WRITTEN QUESTION E-0658/97 by Klaus Lukas (NI) to the Commission (6 March 1997)

Subject: Anti-dumping duty on cotton fabrics

I am informed that the introduction of anti-dumping duties (21 November 1996) on cotton fabrics from Egypt, India, China, Indonesia, Pakistan and Turkey has brought a clear deterioration in the competitive position of the EU processing industry.

According to reports, the Swiss processing industry is also deriving particular benefit from this anti-dumping duty since it can obtain its cotton fabrics free of anti-dumping duty and therefore offer its products on the EU market more cheaply.

1. On what grounds was this duty introduced?

2. How was the impact of these anti-dumping duties on the European processing industry assessed?

3. What are the consequences of this anti-dumping regulation for the European processing industry?

4. How many job losses are to be expected as a result?

5. Why were no measures included in this anti-dumping regulation to prevent a deterioration in the position of the European processing industry?

6. What is the explanation for this competitive advantage for Swiss or even Turkish firms, which are not subject to this anti-dumping duty?

7. What further measures does the Commission plan in this connection?

8. What is its position on the proposal to levy an anti-dumping duty on finished textile products?

Answer given by Sir Leon Brittan on behalf of the Commission (7 April 1997)

The procedure was initiated on 21 February 1996 in response to a request made on behalf of the sector by Eurocoton, the Committee of the Cotton and Allied Textiles Industries in the EEC, on 8 January that year.

The subsequent investigation showed that in 1995 the product in question had been sold on the Community market at dumping prices and that Community manufacturers had therefore suffered material injury. To eliminate this proven market distortion, the provisional anti-dumping duties now in force were introduced on 18 November 1996.

Some Community manufacturers, users and importers, including associations of textile finishing enterprises, sent in written depositions during the investigations. They pointed out that the introduction of measures would affect downstream industries - seriously in some cases -and result in even more pressure on costs because the industries concerned would bear the consequences of higher prices for their raw materials. The Commission estimates that some 23 000 employees in Community undertakings of the type concerned are affected.

As Switzerland and other countries are still able to obtain unbleached woven cotton fabric on which no anti-dumping duty has been charged, it is not impossible that their manufacturers of finished cotton wovens for export now enjoy a competitive advantage. However, the Commission has no information about the cost-price ratio in these countries.

It should nevertheless be pointed out that very few Community importers and users came forward to provide information during the period set in the notification. Hence the information provided could not be regarded as representative. Neither did the depositions made contain sufficient information or evidence to allow the Commission to calculate the full extent of the effects the duties would have on the downstream industries. However, the information available to the Commission did suggest that, given the proportion of input costs accounted for by unbleached woven cotton fabrics - and their many different uses - it was not possible to draw any clear conclusions as to the effect the duties would have on the downstream part of the industry. Since textile processors have many different sources of supply, and competition therefore reigns in the Community market in question, it may be assumed that, taken overall, the position of the employees will not worsen significantly.

The Commission considers that it cannot at present impose antidumping duty on finished textiles or textile products as the industry in question has not entered an application to initiate an anti-dumping procedure. Nevertheless, the Commission is naturally prepared to accept a duly substantiated application from the relevant sector.