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ITC concludes towel business should get relief

This article was written by Susan Yu and published by the Taiwan Journal on March 24, 2006. It reports that the International Trade Commission under the Ministry of Economic Affairs recently concluded that Taiwan's towel manufacturers have sustained great losses as the result of high-volume importation of cheap Chinese-made towels. Based on this conclusion, the commission will soon make recommendations to the Ministry of Economic Affairs on how to implement temporary import relief measures.

One temporary import relief measure may be to impose tariff surcharges or import quotas. Such action is permitted by the World Trade Organization, who rules that its member economies may mitigate the severity of the impact of cheap imports on a given domestic industry.

In August 2005, the Yunlin Towel Industrial Technology and Development Association filed a plea for import relief. The association claimed that since Taiwan lifted its ban on imports of Chinese towels in February 2002, Chinese towels have come to account for 70 percent of the Taiwan market. Taiwan's own towel industry saw its production value shrink by 50 percent.

In March 2006, economic and financial authorities launched investigations on domestic market conditions in this regard. The International Trade Commission's collection of data supports the claim made by the aforementioned Yunlin Towel Industrial Technology and Development Association. The data indicates that Chinese towel imports grew by 52.2 percent in 2003, and by 20.6 percent in 2004. Between 2002 and 2005, the import volume of Chinese towels rose by 80 percent.

Before the International Trade Commission makes its recommendations on temporary import relief measures, it will convene a second public hearing in order to solicit the views of representatives of both Taiwanese and Chinese towel makers. The first public hearing was held in March 2006 and was also attended by representatives from both sides.

After the Ministry of Economic Affairs receives the recommendations made by the International Trade Commission, it will finalize a set of proposals and discuss with Chinese authorities within 60 days. This means that the implementation of temporary import relief measures may be approved by the government in Taiwan as early as July 2006.

In the mean time, officials from the Ministry of Finance announced that based on the recommendations made by the International Trade Commission, the government might take other long-term anti-dumping measures, including the imposing of anti-dumping sanctions. These measures will only be taken if negotiations with Chinese authorities fail and reasonable adjustments cannot be achieved.

In related news, the government's procurement agency recently announced that it will begin procuring only towels certified as made in Taiwan. It is expected that other government agencies will follow suit. Representatives from Taiwan's towel industry also announced that they will promote the use of an official made-in-Taiwan certification logo.

The towel-dumping complaint described in this article is the first such case officially investigated since Taiwan entered the World Trade Organization in 2002.