Proposal for a Council Regulation amending Council Regulation (EC) No 2398/97 imposing a definitive anti-dumping duty on imports of cotton-type bed linen originating in Egypt, India and Pakistan, and terminating the proceeding with regard to imports originating in Pakistan
Date: 2002-01-03
Institutions: European Commission
Subjects: Egypt, India, Pakistan, anti-dumping duty, import, textile product

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 03.01.2002
COM(2001) 812 final

2001/0326 (ACC)

Proposal for a

COUNCIL REGULATION

amending Council Regulation (EC) No 2398/97 imposing a definitive anti-dumping duty
on imports of cotton-type bed linen originating in Egypt, India and Pakistan, and
terminating the proceeding with regard to imports originating in Pakistan

(presented by the Commission)

EXPLANATORY MEMORANDUM

In November 1997 the Council imposed definitive anti-dumping duties ranging from 2,6% to
24,7% on imports of certain bed linen originating in Egypt, India and Pakistan.

On 12 March 2001 the WTO Dispute Settlement Body (‘DSB’) adopted an Appellate Body
report and a panel report on the case "European Communities-AD duties on imports of cotton-
type bed linen from India” ("the reports"). The reports concluded that the Community acted
inconsistently with the WTO Anti-dumping Agreement in some instances such as "zeroing"
and the method used to calculate SG&A and profit in the establishment of normal value.

On 5 July 2001, the Council adopted a Regulation on the measures that may be taken by the
Community following WTO Dispute Settlement Body reports concerning anti-dumping and
anti-subsidy measures. On 14 August 2001,
the Council further adopted a Regulation
suspending the measures against India.

The attached proposal for a Council Regulation takes into account certain legal interpretations
contained in the reports with regard to the measures concerning imports originating in Egypt
and Pakistan. On the basis of these findings it
is proposed to terminate the proceeding
concerning imports of cotton-type bed linen originating in Pakistan and suspend the
application of the anti-dumping duties with regards to imports of cotton-type bed linen
originating in Egypt.

As already provided for in the Council regulation regarding India, the suspended measures
against Egypt will lapse on 14 February 2002 unless a review is initiated before 31 March
2002, following the publication in the Official Journal of the European Communities of a
notice informing that an interested party has requested a review.

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2001/0326 (ACC)

Proposal for a

COUNCIL REGULATION

amending Council Regulation (EC) No 2398/97 imposing a definitive anti-dumping duty
on imports of cotton-type bed linen originating in Egypt, India and Pakistan, and
terminating the proceeding with regard to imports originating in Pakistan

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article
133 thereof,

Having regard to Council Regulation (EC) No 1515/20011, on the measures that may be taken
by the Community following a report adopted by the WTO Dispute Settlement Body
concerning anti-dumping and anti-subsidy matters,

Having regard to Council Regulation (EC) No 384/962 (‘the Basic Regulation’), on protection
against dumped imports from countries not members of the European Community,

Having regard to the proposal made by the Commission after consultation of the Advisory
Committee,

Whereas:

A.

(1)

B.

(2)

1

2

3

4

5

Existing measures

The Council, by Regulation (EC) No 2398/97 of 28 November 19973, as last amended
by Council Regulation (EC) No 1644/20014, imposed a definitive anti-dumping duty
India and Pakistan
on imports of cotton-type bed linen originating in Egypt,
("definitive Regulation"). The definitive Regulation was preceded by Commission
Regulation (EC) No 1069/975 imposing a provisional anti-dumping duty on imports of
bed linen originating in Egypt, India and Pakistan ("provisional Regulation").

Reports adopted by the Dispute Settlement Body of the WTO

On 12 March 2001, the Dispute Settlement Body of the World Trade Organisation
('WTO') adopted an Appellate Body report and a panel report as modified by the

OJ L 201, 26.7.2001, p. 10.
OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation (EC) No 2238/2000 (OJ L 257,
11.10.2000, p. 2).

OJ L 332, 4.12.1997 p. 1.

OJ L 201, 14.8.2001, p. 1.
OJ L 156, 13.06.1997, p. 11.

