacity utilisation was stable. Furthermore, they invested the 
amount of 542 million ECU in only two years. 
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(45) The Commission considers that, as established by Regulation (EEC) N' 
2423/88, the relevant economic factors of injury must not be 
evaluated in isolation since no one or several of them can 
necessarily give decisive guidance. When examining these factors, 
the Commission agrees that the figures concerning the evolution of 
the EC producers' output as well as of their market share, were not 
substantially negative from 1986 to 1989. Nevertheless, these 
figures must be analysed in close conjunction with those relating to 
other important factors like profitability, investment, plant 
closure, employment etc. 
As explained in Commission Regulation (EEC) N* 2818/91, the cotton 
yarn prices of the Community producers declined from ECU 3.47 per 
kilo in 1986 to ECU 3.12 in 1989. In the same period there was a 
decrease in profitability of 14 percentage points. In particular, in 
1989 losses were registered amounting to 5.7%, and out of all the 
Community producers investigated only 4 showed profits. 
This situation had strong negative consequences especially in terms 
of job losses and plant closures. Only in the Community companies 
investigated, the job losses in the years 1988 and 1989 amounted to 
2.149. When the situation is considered in respect of the entire 
Community industry, it appears from the information available to the 
Commission that, in 1989 only, 29 cotton spinners closed definitively 
their plants with a loss of 7.263 jobs. 
(e) Conclusion on injury 
(46) In the light of the above, the Council concludes that the Community 
industry suffered material injury, within the meaning of Article 4(1) 
of Regulation (EEC) N' 2423/88. 
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K. CAUSATION OF INJURY 
(a) General 
(47) For the purposes of its provisional findings, the Commission had 
concluded that the investigation had not revealed any factors 
causing material injury to the Community industry other than the 
dumped imports from Brazil, Egypt and Turkey. This conclusion was 
based mainly on the fact that the loss of profitability and the other 
negative economic circumstances had coincided with the continuing 
price depression and price undercutting on the Community market, 
owing to the low prices of dumped imports. 
The exporters concerned objected, maintaining that the difficulties 
faced by the Community industry were due to reasons other than the 
imports of cotton yarn in question. They argued that the Commission 
had omitted to consider the following points: 
- the Community industry had taken wrong commercial and 
financial decisions when investing heavily on automated 
spinning mills and concentrating on open end technology 
instead of persisting in the traditional ring spun cotton 
yarn. Moreover, these investments have had the effect of 
removing many manual tasks. 
- a part of the Community industry had voluntarily withdrawn 
from the EC cotton yarn market, since their production efforts 
were concentrated on viscose and other blended yarns. 
- EC producers' costs had gone up in the period between 1986 
and 1989 because of a substantial increase of interest rates. 
- Some of the Community industry's difficulties were the 
consequence of internal factors such as the increased 
competition among Community producers in the course of the 
completion of the EC's single market. 
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(48) The Commission considers that most of the arguments listed in recital 
47 have already been answered in the Regulation imposing the 
provisional duties. It agrees that, as indicated in recital 37 of 
Regulation N* 2818/91, the Community industry made considerable 
investments to modernise plant and equipment but this was due to the 
reasonable purpose to remain in the ranks of the technologically most 
advanced spinners in the world in order to keep a high level of 
compet it iveness. 
Furthermore, as regards investments on the open end technology, a 
comparison relating to the period between 1980 and 1989, showed that 
in fact the EC producer investments in the sector were less than 
those of the North American spinners. 
Indeed, regarding the installation of new machinery, for every 100 
new spindles there were 49 new rotors in North America and only 21 in 
the Community. This clearly shows that the Community industry 
investments in the sector were not, in the period considered, 
abnormal I y high. 
Furthermore, the Commission notes that the considerable amounts 
invested by the Community industry for restructuring indicate its 
precise intention to be present and competitive in the whole cotton 
yarn market, rather than to partially withdraw from this market or to 
concentrate on the production of special types of cotton yarn. 
