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NEWS UPDATES Asean Affairs    1 August  2012

Indonesia reports EU to WTO for anti-dumping duties


Indonesia has filed a complaint with the World Trade Organisation (WTO) to contest "inconsistent" anti-dumping duties imposed by the European Union (EU) on fatty alcohols, an official says.

The Trade Ministry's director for trade security, Ernawati, told reporters yesterday that the government asked the WTO to broker a consultation, or the first stage in its dispute resolution process, with the EU.

Ernawati said that the EU imposed lower a anti-dumping duty on PT Musim Mas and declined to give similar treatment to other companies.

The EU required that Musim Mas, which is based in Medan, North Sumatra, pay a duty of 45.63 euros (US$55.94) per metric tonne of imported fatty alcohols, while requiring other Indonesian producers to pay 80.34 euros.

"We want to discuss, among other things, how the calculation of the dumping margins applies" and the damages to EU businesses, Ernawati said.

The government was upbeat that the WTO would favour Indonesia, Ernawati said, as indicated by the EU's recent decision to give a duty discount to another Indonesian company, PT Ecogreen Oleochemicals.

Indonesia must wait 30 days for the WTO to process its request for a consultation. If unsatisfied by the results, Indonesia can request adjudication of its dispute by a panel in a process that can take up to 60 days.

The EU Council issued anti-dumping duties on imported fatty alcohols from India, Indonesia and Malaysia in November, claiming that the products were sold to the 27-nation bloc under production cost or below their domestic sales prices.

Malaysian fatty alcohols were charged with import duties ranging 35.19 euros to 61.01 euros per tonne, while India was charged 46.98 euros to 86.99 euros.

Fatty alcohols, used in various chemical products such as cosmetics, soaps and shampoos, are derived from palm kernel oil, of which Indonesia is one of the world's largest producers.

Indonesia's fatty alcohols exports topped 17.24 million tonnes and were valued at $22.11 million in 2005. By 2009, those figures had more than doubled to 41.12 million tonnes and $42.73 million, according to the Trade Ministry's data that was used in the EU's investigation of previous dumping allegations.

Fatty alcohols are latest in a series of trade disputes between emerging and developed economies. In the last four months, Brazil, China and India have also initiated trade disputes with world trade's governing body.

Indonesia's request for a WTO consultation is its first since the WTO found in favour of the nation in a dispute with the US over clove cigarettes in April.

In its ruling, the WTO said that a US law on smoking prevention that banned clove cigarettes sales was discriminatory and would require the US to ban flavoured cigarette sales, particularly menthol cigarettes widely produced by American major producers, to be fair.

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