20/02/2011
Kingdom and Oman may face EU tariffs on PET
The European Union (EU) has threatened to impose tariffs against PET from Saudi Arabia and Oman, saying EU producers may be victims of subsidies and price undercutting, as per Bloomberg. The EU opened probes into whether the Kingdom and Omani makers of polyethylene terephthalate (PET) get trade-distorting government aid and sell in the 3 billion euros ($4.1 billion) European market below cost, a practice known as dumping.
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 on Saturday in the Official Journal of the European Union.
The journal alleged in its report that the sole producer of the product under investigation originating in Saudi Arabia has benefited from a number of subsidies granted by the government of Saudi Arabia. The sole producer is Saudi Basic Industries Corporation (SABIC) at its Arabian Industrial Fibers Company (Ibn Rushd) in Yanbu. PET is used to make plastic bottles for carbonated drinks, juices, oils, cosmetics, and water.
This is the first EU investaigation into trade with Saudi Arabia. Normally such investigations are the result of a formal complaint to the EU followed by preliminary inquiries. The investigation is expected to take months, even "up to a year" according to the spokesman for the EU delegation in Riyadh. SABIC has been given until March 25 to provide answers to the investigation.
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.
