EC plans two-year ethanolamines duties extension

Author: Juliane von Reppert-Bismarck
23 Oct 09 | 09:27 GMT+1

IN BRIEF
The European Commission wants to extend duties on ethanolamines from the US for two years, a move that could tip behind-the-scenes talks in favour of an extension of footwear duties against China and Vietman.

The European Commission wants to extend duties on ethanolamines from the US for two years despite rising EU profits and falling evidence of dumping by US producers, a move that could tip behind-the-scenes talks in favour of an extension of footwear duties against China and Vietman.

In a document circulated among interested parties from the US and the EU, and seen by MLex, the commission proposes to prolong antidumping duties on the organic chemical compound despite citing rising EU profit and market share and a finding that a main US exporter is not dumping its goods.

Though likely to be contested for its statistics and reasoning, the plan will doubtless please Germany, whose BASF chemicals giant produces most of the EU's ethanolamines.

It could incline Germany to side with the commission in its contentious plan to extend duties on Chinese and Vietnamese shoes by 15 months.

Cyprus is also understood to be wavering in its previous opposition to the footwear duty.

Previously, 15 capitals stated their opposition to footwear duties: Austria, Belgium, Czech Republic, Cyprus, Denmark, Estonia, Finland, Germany, Ireland, Latvia, Luxembourg, Malta, the Netherlands, Sweden and the UK.

If Germany and Cyprus change sides, the commission will have secured majority support for its shoe-duty extension.

The commission was due to decide on ethanolamines by 25 October. But it asked EU capitals for more time in its investigation, citing the case's complexity.

If adopted, the rollover will likely hurt Dow Chemical, the main US exporter to the EU and the only company cited by the commission as not currently dumping.

"The weighted average dumping margin ... (was) zero for Dow Chemical," the commission document says.

Dow Chemical is the main US ethanolamines exporter to Europe, accounting for up to 90 percent of exports. Its dumping duty, if extended, would be worth about 60 euros per tonne.

Community industry's profit has risen to almost 22 percent from 15.8 percent in 2007 according to the commission. Market share has risen to more than 76 percent from 72.9 percent in 2007.

Imports from the US have risen to more than 34,000 tonnes, up from 32,835 tonnes in 2007.

Interested parties in the case now have time to comment on the plan before capitals vote on it.

Justifying its plan, the commission says in its document "there are no compelling reasons not to continue imposing the anti-dumping measures currently in force against imports of ethanolamines originating in the USA."

It justifies the two-year limit on the extension by arguing "US excess capacity is expected to disappear gradually towards 2013."

The request for an expiry review was lodged by BASF, INEOS Oxide Ldt, Sasol Germany and Akzo Nobel Functional Chemicals.

Measures have been in place for more than ten years.