EU Governments Refuse to Back Proposed Anti-Dumping Measures

24 March 2003 00:00  [Source: ICB Americas]

The European chemical industry is calling for a review of the way the European Union (EU) handles anti-dumping cases after a majority of EU governments refused to back proposed anti-dumping duties on Russian and Egyptian imports of rubber-grade carbon black.

The European Commission, the EU executive, recommended that duties ranging from 7 to 55 percent be imposed primarily on four producers. Those companies are Alexandria Carbon Black (ACB) of Egypt and Omsky Zavod Technicheskogo, Jaroslavsky Technichesky and Tuima-sytechuglerod, all of Russia.

An investigation by the Commis-sion concluded that producers in the two countries had more than quadrupled their share of the EU market to 9 percent by undercutting prices.

The market share of the EU's four main carbon black producers-Cabot Europe, Columbian Chemicals Europa, Degussa and Deutsche Gasrusswerke-declined by around 7 to 74 percent, and their return on investment dropped from 33 in 1998 to 1 percent in 2001.

The Commission's proposed duties failed to gain majority support from the EU's 15 governments, which will be increased to 25 next year when 10 Eastern European and Mediterranean states are scheduled to join the Union. The deadline for the duties to be approved by EU states expired last week.

"The Commission's investigation met all the technical requirements as laid down by legislation," explains an official at the European Chemical Industry Council, which made the dumping complaint to the Commission.

"We do not know the reasons why the governments would not support the Commission because those have to remain confidential," she says. "In countries outside the EU, a single body takes the final anti-dumping decisions. In the EU, 15 governments have to decide, which will become more and more difficult when the Union is enlarged to 25."

The EU governments were lobbied by EU's eight tire manufacturers. They told the Commission that anti-dumping measures would have a serious impact on their finances because they would not be able to pass on the extra costs.

ACB, which is owned by Aditya Birla Group of India and plans to be the world's largest single-site carbon black producer, alleged that the Commission had exaggerated its profit margins.

The producers in Russia complained that the Commission did not properly take into account low energy costs in the country.

Another Commission proposal for anti-dumping duties on impor-ters of hot-rolled steel coil has also failed to gain the backing of the majority of EU states. Observers say the simultaneous rejection by EU governments of two anti-dumping measures is unprecedented.

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