According to Fu Donghui, a lawyer from Beijing-based Allbright Law Offices, Chinese polyester staple fiber (PSF) producers are complaining that the EU Commission used a cartel price when assessing an anti-dumping case launched against them in December 2003.

The PSF price of the US-based company Wellman was taken as an analogue price in the EU's anti-dumping investigations.

"However, Wellman was being sued for violating anti-trust laws in the US and Canada," Fu said. "According to the company's own figures, the price probably exceeds those under normal market conditions."

In a letter to the EU, the lawyer pointed out that Wellman had been the subject of a Department of Justice investigation, 32 federal cases (which were consolidated into one) and 41 state cases in the US, as well as of three cases in Canada.

The company, together with eight others, was accused of "conspiracy, artificially fixing, raising, maintaining, or stabilizing PSF prices and allocating portions of the PSF market and specific PSF customers among themselves."

Although the courts have not yet decided on penalties for Wellman, one of its co-defendants has been fined US$28.5 million.

"It is unfair to use Wellman's price, which is likely a cartel price, as a substitute price in an anti-dumping investigation," Fu said.

The Chinese businesses' representative has asked the EU whether it knew Wellman had been involved in the violation of anti-trust laws when using its price as an analogue, but they have yet to receive a direct reply.

The lawyer hopes the EU will make a timely response to the case, which is scheduled to conclude on March 19.

The China Chamber of Commerce for Import and Export of Textiles, the industrial association of the textile industry, is also keeping a close eye on the issue.

"Besides providing the involved enterprises and the Ministry of Commerce with the latest information, we supervised the entire process of the EU's investigation for further negotiation," said Wang Tao, an official with the chamber.

Wang said if the EU does not change its final ruling, the chamber will suggest the government take other measures, such as submitting the case to the European Court or seeking a dispute solution from the World Trade Organization.

The EU Commission launched an anti-dumping investigation against PSF from China and the United Arab Emirates at the end of 2003, involving over 50 Chinese manufactures.

Of the five Chinese enterprises who responded to the investigation, only one was granted market economy status with a duty of 4.9 percent, while three were charged duties of around 22 to nearly 29 percent, according to the final draft decision from the EU.

The remaining enterprise and all other Chinese suppliers were charged a duty of over 80 percent, a tax rate that would exclude nearly all Chinese PSF from the European market.

"The charges are a big blow to Chinese PSF manufacturers, particularly those who answered the case, as Europe is one of their major markets," Wang said.

(China Daily March 7, 2005)