The EU has levied new tariffs on the UAE, Iran and Pakistan for polyethylene terephthalate, on grounds that EU producers were impacted by subsidies and price undercutting. Subsidies on oil helps petrochemical companies in the Gulf make products at about a twelfth of the cost of their EU counterparts.
The European Commission’s Official Journal said EU petrochemical manufacturers suffered material damage due to subsidised imports from the three countries and accused JBF RAK of dumping, or selling goods at under cost. The duties imposed, as high as €142.97/ton, are for four to six months and may be extended to 5 years. This has kindled fears of spreading trade protectionism in the euro zone as its debt crisis threatens to spread.
During deep recessions, countries resort to protecting domestic producers at the expense of international export companies. Europe has shored up trade protection for EU producers such as Spain’s Novapet and Equipolymers of Italy against imports from Asia. The latest measures involve adding tariffs on polyethylene terephthalate (PET) used in a range of plastic products exported by producers in the UAE, Iran and Pakistan.