As regards the interest rates operating in the cotton yarn 
manufacturing sector, the Commission found that they increased in the 
EC from 1987 to 1989 by only 0.5% which cannot be considered a cause 
of abnormal increase of the Community industry's costs. 
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As indicated in recital 43 of Regulation (EEC) N* 2818/91, the 
Commission is aware of the fact that some Job losses might have been 
the consequence of investments in high technology plants removing 
manual tasks. In addition, the Commission cannot exclude that the 
internal competition between Community spinners may have had negative 
effects for some of them. However, these factors do not exclude that 
the dumped imports had a clear detrimental impact, due especially to 
their low prices, on the state of the Community industry. 
(b) Effects of quantitative restrictions 
(49) Exporters argued that the existence of bilateral agreements with the 
interested countries establishing quantitative restrictions for 
imports of cotton yarn had the consequence that no injury could have 
been caused to the Community industry by these imports. 
The Commission reiterates in this context its considerations in 
recital 45 of Regulation (EEC) N' 2818/91. Indeed, quantitative 
restrictions protect the Community industry from excessive volumes of 
imports, but do not prevent injury resulting from unfair trading 
practices such as dumping imports at very low prices. 
(50) Furthermore, it has been argued by the Turkish exporters that their 
exports of cotton yarn to EC were subject, in addition to 
quantitative restrictions, to a system of minimum prices applied 
until 1988 and that it followed, from the combined effect of this 
system and the quantitative restrictions, that no injury could have 
been caused by Turkish exports, at least up to 1988. 
This argument cannot be accepted since the price mechanism mentioned 
above was suspended in 1988 upon the request of the Commission 
because it was ineffective and could easily be circumvented. 
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(c) Effects of other factors 
(51) The Commission examined whether its conclusions on causation of 
injury in Regulation (EEC) N' 2818/91 could be maintained, given that 
the dumping margins for cotton yarn imports from Egypt were found to 
be insignificant and that these imports therefore have to be 
disregarded from the framework of the present proceeding. 
The Commission considers that taking due account of the considerable 
market share held by Brazilian and Turkish exports and the important 
margin by which these exports undercut Community producers' prices, 
the dumped imports from Brazil and Turkey taken in isolation have to 
be considered as causing material injury to the Community industry. 
The Council confirms this conclusion. 
L. COMMUNITY INTEREST 
(52) In its provisional findings, the Commission considered and weighed up 
the interests of the Community industry as well as those of other 
parties like importers of cotton yarn, end-users, etc. For the 
reasons given in recitals 42 to 49 of Regulation (EEC) N' 2818/91, it 
concluded that the interest of the Community called, on balance, for 
granting protection to the Community industry against unfair 
competition from dumped imports. 
(53) Following the provisional measures, a number of submissions were 
received from Community importers and, in particular, users of cotton 
yarn. In these submissions it was argued that an increase in import 
prices of cotton yarn from the countries concerned due to anti­
dumping dut ies would have negative effects on their businesses. 
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Weavers of cotton yarn especially complained that an increase in the 
price of their raw material would reduce their competitiveness vis-à-
vis weavers in third countries, and would bring about an increase in 
ready-made textiles exports to the Community. It was submitted that 
the result could be job losses and mill closures in the Community 
weaving industry, especially in the case of single-stage weaver 
(weaving mills that are not integrated with spinning mills). Some 
weavers claimed difficulties in sourcing cotton yarn from a 
particular area of the Community arguing that the spinning industry 
in that area had already been "decimated beyond revival". 
Others argued that it would have been more logical if the Community, 
in taking action against unfairly low-priced imports, had started at 
a higher stage in the production process leading to finished garments 
and fabrics. 
