BONN, July 17: In a display of its internal pulls and chaotic anti-dumping regime, the European Union (EU) is reopening for the third time an anti-dumping investigation against unbleached cotton fabric exports from India and five other Asian countries.

The investigation could lead to provisional anti-dumping duties being reimposed within a month or so, a mere four months after they were lifted.India is the largest exporter of unbleached cotton fabrics to the EU, and in 1995 it exported DM 255 million, or 40,000 tonnes, worth of unbleached cotton fabrics to the EU. The other countries whose exports are to be investigated are China, Turkey, Pakistan, Indonesia and Egypt.

It was only in May that the European Union decided against converting provisional anti-dumping duties into definitive ones. A crucial role was played by Germany, which changed its mind in favour of the exporting countries at the last minute, and swung other fence-sitters along with it.

The investigations against the six countries initially began in February 1996. The main investigation was completed in the third quarter of 1996. It recommended provisional anti-dumping duties. But the Anti-Dumping Advisory Committee meeting in September 1996 was overwhelmingly opposed to provisional duties. Yet, in November, provisional duties ranging between 13 and 22.9 per cent were imposed.

In the EU trade ministers' meeting on definitive duties this summer, however, Germany voted in the exporting countries' favour, together with free-trade-minded Britain and Scandinavian countries.

The issue became intensely politicised when in May, France's insistence on imposing the duties threatened to cloud two EU summits in Nordawijk and Amsterdam to revise the Maastricht treaty and prepare the EU for expansion.

French President Jacques Chirac, who had promised to create new jobs in the textiles industry in the France's parliamentary election campaign insisted that the duties should be imposed. He failed at the time.

The reopening of the investigation was preceded by preliminary Brussels enquiries said to indicate dumping, but it could be seen as a victory for French pressure.

This time round, the move has created a further disturbance in the EU, with concerns expressed about ``chain complaints'', one complaint following another soon after the first investigation is closed. In the unbleached cotton fabrics case, EuroCoton, the initial complainant, threatened to go to the European Court of Justice and filed a second anti-dumping complaint soon after the first. This could become a test-case for the EU much-criticised anti-dumping mechanism.

Clubbed alongside this are the provisional anti-dumping duties voted for in the EU on bed linen imports. India is the second largest bed linen exporter to the EU after Pakistan, with exports of over DM 150 million in 1995. Indian officials attribute the vote to the need for European solidarity.

Having voted in favour of Asian countries on unbleached cotton fabrics, they said, Germany and others had to mollify protectionist Mediterranean countries.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.