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Towel makers suffer from dumping

This article was written by Susan Yu and published by the Taiwan Journal on March 10, 2006. It reports that the Ministry of Finance recently launched to an anti-dumping investigation against Chinese towel makers, in response to local towel makes who complain that their very survival is being threatened by their Chinese counterparts. The ministry is currently reviewing information and evidence gathered by various government agencies in this case.

The Ministry of Finance will decide by June 20 whether to impose an anti-dumping tax on Chinese towel imports on a temporary basis, until its investigation is completed and a final decision over the case is reached in October. If the ministry eventually finds that towels are indeed being dumped, then an anti-dumping tax on all Chinese towel imports will be imposed for up to five years.

This anti-dumping investigation is significant, because it is Taiwan's first case against China since both sides entered the World Trade Organization (WTO) in January 2002. The unprecedented action was prompted by towel makers in Yunlin County in central Taiwan, who urged the government to immediately adopt various "import relief measures", including a temporary import-duty hike, the establishment of import quotas, and the provision of research-and-development subsidies.

Currently, China-made towels are sold in Taiwan at about half the price of Taiwan-made towels. According to the Yunlin Towel Industrial Technology and Development Association, the domestic market share of Taiwanese producers has dwindled drastically since February 2002, when Taiwan lifted a ban on Chinese towel imports. Lower-priced Chinese towels now account for 70 percent of the market, while the local towel industry has seen its production value shrink by 50 percent. It is estimated that the low-priced Chinese imports are also affecting other local industries such as furniture, ceramics and optical fiber.