A future trade detail between the EU and Australia is under threat due to an argument over Australia's decision to impose anti-dumping duties on Italian processed tomatoes. Brussels may refer Canberra to the World Trade Organisation (WTO) over the decision, European Trade Commissioner Cecilia Malmström has warned.
Malmström spoke out in a 4 August response to a written question on the issue from Italian Socialist MEP Paolo de Castro. De Castro had explained that despite detailed investigations failing to provide any evidence of dumping, the Australian Anti-Dumping Commission imposed dumping duties on two Italian tomato processing firms - La Doria and Feger - on 11 February this year.
The Australian Anti-Dumping Commission had argued in the decision that the two firms' domestic sales could not be taken into account in calculating the dumping margin, owing to the ‘particular market situation’ in Europe created by provision of EU Common Agricultural Policy aid to tomato growers. The decision was therefore based on the impact that EU support is alleged to have on fresh tomato prices, de Castro wrote, pointing out that aid is “decoupled” from production.
The Italian argued: “This approach is clearly in breach of WTO rules and sets a dangerous precedent for agricultural raw material processors in the EU.” He went on to ask whether the Commission will refer the matter to the WTO, “on the grounds that the subsidies were incorrectly calculated and taken into account” and whether it will raise the matter during EU-Australia negotiations, “with a view to ensuring that this wrong-headed approach is not used again in future.”
Responding Malmström acknowledged: “The Commission is very concerned about the anti-dumping investigations which Australia has initiated against Italian processed tomatoes in the last few years and, in particular, about the questionable methodology recently used in order to establish dumping margins.”
Malmström said that the Commission is following the investigations “very closely, in full support of the Italian companies concerned and in close co-operation with the Italian government”.
Malmström continued that “the Commission has made Australia aware that the imposition of these measures has the potential to develop into a significant trade irritant given its systemic implications and may even undermine support for a future free trade agreement with Australia.”
