Textile firms to take EU ruling to WTO
By Yan Yang (China Daily)
Updated: 2005-03-22 23:12

Chinese producers of polyester staple fibre (PSF) have urged the government to take an EU anti-dumping ruling to the World Trade Organization.

A Chinese woman works at a textile factory in Xiangfan, central China's Hubei province, March 22, 2005. [newsphoto]

Cao Xinyu, vice-chairman of the China Chamber of Commerce for Import and Export of Textiles, the industrial association of the textile industry, said Tuesday that the chamber, as a representative of firms involved in the case, had made the application to the Ministry of Commerce.

The moves comes after the European Commission -- the EU's executive -- slapped five-year-tariffs of up to 49.7 per cent on PSF from China.

"The enterprises who believed they were unfairly treated in the case want to seek a solution to the dispute from the WTO," he said.

The ministry is viewing the case and to decide whether to submit to the WTO's Dispute Settlement Body.

If the ministry approves the application, it will be the first case independently filed by China to the WTO. China took part in a case against US steel tariffs with the European Union, Japan and South Korea.

PSF is used in clothes, bed linen and furniture fillings.

Chinese companies are angry with the ruling as they believe the EU Commission took a cartel price to calculate the normal value, said Cao.

As the European Union has refused to recognize China as a market economy, it does not take the costs of Chinese companies in anti-dumping cases and uses the costs of a "surrogate" country.

In this case, the commission chose Wellman Inc in United States to establish a normal value after a verification visit.

But Fu Donghui, a lawyer from the Allbright Law Offices, said Wellman was being sued for violating anti-trust laws in the United States and Canada.

The US company, together with eight other companies, was sued of "conspiracy, and artificially fixing, raising, maintaining, or stabilizing PSF prices and having allocated portions of the PSF market and specific PSF customers among themselves."

The prices provided by Wellman should be higher than the normal price, Fu said.

And it is unfair to use Wellman's price, which is likely to be a cartel price, as a substitute price for an anti-dumping charge, he added.

But the commission failed to offer a direct reply to Chinese companies' concerns.

The commission launched an anti-dumping investigation against PSF from China and the United Arab Emirates in December 2003.

Over 50 Chinese PSF manufacturing enterprises were involved in the case, with a value of US$25 million.

Though the value of the case is not big, the commission's mistake is apparent and the companies are confident the decision will be revoked, said Fu.

Cao said the Chinese textile firms want to get fairer treatment from foreign governments by taking the case to the WTO.

The commission made two anti-dumping rulings last week, both in favour of EU companies.

Apart from the PSF case, it asked the Chinese polyester filament apparel fabric manufacturers to pay anti-dumping duties of up to 85.3 per cent in its preliminary ruling.

Over 800 Chinese enterprises are involved in the case.

Chinese textile companies are facing increasing anti-dumping investigations or possible safeguard measures since their export may rise following the removal of global textile quotas.

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