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Appellate body report on the case 'European Communities - anti-dumping duties on
imports of cotton-type bed linen from India' (Reports).6

Product under consideration and like product

The product under consideration is certain bed linen of cotton fibres, pure or mixed
with man-made fibres or flax (flax not being the dominant fibre), bleached, dyed or
printed originating in India, Pakistan and Egypt, falling within CN codes ex 6302 21
00 (taric codes 6302 21 00*81, 6302 21 00*89), ex 6302 22 90 (taric code 6302 22
90*19), ex 6302 31 10 (taric code 6302 31 10*90, ex 6302 31 90(taric code 6302 31
90*90, ex 6302 32 90 (taric code 6302 32 90*19). The Reports do not affect the
findings
in the definitive Regulation concerning the product under
consideration and the like product.

set out

Reconsideration of findings

PRELIMINARY REMARK

Following the adoption of the aforementioned Reports, the Council, by Regulation
(EC) No 1644/2001, considered it appropriate to amend and suspend the definitive
anti-dumping duty on imports of bed linen originating in India.

It is now considered appropriate to take into account certain legal interpretations
contained in the Reports with regard to the measures concerning imports of bed linen
originating in Egypt and Pakistan, and to determine whether these existing measures
remain appropriate,
in accordance with Article 2 of Council Regulation (EC)
No 1515/2001.

DUMPING

Introduction

the legal

First, it was considered appropriate to reconsider the existing findings taking into
account
interpretation made in the Reports concerning the practice of
"zeroing" negative values when establishing the weighted average margin of dumping
for Egypt and Pakistan and the determination of the amount of profit for the purpose
of constructing normal values for certain Egyptian and Pakistani exporting producers.
All other calculation methods applied are those used in the original investigation. For
further details, reference is made to the above-mentioned provisional Regulation and
definitive Regulation.

It is recalled that in the original investigation, the investigation of dumping covered
the period from 1 July 1995 to 30 June 1996 ("IP").

Sampling

It is recalled that in view of the large number of exporters in the countries concerned,
it was decided during the original investigation to apply sampling in accordance with
Article 17 of the Basic Regulation.

C.

(3)

D.

1.

(4)

(5)

2.

2.1

(6)

(7)

2.2

(8)

6

Document WT/DS141/9 of 22 March 2001.

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2.3.

Pakistan

(9)

(10)

Since only one out of the five companies in the main sample for Pakistan had
representative global domestic sales and the profitable domestic types represented less
than 80% but more than 10% of total domestic sales, the amounts for SG&A and profit
used to construct normal value were those actually made in the ordinary course of
trade by this company, in accordance with the first sentence of Article 2(6) of the
Basic Regulation.

For the other four companies, in order to take into account the legal interpretations
made in the Reports and in accordance with Article 2(6)(a) of the Basic Regulation,
the amounts for SG&A and profits used to construct normal value were the weighted
the actual amounts incurred and realised by the company with
average of
representative global domestic sales mentioned above and a company in the reserve
sample which had also representative global domestic sales. It should be noted that
sales not made in the ordinary course of trade have not been eliminated when
determining the profit margin attributable to the other four companies.

(11) No changes have been necessary as far as the original findings regarding the export
price and adjustments pursuant to Article 2(10) of the Basic Regulation are concerned.

(12)

(13)

The constructed normal value by type was compared with the export price by type.
Taking account of the legal interpretations made in the Reports, no "zeroing" was
applied in the revised calculation of the overall dumping margin for each sampled
company.

The revised calculation shows that no dumping exists for exports of the product
concerned made by any sampled companies in Pakistan during the IP. Consequently,
the proceeding should be terminated for imports of the product concerned originating
in Pakistan. It should be noted that there would also be no dumping if sales not made
in the ordinary course of trade had been excluded in the determination of constructed
normal value on the basis of the method set out in Article 2(6)(a) of the Basic
Regulation.

2.4.

Egypt

(14) With regard to Egypt, no changes have been necessary as far as the original findings
regarding the export price and adjustments pursuant to Article 2(10) of the Basic
Regulation are concerned. The normal value, which was based on constructed values
for three sampled companies without representative domestic sales in the ordinary
course of trade, was reconsidered in the light of the interpretations made in the Reports
concerning the profit margin used in determining such constructed normal values. This
is because the amount of profit used in the original investigation was based on the data
of one company. However, there are no data available from the original investigation
which would allow the determination of the amount for profit on the basis of any
methodology provided for under Article 2(6) of the Basic Regulation. In these
circumstances, a detailed reconsideration of the dumping margin for Egypt is not
possible.

(15) Notwithstanding the above,

the rather low level of profit used in
determining the constructed normal values in the original investigation resulted in
relatively high dumping margins, reveals that that dumping is still likely to exist for

the fact

that

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Egypt during the IP. However,
the level of any dumping margins would be
substantially reduced if no "zeroing" was applied when calculating the dumping
margin for each sampled company.

E.

Termination and suspension of duties

(16) With respect to imports originating in Pakistan, the proceeding should be terminated in

view of the finding in recital (13) above.

