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Turkish Mills at Risk Due to New Anti-Dumping Duties

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Cotton Boll Close-Up

Turkey is roasting its own textile producers.

The Istanbul Textile and Raw Materials Exporters Union has come out against the Turkish government’s recent move to impose a 3 percent CIF (cost, insurance and freight) duty on all U.S. cotton fiber imports, stressing that it will make the country’s exports more expensive and, thus, unattractive to international buyers.

The new tariff was announced at the weekend, with immediate effect.

“This is a decision that will increase raw material costs of textile producers by 2-3 percent and will somewhat affect price competitiveness of Turkish exports,” Ismail Gulle, head of the union, told Reuters. “U.S. cotton has specialty uses. It is not something we could give up using. The industry will shoulder the costs.”

Turkey consistently ranks as the second largest export market for American cotton, according to U.S. Department of Agriculture data, with shipments ranging between 1.5 million and 2 million bales. But in October of 2014, the Turkish government said it was hurting the domestic industry and started an anti-dumping investigation, which resulted in this just-announced levy.

The National Cotton Council (NCC) has also opposed the move.

“In the first place, the investigation itself lacked transparency regarding information used to justify the investigation,” NCC Chairman Shane Stephens said, noting that the “self-initiated” anti-dumping investigation was a tit-for-tat response to several U.S. trade investigations of Turkish steel imports. “In fact, data used in support of a finding of injury to the Turkish domestic cotton market ignored established facts to the contrary.”

Stephens also pointed out that the NCC submitted ample evidence to show that Turkey’s cotton market has experienced price declines due to the same factors affecting markets worldwide, such as government policies in developing countries and competition from manmade fibers.

“Unfortunately, the import duties only compound the difficult economic climate facing U.S. cotton growers and merchandisers,” Stephens continued. “The council will continue to actively oppose the imposition of duties and is exploring ways to reverse the decision, such as WTO (World Trade Organization) mechanisms and the Turkish judicial system.”

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