Brussels, 16/10/2003 (Agence Europe) - The European Commission is preparing to bring in definitive compensatory duty, which could be between 8 and 12%, against imported bed linen from India. It will consult the Member States meeting on Thursday in consultative committee, whilst awaiting reactions from the accused Indian companies. The investigation, which was launched in December 2002, shows that this product- already subject to antidumping measures in the past which were condemned by the World Trade Organisation (WTO) for their methodological shortcomings- apparently enjoyed a series of unfair subsidies from the New Delhi authorities, as the Committee of the Cotton and Allied Textile Industries of the EU (Eurocoton) stated. The procedure for the same products of Pakistani origin is also nearing an end. In both cases, definitive measures will be taken before 18 January with a decision by the Council of Ministers, forgoing the traditional transitory phase.
"There will be no provisional measures, as we chose instead to conduct an in-depth inquiry", said a source in Brussels. The affair is a delicate one and the Indian authorities, quoted by the local press (Economic Times) are drawing a line between this case and the antidumping one, in which the WTO had to decide (see EUROPE of 10 April), saying that Community surtaxes serve to counter the progression of Indian textiles in Europe, with the abolition of all quota regimes looming between now and January 2005. According to an Indian negotiator in textiles issues, New Delhi has tried to show that although subsidies exist, they have not provided the Indian industry with any unfair advantage at the cost of the European competition. In other words, these are subsidies with no distorting effects on commercial exchanges. The Europeans say: "you cannot just reintroduce surtaxes like that. In order to take commercial defence measures, we have to carry out a detailed inquiry", and the one just finishing "demonstrates the existence of subsidies given by the authorities, the causal link with the serious harm suffered by the Community industry and our interest" in taking measures, as the level of duty has to be set on the basis of the comments from the negotiators on behalf of the accused. What is under suspicion are the "significant" financial contributions granted to the sector by New Delhi in 2001-2002, in the form of subsidies to production sites situated in free zones for export or to units focusing on export, or of preliminary licences, import duty credits, tax exoneration on profits, and preferential import duties on equipment.