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EU Drops Its Threat to Tax Saudi, Omani Plastic-Bottle Material

Dec. 14 (Bloomberg) -- The European Union ended a threat to impose tariffs against Saudi Arabia and Oman on a material used in plastic bottles after EU producers withdrew complaints about subsidies and price undercutting.

The EU closed probes into whether Saudi and Omani makers of polyethylene terephthalate get trade-distorting government aid and sell in the 3 billion-euro ($3.9 billion) European market for the material below cost, a practice known as dumping. Users of polyethylene terephthalate, or PET, include plastic-bottle mold manufacturers such as Resilux NV and bottlers like Coca-Cola Co. PET is also used in plastic films and fibers.

The Committee of Polyethylene Terephthalate Manufacturers in Europe, which in January filed unfair-trade complaints on behalf of EU manufacturers against Saudi Arabia and Oman, withdrew the allegations on Oct. 12, the European Commission, the bloc’s executive arm in Brussels, said today in the Official Journal. The complaints led the commission in February to open inquiries that can lead the EU to impose anti-subsidy and anti-dumping duties on imports for five years.

In 2010, the EU imposed anti-subsidy tariffs on PET from Iran, Pakistan and the United Arab Emirates for five years and renewed PET anti-dumping levies against China until late 2015 to curb import competition for European producers including Spain’s Novapet SA. In 2007, the bloc re-imposed for five years anti-dumping duties on PET from India, Indonesia, Malaysia, South Korea, Thailand and Taiwan as well as separate anti-subsidy levies against India.

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

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

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