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China Faces Possible Renewal of EU Tariffs on Tartaric Acid

Jan. 26 (Bloomberg) -- The European Union threatened to renew tariffs against China on a chemical used in industries from pharmaceuticals and construction to food and drinks so EU manufacturers avoid stiffer import competition.

The EU said it would examine whether to reimpose the duties as high as 34.9 percent on tartaric acid from China for another five years. Tartaric acid is the main acid in grapes and can also be made synthetically from petrochemicals.

The EU imposed the import taxes in January 2006 to punish Chinese exporters such as Changmao Biochemical Engineering Co. for selling tartaric acid in Europe below cost, a practice known as dumping. The goal was to help EU producers including France’s Legre-Mante SA, Italy’s Distillerie Mazzari SpA and Spain’s Alcoholera Vinicola SA.

The inquiry will determine whether the expiry of the duties “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 today in the Official Journal. The measures were due to lapse this week and will now stay in place during the probe, which can last as long as 15 months.

Europe’s industry makes tartaric acid naturally and Chinese exporters sell the synthetic form, the EU said when introducing the duties. Only natural tartaric acid can be used for wine making, which accounts for a quarter of the market, the EU said.

Chinese exporters compete against European manufacturers in the rest of the market where both natural and synthetic tartaric acid can be used, the bloc said. China’s European market share rose to 11.5 percent in the 12 months to mid-2004 from 6 percent in 2002, the EU said when introducing the duties.

Oxalic Acid

Separately today, the EU said it may introduce anti-dumping duties on imports from China and India of another chemical called oxalic acid. The commission started an inquiry into whether Chinese and Indian exporters dump oxalic acid in the EU following a Dec. 13 complaint by European chemical industry lobby group Cefic.

In this case, the commission has nine months to decide whether to impose provisional anti-dumping duties for half a year and EU governments have 15 months to decide whether to apply “definitive” levies 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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