In appeal WTO confirms illegality of European anti-dumping rules used against bed linen imports from India

Geneva/Brussels, 02/03/2001 (Agence Europe) - The World Trade Organisation considers illegal the method used by the European Union to calculate the anti-dumping duties imposed, in 1997, on imports of bed linen from India. In a report made public on 1 March, the WTO appeals body confirmed, on two points challenged by the EU, the ruling of the dispute settlement panel handed down last October.

This report, which must still be formally approved during the next meeting of the dispute settlement body in mid-March, condemns the methods used by the EU to: 1) calculate the margin of dumping according to the zero reduction system. This method is used when there is dumping on certain products concerned by the procedure, but not others: the anti-dumping duties should cover all the products in a category (in this case bed linen), the duties fell on the products being dumped to compensate for the fact that they are also imposed on products that are not the object of dumping; 2) the calculation of profit margins.

In principal the Commission should have six months, after the formal adoption of the report, to conform with its conclusions. Negotiations will open with the Indian authorities to modify the dumping margin on bed linen. Regardless of this, the duties will have to be reviewed in 2002, following the five years of definitive anti-dumping duties imposed in 1997. Egypt, which joined the procedure opened by India, should also be concerned, it to being submitted to anti-dumping duties on its exports of bed linen to the EU.

More generally, the conclusion reached by the WTO creates a precedent that could effect the next anti-dumping measures adopted by the EU. They constitute a revolution, according to the experts from the European Commission, to the extent that the so call zero reduction method is used by other members of the WTO, including the United States, which will probably also have to revise its anti-dumping methods. This is the first report adopted by the dispute settlement body in the framework of the WTO anti-dumping agreement.