(54) Since the basic purpose of anti-dumping duties is to remove the 
injury which dumped imports cause to a Community industry and thereby 
to re-establish open and fair competition In the Community market for 
the product concerned, prices of cotton yarn should normally increase 
due to anti-dumping duties on dumped imports. As regards end-users of 
cotton yarn, the Commission considers that an advantage, in terms of 
low prices, cannot justify unfair commercial practices, which are 
detrimental to the Community producers of this product and that the 
importers have no vested rights that this advantage persists. 
(55) With respect to the alleged difficulties of sourcing cotton yarn in a 
particular area of the Community, the Council sees no reason why 
sourcing should be restricted to a particular area of the internal 
market. Taking the Community spinning industry as a whole, it 
appears unfounded, provided that measures are taken against unfairly 
priced imports, to declare its demise beyond revival. 
25 -
(56) Furthermore, the Council notes that, should definitive anti-dumping 
measures not be taken, the number of cotton yarn spinners in the 
Community would continue to decline with additional loss of jobs. 
Indeed, the trend in factory closures due to dumped imports is such 
that, without measures, the continued existence of the industry as a 
whole may be said to be in danger. From 1989 to the end of 1991, 87 
production units of cotton yarn in the Commmunity, including 3 of the 
EC producers verified, were forced to close, causing a loss of 17,423 
jobs. This amount does not include job losses due to the 
restructuration of companies which are still operational. 
Similar views were expressed by the European Trade Union Committee 
for Textiles, Clothing and Leather, representing Community workers in 
these industrial sectors. 
(57) The Council also notes that Eurocoton and the European Trade Union 
Committee for Textiles, Clothing and Leather represent producers and 
workers in both the spinning and the weaving industries of the 
Community. It can be assumed that, in strongly supporting definitive 
anti-dumping duties, both organisations have carefully weighed the 
interests of all their members, including weavers. 
Provided that the injury from dumped imports is removed, the 
Community spinning industry should be able to be fully competitive, 
the more so as it has made significant investments in technology, 
enabling it to compete with low-labour cost countries, to well adapt 
to market requirements in the Community. 
(58) No submissions were received from Community consumers of products 
made from cotton yarn. The Council considers that in the medium-term 
consumers should benefit from a sound competitive situation in which 
the number of suppliers of cotton yarn is not diminished by unfair 
trading. 
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(59) In the light of the above, the Council confirms the Commission's 
findings that it is in the Community's interest to impose anti­
dumping measures to eliminate the injurious effects of imports of 
cotton yarn originating in Brazil and Turkey. 
M. UNDERTAKINGS 
Both the Turkish and Brazilian authorities, having been informed of the 
essential facts and considerations on the basis of which it was intended to 
recommend the imposition of definitive duties, offered, on behalf of the 
exporters concerned, a form of undertaking. 
In the case of Turkey, this offer did not correspond to the provisions of 
Article 10 of Regulation (EEC) n* 2423/88, and in particular the 
possibility of imposing duties in the case of violation or withdrawal as 
provided for in article 10 (6) of Regulation n* 2423/88. In addition, the 
Commission considers that effective monitoring of the adherence of 
companies to such an undertaking would not be practicable. 
As regards the Brazilian offer which provides for voluntary quantitative 
export restrictions, the Commission was not satisfied that its acceptance 
would eliminate the injurious effects of the dumping. 
The Council notes that for these reasons both these offers of undertaking 
have, after consultation, been rejected. 
N. DUTY 
(60) Provisional anti-dumping duties were imposed at the level of the 
dumping margins determined, with the exception of one Brazilian 
exporter for which the level imposed was that adequate to remove the 
injury caused. On the basis of the definitive findings, this result 
remains unchanged. 
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O. COLLECTION OF PROVISIONAL DUTIES 
(61) In view of the dumping margins established and the seriousness of the 
injury caused to the Community industry, the Council considers it 
necessary that amounts secured by way of provisional anti-dumping 
duties, with the exception of those relating to the imports of 
Egyptian cotton yarn, should be definitively collected to the extent 
of the amount of the duty definitively imposed. 
