EU opens probes into whether Saudi and Omani makers of PET get trade-distorting government aid

The European Union threatened to impose tariffs against Saudi Arabia and Oman on a material used in plastic bottles, saying EU producers may be victims of subsidies and price undercutting.

The EU opened probes into whether Saudi and Omani makers of polyethylene terephthalate get trade-distorting government aid and sell in the 3 billion-euro ($4.1bn) European market below cost, a practice known as dumping.
Users of polyethylene terephthalate, or PET, include plastic-bottle mold manufacturers such as Resilux NV and bottlers like Coca-Cola. PET is also used in plastic films and fibers.

The inquiries will determine whether EU producers of PET have suffered “injury” as a result of any unfair Saudi and Omani competition, the European Commission, the 27-nation EU’s trade authority in Brussels, said today in the Official Journal.

In 2010, the EU imposed anti-subsidy tariffs on PET from Iran, Pakistan and the UAE for five years and renewed PET anti-dumping levies against China until late 2015 to curb import competition for European producers including Spain’s Novapet.

In 2007, the bloc re-imposed for five years anti-dumping duties on PET from India, Indonesia, Malaysia, South Korea, Thailand and Taiwan as well as separate anti-subsidy levies against India.

Under EU rules, the commission can impose provisional anti- subsidy duties for four months and provisional anti-dumping levies for six months. The EU’s national governments - acting on a commission proposal - can turn those measures into “definitive” five-year duties at the same or different rates.
The commission has nine months from the start of an investigation to decide on provisional measures. EU governments have 13 months from the beginning of a probe to impose five-year anti-subsidy - or “countervailing” - duties and 15 months to impose definitive anti-dumping measures.

Wednesday, 16 February 2011 3:40 PM
Source: Bloomberg.com