BASF May Win Longer EU Tax on U.S. Ethanolamine Makers Like Dow

The European Union threatened to renew tariffs on Dow Chemical Co. (DOW) and other U.S. makers of ethanolamines, a chemical used for detergents and textiles, to limit competition for EU producers including BASF SE. (BAS)

The EU said it would review whether to let lapse the duties of as much as 111.25 euros ($144.60) a metric ton on imports from the U.S. of the product, also used for herbicides and cement. The 12-year-old levies punish U.S. exporters for selling ethanolamines in Europe below cost, a practice known as dumping.

The current anti-dumping duties have been in force since mid-2000 and were last renewed for two years in January 2010. The levies range from 59.25 euros a ton for Dow Chemical to 111.25 euros a ton for manufacturers including Huntsman Corp. (HUN)

The review “will determine whether the expiry of the measures would be likely, or unlikely, to lead to a continuation of dumping and a continuation of injury,” the European Commission, the 27-nation EU’s trade authority in Brussels, said on Jan. 21 in the Official Journal. The duties were due to expire today and will now stay in place during the probe, which can last as long as 15 months.

BASF, Sasol Germany GmbH and Ineos Europe AG, which account for more than half the EU’s production of ethanolamines, filed a request on Oct. 21 for the expiry review, according to the commission. The companies argued that an end of the duties would probably lead to further dumping by U.S. competitors and injury to the European industry, the commission said.

Market Share

The U.S. share of the EU ethanolamine market dropped to 14 percent in the 12 months through September 2008 from almost 24 percent in 2005, the bloc said when renewing the anti-dumping duties two years ago. The combined European market share of other exporting countries including Russia, Mexico, Iran and Taiwan rose to more than 7 percent from about 4 percent over the period, the EU said.

A different form of EU anti-dumping duties on U.S. ethanolamines existed in the 1990s. The bloc introduced variable levies based on minimum sales prices in 1994 and switched to the current fixed-rate tariffs as part of a July 2000 decision to maintain anti-dumping protection for five more years.

When the duties were due to lapse in July 2005, the EU began an expiration investigation that led to an initial two- year extension in October 2006. The subsequent two-year renewal in January 2010 followed a 15-month probe that prevented the levies from lapsing as previously scheduled in October 2008. The two-year renewals were a concession to the U.S. industry and European ethanolamine users because the EU normally extends such measures for five years.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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