HAS ADOPTED THIS REGULATION: 
Article 1 
(1) A definitive anti-dumping duty is hereby imposed on imports of cotton 
yarn falling within C.N. codes 5205 11 00 to 5205 45 90 and 5206 11 
00 to 5206 45 90 and originating in Brazil and Turkey. 
(2) The rate of the duty applicable to the net free-at-Commun!ty-front1er 
price before duty shall be as follows: 
(a) 16,6% for cotton yarn originating in Brazil, Taric additional 
code 8551 with the exception of imports manufactured by the 
following companies, which shall be subject to the rate of 
duty mentioned hereunder: 
Rate of Taric additional 
duty code 
Fàbrica de Rendas Arp. SA 7.0% 8552 
Nisshinbo do Bras il Indûstria 
TôxtiI Ltda 12.1% 8553 
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Fiaçao e Tecelagem Kanebo 
do BrasiI 11.2% 8554 
Filobel SA Indûstrias Téxtels 
do BrasiI 12.9% 8555 
Toyobo do BrasiI Indûstria 
TéxtiI Ltda 12.9% 8555 
Indûstria Têxtil Tsuzuki Ltd 12.9% 8555 
SA Text il Nova Odessa 12.9% 8555 
Coton!fieio de Sao Bernardo 12.9% 8555 
Companhla BrasiIeira 
de Fiaçào 12.9% 8555 
(b) 12,1% for cotton yarn originating in Turkey, Tarie additional 
code 8562 with the exception of imports manufactured by the 
following companies, which shall be subject to the rate of 
duty mentioned hereunder: 
Rate of Taric additonal 
duty code 
Birko (Birlesik Koyunlulular 
Mensucat Tic ve San AS) 7.7% 8563 
Ceytas (Ceyhan Tekst iI 
SanayiI AS) 12.1% 8564 
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Sôktas Pamuk ve Tarim Urunerini 
Degerlendirme Ticaret ve 
Sanay i i AS 9.5% 8565 
Tar is (Tar im Sat is 
Kooperatifieri Birli keri) 8.6% 8566 
Yalova Elyaf ve Iplik SanayM ve 
Ti caret AS 5.6% 8567 
Yidas 4.9% 8568 
Sonnez Pamuklu Sanayii AS 9.0% 8569 
Cukurova Sanayi isletmeleri 
TAS 9.0% 8569 
Akip TekstiI 9.0% 8569 
Karsu (Tekstil Sanay ve 
Tic AS) 9.0% 8569 
Trakya Iplik Sanayi AS 9.0% 8569 
Bisas Bursaiplik Sanayii AS 9.0% 8569 
Meptas Manisali Errensel 
Pazadama ve Ticaret AS 9.0% 8569 
Hateks (Hatay TekstiI 
isletmeleria AS) 9.0% 8569 
The free-at-Community-frontier price as indicated in paragraph 2 
shall be net if the actual conditions of payment provide for payment 
within 30 days of the arrivai of the goods on the customs territory 
of the Community. It shall be increased by 1 % for each further 
month by which the period for payment is extended. 
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4. In cases where the exporting company is not the same as the producing 
company the rate of duty applicable to the imports of the products of 
the producing company shall apply. 
5. The provisions in force concerning customs duties shall apply. 
Article 2 
The amounts secured by way of provisional anti-dumping duty under 
Regulation (EEC) N' 2818/91 concerning the imports from Brazil and Turkey, 
shall be definitively collected at the duty rate definitively imposed. 
Amounts secured in excess of the definitive rate of duty shall be released 
Article 3 
This Regulation shall enter into force on the day of its publication in the 
Official Journal of the European Communities. 
This Regulation shall be binding in its entirety and directly applicable in 
a 11 Member states. 
Done at Brussels, For the Council 
The President 
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ISSN 0254-1475 
CO M (92) 67 final 
DOCUMENTS 
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ISBN 92-77-41663-7 
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