On April 16, 2016, the Turkish government released its final decision on its anti-dumping investigation of U.S. cotton. Based on assertions that U.S. cotton was dumped into Turkey injuring the domestic fiber market -- which the National Cotton Council (NCC) steadfastly challenged -- a three percent CIF (cost, insurance and freight) duty has been imposed on all U.S. cotton fiber imports into Turkey, effective immediately.
Turkey is the second largest export market for U.S. cotton with shipments ranging between 1.5 and 2.0 million bales. The duties automatically put U.S. cotton at a competitive disadvantage to cotton produced in other countries, thus seriously jeopardizing business with Turkish mills.
NCC Chairman Shane Stephens said the investigation, which was initiated in October 2014, was clearly in response to several U.S. trade investigations of Turkish steel imports. In an unusual move, he noted that the Turkish government self-initiated the investigation without any showing of special circumstances as is required under World Trade Organization (WTO) rules.
“In the first place, the investigation itself lacked transparency regarding information used to justify the investigation,” Stephens said. “In fact, data used in support of a finding of injury to the Turkish domestic cotton market ignored established facts to the contrary.”
Stephens said that the Council submitted ample evidence showing that Turkey’s cotton market has experienced price declines due to the same factors affecting cotton markets worldwide. He said, for example, government policies in developing countries and competition from manmade fibers have contributed to stagnant global demand, increased stocks and lower cotton prices.
“Unfortunately, the import duties only compound the difficult economic climate facing U.S. cotton growers and merchandisers,” Stephens stated. “The Council will continue to actively oppose the imposition of duties and is exploring ways to reverse the decision, such as WTO mechanisms and the Turkish judicial system.”