(17) Although a detailed reconsideration of the situation of dumping of imports originating
in Egypt during the IP was not possible, it is very likely that dumping still exists,
although at substantially reduced levels. A definitive finding on the situation of
dumping of imports originating in Egypt would have necessitated more detailed
consideration being given to the application of the various methods of calculating
SG&A and profits as provided for under Article 2(6) of the Basic Regulation. This
would have required additional
the time of the original
investigation, was not collected since it was not considered relevant.

information which, at

(18) Anti-dumping measures were originally imposed on India, Egypt and Pakistan. It has
been found that no dumping exists for imports from Pakistan and it is considered that
the level of dumping by imports originating in both India and Egypt has decreased. In
addition, the anti-dumping duty on imports originating in India was suspended on
14 August 2001 by Council Regulation (EC) No 1644/2001. The measures are set to
expire with regard to India on 14 February 2002, unless a review has been initiated
before that date.

(19) During the IP, Egypt had the smallest share of imports of bed linen originating in the
three countries concerned. Indeed, imports originating in Egypt only represented about
14% of total imports from the three countries and about one third of total bed linen
imports from India.

(20)

It is not clear whether a review will ultimately be initiated with regard to imports of
bed linen originating in India. Thus, the future status of measures on dumped imports
of bed linen from India is uncertain. If no such review is initiated it may be necessary
to examine whether the imports from Egypt, when taken in isolation, had caused
material injury to the Community industry.

(21) On the other hand, if a review is initiated with regard to imports from India, the
situation of bed linen imports from Egypt, including the conditions for cumulation,
could be examined in parallel.

(22)

(23)

For the reasons above and on grounds of procedural efficiency, it is appropriate to
suspend the measures on imports of bed linen originating in Egypt, while providing all
interested parties concerned with an opportunity to submit information/observations,
and, if appropriate, to request a review.

The Pakistani and Egyptian authorities,
the Pakistani and Egyptian exporting
producers and their associations, all interested parties in the Community, in particular
the Community industry,
their
associations, received disclosure of the proposed course of action and were given an
opportunity to comment and to be heard. The oral and written comments submitted by

traders and, where relevant,

importers, users,

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these parties were considered but have not altered the conclusions reached in this
Regulation.

(24) Any requests for a review and any observation/submission of information concerning
the measures concerning imports of bed linen from Egypt must be made in writing and
be submitted to the following address:

European Commission
Directorate General for Trade
Directorate B and C
TERV 0/13
Rue de la Loi/Wetstraat 200
B-1049 Brussels
Fax (32-2) 295 65 05
Telex COMEUR B 21877

(25) On the grounds of procedural efficiency, if no notice is published before 14 February
indicating that an
2002 in the Official Journal of
interested party has
should
automatically expire with regard to imports originating in Egypt. If such a notice is
published before the aforementioned date, the suspension should continue until 31
March 2002, upon which date the measures should expire unless a review
investigation is initiated before that date. If such a review is initiated, the measures
should remain suspended during the review investigation.

the anti-dumping measures

the European Communities,

requested a review,

HAS ADOPTED THIS REGULATION:

Article 1

1.

2.

3.

The application of anti-dumping duties as specified in Article 1 of Council
Regulation (EC) No 2398/97 is hereby suspended with regard to imports of
cotton-type bed linen originating in Egypt.

The anti-dumping duty specified in Article 1 of Council Regulation (EC) No 2398/97
with respect to Egypt shall expire on 14 February 2002 unless a notice has been
published in the Official Journal of the European before that date, indicating that a
request for a review has been received by the Commission. If such a request is
published, the anti-dumping duty specified in Article 1 of Council Regulation (EC)
No 2398/97 with respect to Egypt shall remain suspended but shall expire on 31
March 2002 unless a review has been initiated before that date. During such a
review, if any, the application of the anti-dumping duty with respect to imports
originating in Egypt shall remain suspended pursuant to paragraph 1.

Any request for a review by interested parties must be in writing and must reach the
than 31 January 2002.
Commission at

following address no later

the

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European Commission
Directorate General for Trade
Directorate B and C
TERV 0/13
Rue de la Loi/Wetstraat 200
B-1049 Brussels
Fax (32-2) 295 65 05
Telex COMEUR B 21877

The anti-dumping proceeding concerning imports of cotton-type bed linen originating in
Pakistan is hereby terminated.

Article 2

This Regulation shall enter into force on the day following that of its publication in the
Official Journal of the European Communities.

Article 3

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council
The President

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